By Anand Parthasarathy
July 5, 2023
‘Steering The Ship To The Shore: Guide for Founders Navigating Startup Waters’ by Srini Rajam; Stardom Books, USA; June 2023; Rs 495. Amazon link
In a country with one of the world’s largest, liveliest, startup ecosystems, the failure rate is high: nine out of ten new ventures fail. There is advice aplenty to be had – but little that goes beyond the usual boilerplate platitudes.
So, it is rare and refreshing to find a helpful, yet hard nosed guide for aspiring founders of startups written by one who has been there and emerged successful. He co-founded one of the early technology startups in India, which, almost a quarter century later today, commands an enviable global market and reputation in its chosen niche in digital media solutions and products.
Indian Institute of Science alumnus Srini Rajam joined Texas Instruments, – the first global technology company to set up an India R&D operation in 1985 – and rose to be its first (and youngest) country Managing Director within a decade . Six years later, faced with the prospect of having to move to the UAS for his next assignment with the company, he chose to leave TI. In 2001, with six colleagues who left with him, he co-founded a company to explore the new and emerging technology of digital signal processing. The Magnificent Seven as they were later to be dubbed, called their new venture Ittiam, an acronym for French philosopher-mathematician Rene Descartes’ famous saying “I Think, Therefore I AM”.
Rajam remains Ittiam’s Chairman and CEO till today. Peppered throughout his book are learnings from Ittiam’s own experience in finding a technology niche, creating that first product, carving out a new market, gaining customer approval, seeking and finding external venture capital at the right time, adjusting to sudden market changes and demands – and consolidating to become a respected global brand.
Going beyond what business schools teach you, Ittiam evolved its own culture and the author shares it in his book: when the fledgling company recruited its first twenty engineers, it organised a get together for them -- and their parents, relatives and friends. The parents got a rare chance to size up the new employers—and ended up sharing their dreams.
Rajam reminds startup founders of the enduring wisdom in Gandhiji’s famous words: “A customer is not dependent on us. We are dependent on him. He is not an interruption to our work. He is the purpose of it….”
When it comes to marketing, the author suggests that the In-to-Out direction – going to the market with new products—is important, but so is Out-to-In – listening to what the market says and then shaping your strategy.
From the first product demo to the first customer win and the first revenue dollar, the first break-even and then the first profitable year, the author keeps it short-n-sweet when making his practical suggestions. Indeed, the entire book is just over 130 pages and can be read in one sitting.
Rajam’s advice sometimes flies in the face of some industry practices like letting people go as a cost reduction exercise and chasing after runaway growth without ensuring that the business is fundamentally sound. He suggests some alternative – and sensible – ‘old-school virtues’: hire for long term retention if the talent is right. Don’t inject unnecessary ‘get rich quick’ urgency where a steady yet profitable state can be achieved.
“Recalibrate” is another mantra that the author recommends. If the market changes, be agile. Consumer digital cameras, once made for a huge market worldwide. But the players who did not see cameras on smart phones slowly taking over this sector, were the ones who fell by the wayside. Starting as digital signal processing intellectual property creator and being globally recognized for it, served the company well for its first decade. Since then, it has reset its business model to address the dramatic transformation in how the digital media is created, transported and consumed today – through Internet and Online Platforms.
When to use internal funds and when to seek external funds? This has always been a tricky decision and Rajam shares Ittiam’s milestone’s from Ittiam’s 23 year old history to suggest how to address such dilemmas.
David vs Goliath?
“A small startup raising capital from a prominent investor should not be seen as a David vs Goliath match-up” he writes, “It is unclear who is David and who is Goliath as both parties are taking on high odds. Both are fighting to win in an uncertain situation.”
Seizing the moment is another challenge that confronts startups who need a fine ear -- and lots of data -- to decide when to sell and when to hold on. The author recalls the classic case of Web pioneer Yahoo. In 2008, they turned down an offer from Microsoft to buy them out for $ 45 billion, at a 62 percent premium. Nine years later, after a dramatic fall in their business, they were acquired by telecom leader Verizon, for just $ 4.8 billion. Rajam quotes Infosys co-founder N.R. Narayana Murthy about the vital role of timely information: “In God, we trust, everybody else brings data to the table.”
With pithy insights like these, Srini Rajam has put together a book that provides a very useful, always engaging template for budding startup founders as they navigate the choppy waters of business and set their compass towards the elusive shore of success.