Team: Most modern-day businesses are intellectual property-driven businesses. The greatest IP is built by healthy bodies and minds. So who you team up with is very important. I typically look for 6Cs while creating a winning team: Commitment, Chemistry, Craving, Character, Capacity, and Capabilities.
Startups have such a glamorous reputation. Companies like Facebook, Instagram, Youtube, Uber, and Airbnb once started as scrappy startups with huge dreams and huge obstacles.
Yet we of course know that most startups don’t end up as success stories. What does a founder or a founding team need to know to create a highly successful startup?
In this series, called “Five Things You Need To Create A Highly Successful Startup” we are talking to experienced and successful founders and business leaders who can share stories from their experience about what it takes to create a highly successful startup.
I had the pleasure of interviewing Sandeep Aggarwal, a serial entrepreneur, angel investor, Internet visionary, and philanthropist. He is popularly known as the father of marketplaces in India. He has founded two Unicorn marketplaces in India so far: ShopClues, India’s first managed marketplace in 2011 (which became 5th Unicorn in Consumer Internet in India), and Droom, India’s first marketplace for automobiles in 2014. Sandeep recently released his biography Fall Again, Rise Again.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I am currently the founder & CEO of Droom, India’s largest AI-driven online marketplace for automobiles, the company I founded in 2014. Before Droom, I founded ShopClues.com in 2014, India’s first-ever marketplace. I am the only Indian tech entrepreneur who founded two unicorns in a row in the last decade. Born and raised in India, I spent 15 years in the USA living in St Louis, Seattle, and Silicon Valley, before returning home. I have been in India for the last 8 years. I was indicted by the DOJ and sued by the SEC in a high-profile insider trading case for my role as a Wall Street analyst in July 2013. The case caused me an immense amount of collateral damage and shattered all my dreams. But after nearly 7 years of waiting, the DOJ dismissed and dropped all charges against me in early 2020 and I had a civil settlement with the SEC.
I was born and raised in India. I came to the USA in my mid-20s to pursue an MBA. After graduation, I took a job with Charles Schwab six days before 9/11. I saw the dot com crash and 9/11 further weakened the economy. My American dream was slipping away. Charles Schwab went from 26,000 full-time employees to 14,000 but luckily, I never lost my job.
In 2004 I ended up moving to Seattle for two years and worked for Microsoft. This was shortly after I became a father for the first time. Then in 2005, I ended up joining Wall Street as an equity research analyst to provide research on the Internet sector and companies like Google, Amazon, Netflix, Yahoo, eBay, Expedia, Priceline, and more. I did well on Wall Street and became a top-ranked Wall Street analyst. In 2008, when most of the old bellwethers were losing their decades-long careers on Wall Street after the financial meltdown, I survived the economic meltdown and kept on growing.
I was in Silicon Valley until 2011 before beginning my entrepreneurial journey. I was neither an early bloomer nor was I unsuccessful in my pre-entrepreneurship career, so starting up posed many barriers of entry for me. In 2010, MakeMyTrip, India’s version of Expedia or Booking.com, went public and got listed on NASDAQ. I was a Wall Street equity research analyst in San Francisco and decided to launch research coverage on MakeMyTrip, which brought me to India. Very soon, I realized that even though E-Commerce at that time was a 17-year-old industry, for all practical purposes it was new for India. I thought, “Wouldn’t it be great that rather than writing research reports, I actually created my own start-up?” Hence, on Father’s Day 2011, I left my rewarding career on Wall Street with close to 1 million dollars in annual compensation and moved to India to start India’s first-ever marketplace for E-Commerce. Within its 4th year of operations, ShopClues became a Unicorn, the 5th digital economy Unicorn in India, and the fastest to reach Unicorn status at that time.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
I was in Silicon Valley and was going through the lowest period of my life after the high-profile insider trading indictment against me. I was losing my grip on the first start-up I founded, and I had no clarity about my future. One day, I woke up and thought that the worst thing a human being can do is wallow in self-pity and feel miserable, or give up on the human spirit. So I challenged myself by saying, “If I could create a large company before, why can’t I do it again?” I looked around as I thought about new ideas. I was very sure that I wanted something in the Consumer Internet technology space and something that had large addressable opportunities with technology at the center, as well as high margins. And I realized that India’s automobile market is the third largest after the USA and China. Technology could help me build a 21st-century automobile buying and selling platform and this can become a highly lucrative business. So I launched Droom, an online marketplace for automobiles for India, in April 2014 and I haven’t looked back since.
Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?
I was extremely fortunate to get plenty of inspiration and guidance from many of my colleagues, friends, my ex-wife, and clients. More than me, the people around me believed that I would be successful if I ventured out on my own.
What do you think makes your company stand out? Can you share a story?
Droom is India’s largest online marketplace for buying and selling pre-owned automobiles. What makes us different from anyone else is that we are a technology and data science-driven company that happens to be in automobile buying and selling vs. an automobile dealership or company using technology and data science. That means everything we do is more like Google or Facebook or Airbnb or Uber vs. CarMax or your neighborhood auto dealer.
Second, we have not only taken the platform approach as a marketplace, but also built an entire ecosystem and basic plumbing work that you might take for granted in the USA. For example, we built Orange Book Value (like Kelley Blue Book Value for India). We built Eco, a mobile-based inspection service (an asset-light, tech-heavy and data-heavy substitute of going to Pep Boys and getting your car inspected). We created Droom History (like Carfax of India). These are just a few examples of the vertically integrated services we built. This allows us to give our users the best of both worlds — selection and affordable prices coming from the marketplace — as well as trust, transparency, standardization, and convenience as if we own the inventory and run physical stores.
How have you used your success to bring goodness to the world?
I try to do my part and contribute with the utmost level of sincerity. For example, I guide and mentor a few hundred budding entrepreneurs globally each year. I participated in a reality show like Shark Tank that encourages entrepreneurship. I speak at most of the tech conferences and lead the educational establishment of entrepreneurship and digital opportunities globally. Finally, I wrote a book on my life journey called Fall Again, Rise Again (a best seller in India) to infuse higher confidence, courage, and conviction among entrepreneurs. I also run a social enterprise, the Sandeep Aggarwal Foundation, that helps poor kids and women to lead better lives and become self-reliant.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
In a nutshell, it is passion, the ability to deal with ambiguity, continuous effort, strategic thinking, and an analytical mindset.
Even when I worked with Charles Schwab, Microsoft, and investment banks on Wall Street, I was extremely passionate. I was always up for new assignments, challenges or roles, and it helped to build lots of skills without feeling an additional burden or sense of effort.
Regarding strategic thinking: During my corporate career, I had very narrowly-defined roles, which I handled with the utmost level of passion. But I always tried to see things beyond what was obvious, apply my knowledge and experience beyond my deliverables. Those helped me to have more holistic deliverables that made a larger impact. Having a strategy in place always worked wonders for my career.
In my 23-year career, I would give an analytical mindset a remarkably high score. They say that if you cannot measure, you cannot control. So while the use of data or analytical skills cannot guarantee success, they can certainly increase your likelihood of achieving success.
Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about the advice you’ve received that you now wish you never followed?
I usually take input from anyone who is my well-wisher, friend, or someone I respect. However, in my career and profession, I might take a longer amount of time to decide but I will not pursue something until I am fully sold. Hence, I do not have any such examples. I make my share of mistakes, but the idea is to learn from your mistakes, get better, and keep moving ahead. So I do not have any regrets.
Can you tell us a story about the hard times that you faced when you first started your journey?
I had moved to India to continue my entrepreneurial journey. It had its own ups and downs, especially while building the company. During the 4th of July weekend in 2013, I decided to take a break with my family back in Silicon Valley. I also took a few appointments for a potential round of fundraising. While I was in the USA, I was indicted on insider trading charges by the DOJ and sued by the SEC for my role as a Wall Street analyst way back in 2009, a career I had left voluntarily. Shortly after I was indicted, I was all over the newspapers and magazines. For the next 72 hours, not even a single person who knew me directly or indirectly knew about this development. I had to stay in the USA for the next 13 months to deal with my legal case without my family, kids, or work. I had suffered lots of collateral damage, emotional and financial hardship, and was forced to step down from ShopClues.com. Basically, I lost my reputation, career, and family, and no one wanted to risk associating with me. This very dark outcome was my fate by July 2013.
Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?
I guess what kept me going was undying hope, spirit, and passion. I am always hopeful and usually do not take no for an answer. After my legal battle, I was totally shattered. Everything I built byte by byte for 15 years of my career was gone. However, I was able to start again, and things worked out along the way.
The journey of an entrepreneur is never easy and is filled with challenges, failures, setbacks, as well as joys, thrills, and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?
Absolutely. The life of an entrepreneur is no less than a rollercoaster ride. Sometimes you achieve new highs and new lows, and sometimes new highs and new lows come within a matter of hours or days. And my life has been nothing less than this wild ride. What keeps me going is undying hope, human spirit, resilience, and perseverance.
Let’s imagine that a young founder comes to you and asks your advice about whether venture capital or bootstrapping is best for them? What would you advise them? Can you kindly share a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?
I would vehemently suggest that founders do not hesitate when it comes to raising capital. Bootstrapping is not for the faint of heart and hats off to those who run bootstrapped companies, but capital is perhaps the most important thing you need to increase your likelihood of survival, weather dozens of mistakes, overcome entry barriers, and create scale.
Ok super. Here is the main question of our interview. Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones? What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.
Only 2% of startups are successful. However, 98% of the startups that are successful will see a day above 100 million dollars in terms of value creation, and less than 5% of the “above 100 million dollars startups” will likely become Unicorns. So, the odds are small. I feel fortunate to have commenced my first venture in my late 30s and created two Unicorns in a row.
- Ideas and Willingness: Everything starts with an idea or dream, and an undying desire or willingness to pursue that dream. In my view, most people give up at this stage.
- Capital: Unlike businesses in the 19th and 20th centuries, you do not need a huge amount of capital to build large, scalable, and world-class businesses. However, you still need access to a decent amount of capital to fund your idea and achieve its goals.
- Team: Most modern-day businesses are intellectual property-driven businesses. The greatest IP is built by healthy bodies and minds. So who you team up with is very important. I typically look for 6Cs while creating a winning team: Commitment, Chemistry, Craving, Character, Capacity, and Capabilities.
- Conviction: Entrepreneurship is a real test of one’s conviction. Are you someone who will not take no for an answer? If you do not give up things, and you’re ready to withstand headwinds or negative surprises, you are likely to be remarkably successful.
- Prototyping: Most people suffer from delusions of grandeur while thinking about their idea or startup. And to be sure, there is no harm in thinking about the best case scenario. But one should never forget that most things march towards excellence with the power of prototyping.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
Entrepreneurship really tests one’s conviction. The biggest mistake founders tend to make is looking for an endorsement and validation whether whatever he or she is thinking is right or not. Second, trying to get insurance for new a few years in terms of capital, people, resources, etc. Third, the money-raising always takes longer than expected. Finally, as a founder, Murphy’s Law is always in play — sometimes on steroids! That means that nothing will be a straight line and anything that can go wrong, will go wrong. So have confidence, conviction, and courage, and get ready to deal with ambiguity, uncertainty, and volatility.
Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?
Yes, that is true. As a founder, you are passionate about things and that also means you do not always do a good job in terms of where to draw the line regarding work-related commitments. My suggestion would be to have a list of items on the personal side that are non-negotiable e.g. family time, any sports you follow, yoga/meditation, or whatever it takes to fulfill yourself spirituality. Make sure you follow a tight regimen for physical and mental health, be it travel, reading, hobbies, etc.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would love the combined wisdom of all the big tech companies to be utilized in emerging markets to solve real-world problems. I think the world is a better place when we can reduce the differences in economic resources, lifestyles, exposure, and between the haves and have nots.
We are blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
The list is exceedingly long. But I would love to have breakfast with Warren Buffet. This has been my long-held desire.
How can our readers further follow your work online?
They can follow me on Twitter (@SandeepAgg), LinkedIn (https://www.linkedin.com/in/sandeepaggarwal/), or visit sandeepggarwal.com
This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!
Thank you very much. I equally enjoyed doing this interview. We live in a world and an era where the democratization of entrepreneurship is not this pronounced, and I truly hope more and more people jump into entrepreneurship as their choice of career.