Canaan Partners’ Alok Mittal: Nothing can replace passion and perseverance
Alok Mittal is passionate about India’s entrepreneurial ecosystem. He is a co-founder of Indian Angel Network, on the board of TiE (The Indus Entrepreneurs) Delhi, and an advisor to Adtech India. Alok joined Canaan Partners in 2006 and is currently on the boards BharatMatrimony (Matrimony.com), IndiaProperty, iYogi, mCarbon, UnitedLex, CarTrade and Happiest Minds.
Alok’s expertise is working with early stage consumer internet and mobile companies, as well as supporting innovators in managed software services and other IT enabled businesses. He is a regular speaker at prominent industry events such as TiE, NASSCOM, Adtech and more.
Prior to joining Canaan, Alok co-founded JobsAhead.com, a leading web-based recruitment business, which was acquired by Monster.com, the global leader in online recruitment. He also brings strong Telecom experience to Canaan having worked for Hughes Software Systems. Alok earned a BE in computer science and engineering from the Indian Institute of Technology Delhi and a MS in computer science from UC Berkeley.
An unedited version of the conversation appears below.
How did you get started as an entrepreneur and when did you know it’s time to move into venture capital?
AM: I had a desire to start my own company right through college days. The advent of internet allowed me the right opportunity to do so. This was also aided by the fact that one of my college friends, Puneet Dalmia, was looking to doing an internet startup at the same time, and having a co-founder was a great enabler. After we sold our company, I was looking to doing another startup when a VC opportunity came by – it seemed something which was worth a try, especially given my interest in the entrepreneurial ecosystem (I had already cofounded Indian angel network by then).
Now since you’re an investor, do you ever miss the excitement of building a start-up yourself?
AM: Building a startup and investing in startups are very different roles, and both have their attractions. So while I do miss being hands-on and in front of customers, the upside of the investing role is that one gets a broader view of the market, and an opportunity to partner with very bright and motivated entrepreneurs.
How do you know when a small idea has big potential?
AM: First, I believe big potential can exist only in big markets, or markets that are growing fast enough to get big fast. So selection of market space is important. The next step is to understand the customer need, and how compelling is the startup’s solution from the customer’s viewpoint. Finally, the ability of the team to scale and compete in the market is a key driver of value.
What methods do you use to assess the applicants (startups raising funding)? Does the method changed since you started with investments?
AM: Largely the method has remained the same, and includes hearing the entrepreneur’s view and plan for the market, and then validating that through independent means and directly through potential customers. Assessment of the team and defensibility of the business are other key areas of assessment.
Once the investment has been made, how VCs actually support the venture development and how Canaan Partners do it? (Non financial values)
AM: Post-investment, we tend to be active in company, and typically take board seats. As part of the board, we participate in decisions relating to strategy, financing, senior level recruitment and the like. Apart from that, we regularly network in spaces that we invest in, and hence may be able to bring customer and partner contacts, recruiting leads, and key advisors to the table.
Why do some start-ups succeed and others not?
AM: This is a broad topic, and something that has not been refined to a science. This is reflected in “errors” that investors make – both investments that we pass on and they become big, as well as the ones we invest in and they fail. At an early stage of the business, there is also intrinsic risk that is hard and unadvisable to avoid. Our belief is that playing into large market opportunities with a compelling team and differentiated offering will provide us with more successes than failures.
Are there any bad habits that many Canaan partners’ portfolio founders share?
AM: Well, I can only answer that in an encrypted message. Afher dj d sjdh poa eusit sfjd mlak bx zgqw nbc hfywu slskdjs. 🙂
What kinds of companies or particular technologies are you most excited about right now?
AM: We focus on early-stage technology-enabled companies. In that context, some of the key areas of focus for us are consumer internet business, mobility, platform oriented enterprise services, software products and payment systems.
If you could share any of your advice, thoughts or tips for those, desiring to go build their startup in India? I’m sure that would be much appreciated by our readers.
AM: Nothing can replace passion and perseverance. I would advise founders to pick areas they are deeply passionate about, and then focus on delivering the best solution from the customers’ viewpoint. Secondly, I would advise entrepreneurs to continuously think about how they can scale their business to the next level.