Serial entrepreneur K Ganesh is on a new trip. This time, the veteran who has run technology businesses for more than 25 years and has had four successful ventures, is betting on the second coming of e-commerce. Recently, Mr Ganesh sold his stake in TutorVista, an e-learning company founded in 2005 to the Pearson group for Rs 577 cr. But his approach to investment, is not typical of Angel investors. In an interview with Pi, he explains the difference and talks about the macro trends underway in the country. Edited Excerpts
Pi: How is your investment philosophy different from that of an Angel investor?
Ganesh: I’m more of a strategic investor. What I do is parallel entrepreneurship. The idea is to be the promoter of these companies as well. The idea is mine. Then I find like minded people and entrepreneurs. Unlike angels, who don’t usually get too involved with the companies in which they have invested, we spend a considerable amount of time and effort in running these companies. We give them initial funding and quickly take them to series A funding. Usually, in about 6 months. The areas that we understand, all of that happen to be in the Internet and e-commerce space. There is no right or wrong to these things, there is no one way of doing things.
Pi: So you do not cash out during series A round?
Ganesh: No. The VCs usually make it a point that we stay on. Thats part of the contract. They want us to work with the companies. I usually stay invested till the founders are at the company.
Pi: What do you look for in a company?
Ganesh: Companies that can scale rapidly. The ones that address a deep rooted problem and come up with a disruptive way of solving a problem. Deep rooted problem means that there must be a great need and a large market size. There are a lot of entrepreneurs in the country. So if you are promising incremental improvements over something which is already there, it’s unlikely to happen. You can’t be saying that I’ll execute better than the four others who have already tried. Its likely that you will commit the same mistakes and maybe more.
Pi: The teams that you put together, what is characteristic of them?
Ganesh: Its always about how hungry they are. Do they have the mental stamina to go through it all and if they have it in their DNA. Usually less than 5 % of startups succeed and make loads of money. There are ups and downs and entrepreneurs must be doing it for the right reasons and motivation. Execution is always underestimated. Their ability and understanding of a sector is important. The core competency must be ours. Only the rest can be hired.
Pi: What are the macro trends you see?
Ganesh: There are many things that I don’t know so these are not the only things out there. Education, healthcare and the consumption story where the size of the population and its propensity to spend is large. Consumption is big because of all these aspirational brands and products that have come up. The population is going to get old, so healthcare where the government systems are almost dysfunctional is exciting. Same goes for education. On the technology side, cloud based solutions and mobile platforms are interesting. Applications that solve challenges at the bottom of the pyramid. Tablets are also big.
Pi: Starting last year, how many companies have you invested in?
Ganesh: So far six. We are looking to do a maximum of 10 or thereabouts. I’ve invested in online book sales company Bookadda, online grocery BigBasket, local services delivery company Delyver, online jewelry Bluestone are some of them.