First of all – A useful summary of VC advice to startups as the market crashes,
Thank you, Benedict Evans, for sharing this.
I had applied to Mosaic Ventures where he is a VC partner but may be the mail went to spam, or Machine Dalal could be in the waitlist.
A VC firm, apart from the money that we seek, offer a lot of other very important services. Something that I could have discussed here but I was busy and also, most of that stuff is something money can buy and once they offer you money and you take it, you have bigger problems to solve – profitability is one.
One of the key things they do is help the company become better, advise them on business and help with hiring and in some cases where founders are grounded and know that they are product manager and not business managers, get the right people in place.
Machine Dalal is a platform for Print, Packaging and Converting Industry.
What do they know of this industry? Jack-shit.
They know finance.
They are accountants, and analysts.
Basically, the people who do the due diligence are the ones who either got hired to sell soap at Unilever or failed to secure the job of selling soap at Unilever.
Some of them were engineers, who discovered that selling soap was more important than engineering products, and they were right.
Now engineering companies are chasing soap sellers for money.
In the hindsight, they were foresighted.
There is not a lot of competition for Machine Dalal. There is some but by the next release we would have a better product with better features and more user adoption. We can build all the features and provide all the benefits, but if user adoption lags, we are basically fucked, so that one parameter is we are actively chasing.
Even more than funding.
Another good thing is that the negligent competition that we have is not funded with VC money or at least they are not blitz-scaling. There is a huge social cost of unprofitable companies, they make it difficult for those who want to run a business on profit.
They also destroy the customer base.
As it is during the downturn, when the customers are suffering, they jack up the prices to achieve overnight profitability.
This is also the time when the private equity guys, ask the same companies, who they had convinced to take their money, to go fuck themselves.
If you connect the dots, you will comprehend the counter cyclical nature of venture capital funding.
You see when the economy is booming, there are all sorts of give aways, offers, buy one get one or more.
But now that we have downturn or inflation or stagflation – one of those things that kill your hopes, dreams, and fundraising processes, you are forced to push up the price exactly at the same time, the customer base is struggling.
So, kids, profits.
Machine Dalal already has a GMV of over 1000crs INR that is about 128m$.
But there is no profit over there. Because we are naive kids, we built an open platform where users are actively trading.
So, it is not exactly the funds that we need, what we need is an organization to help us convert this transformative idea into a world-class business.