Hard-won lessons from a Gobi Partners exec and serial entrepreneur

An earlier version of this article was published by Tech in Asia on November 27, 2019.

Shannon Kalayanamitr of Gobi Partners — a premier VC fund with US$1 billion AUM and 13 funds — is a battle-hardened entrepreneur herself. In her former life, Kalayanamitr cut her teeth as a management consultant and investment banker at PwC and Lehman Brothers. She went on to found and relentlessly expand the empire of MOXY, which later became Orami — Southeast Asia’s leading women lifestyle e-commerce destination. While raising multiple rounds of funding totaling approximately US$50M, Orami went head to head with Rocket Internet-backed Zalora and won on multiple fronts. Zalora bowed out of Southeast Asia in 2016. 

She recently gave a talk at MOX Happy Hours, a public event series by Mobile Only Accelerator (MOX), operated by SOSV, a top 20 US venture firm according to PitchBook. The accelerator counts Kalayanamitr among its network of over 300 mentors including venture capitalists, ex-entrepreneurs, and heads of corporates. Here are the key takeaways from her candid and revelatory talk.

Do one thing right, and go deep

Looking back at her earlier days of starting up and fundraising, Kalayanamitr advises founders to “crystallize what you do, and do one thing right.” 

Just as Amazon dominated books first before dominating everything else, startups should aim to nail one thing first. Kalayanamitr remembers investors’ skepticism towards her original plan for Thailand-based MOXY, which included e-commerce, logistics and a lead-generation engine. “For me, I wanted to convey that I had vision, that there was a roadmap, there was more than just the e-commerce business that we see here,” she explains. 

Realistically, founders don’t have to convince investors that they’re visionaries who can see into the future. It’s a people business, after all: investors bet on entrepreneurs and their ability to adapt, not on their business plans. 

Identify the right competitors

“A pet peeve for VCs is when founders say they don’t have any competitors,” Kalayanamitr shares. For example, FoodPanda’s competitors are not only other food delivery apps, but also people eating out or picking up food themselves. 

When talking about their respective industries and competitive landscapes, a lot of founders make the mistake of saying that they don’t have any competitors. The reality couldn’t be more different. While there aren’t exact replicas of your business model per se, people have been trying to solve the same problems in different ways. 

Founders should apply rigor and creativity to their competitive analysis, just as they do with product prototyping and strategy. Mapping the right landscape also shows that you have the right amount of self-awareness, vision and humility to succeed. From the VC perspective, it’s also a test of whether the founders know their stuff or not.

Find your moat, and plug your roots in deep

Once you have identified your competitors, make sure that you have a convincing edge over them. Citing the blue ocean strategy, Kalayanamitr urges everyone to drill deep to find their unfair advantagewhat you have that’s defensible. Investors want to make sure that your unfair advantages are sustainable in the long term as well. She adds: “Ask yourself, if your competitor puts 100 million dollars into your industry and dump all the prices, what would you do then? Anticipate the future of your industry and make sure you’re defensible against whatever is coming.”

Build on top of other technologies

Just because you can, doesn’t mean you should. This especially rings true while working with a team of brilliant engineers. While many companies want to be “disruptive,” when it comes to tech stack, it’s best not to reinvent the wheel when you’re still trying out new things. 

“While creating an MVP for a product, what you don’t realize is that you’re also doing an MVP of your company structure, an MVP of your team, and an MVP of this new industry,” Kalayanamitr observes. During the first years, you’re going to pivot many times before reaching product/market fit, founder/market fit, product/channel fit, etc. Because the MVPs will go through many iterations, the first thing that a company tries to do might not be the thing it ends up doing. During the initial stages, you’re out there “proving the concept, not proving that you’re a rockstar in tech,” she adds. Being efficient about your tech stack is something investors will value, and it will make your life easier too.

Build rapport with investors early

Fundraising is like dating — do the dance early. “The rule of thumb is to make them want you. Find a way to build rapport and have a conversation” instead of just swapping business cards, she shares. When you fundraise, equity is the most expensive because you’re giving away a part of your company. That’s why it’s important to have good founder-investor chemistry. Kalayanamitr stresses the importance of investor due diligence: “When I was starting to fundraise, I felt that I was begging for money. The reality is that investors are looking for people like you to invest in, to make money together. You need to choose them, too.” 

She warns against fundraising when you’re almost out of cash, noting that fundraising takes about three months in the seed stage, longer in later stages. To prepare for the process, founders should talk to the VCs and know who they are four to six months beforehand. The initial comments from investors, plus their feedback on what metrics to focus on, will prove invaluable down the line. 

Above all, take care of your mental health

When it comes to success stories, founder mental health is often sidelined. With the rising cult of productivity, it’s time we find a kinder way to acknowledge the toll the grind takes on people. “If you feel yourself burning out, and I’m talking to a lot of men here, it’s not wrong to go see a therapist either,” Kalayanamitr says.

She suggests having a support network as well as a co-founder to shoulder the sheer weight of running a company. Cultivating a resilient mindset also needs to be intentional from day 1. “One thing that’s constant is that you’re going to fail. Not fail in general, but fail in many different things. Know that you might run out of money, maybe there’s a new competitor in town, maybe somebody gets sick, maybe somebody backstabs you,” shares the battle-hardened investor and entrepreneur. 

The best way to prepare yourself mentally? Remember why you’re doing it in the first place. “It’s a marathon not a sprint. There will be blood, sweat, and tears. But the glory is great. Have to be passionate about the problem that you’re solving, and solve it,” she concludes.