Rajan Anandan (Managing Director Sequoia Capital, Surge )
Rajan Anandan, Managing Director of Sequoia Capital (India and Southeast Asia) and Surge, has said that companies will need to redefine themselves and become leaner to prepare themselves for uncertainties during the uncertainties caused by COVID-19.
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While early-stage deals took a dire hit during the initial phases of the pandemic (pre-July), things are slowly starting to get back to normal. “Digitisation” seems to be becoming the new normal and companies are quickly pivoting from being partial to completely online.
However, the road has not been easy. While some are struggling, others are keeping afloat and the rest is growing.
“Companies that survive the pandemic will end up becoming stronger and more focused. Founders need to spend this time in trimming the fat from their business and building leaner more efficient organisations,” said Anandan, who was previously VP of Google SEA and India.
“For businesses that are focused on user love and unit economics, growth opportunities will always present themselves. But you can only grow if you survive. And that’s what the current focus should be. Keep your business alive, so you can emerge on the other side of this crisis,” he adds.
In his view, building a company that is efficient and can provide maximum value to a customer will become the winner during this unprecedented time. The best companies are almost always able to raise funding, no matter what.
“For those who are building must-have products v/s nice-to-have products, fundraising will not change drastically even during this time. Startups that may be adversely affected are the ones that are either focused on sectors that are largely offline, or ones that have high burn and may not have solid unit economics. Such companies will not be very attractive to investors right now,” Anandan stresses.
Anandan’s golden rules for startups
Focus on the core
Family and close friends make up the core. Focusing on the well being and health of “the core” is what can lead to one’s work to be done more effectively.
Have good unit economics
Building a leaner company will be valuable and this can be done by focusing on having good unit economics. “The one thing that will be non-negotiable going forward will be the value placed on having good unit economics. Growth at all costs will no longer be acceptable,” he says.
Listen to your customer
Since customer needs are constantly changing and competition is increasing, listening to their complaints and suggestions can be important for a startup.
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“Early customer love and ongoing customer feedback are the most effective tools in knowing if you have a product-market fit (PMF). And if you don’t have a PMF, no amount of pivots or capital will ensure your success,” he points out.
Create a psychological safety at work
As startups move from offline to online, beer nights, game nights and ping pong tables are suddenly no longer relevant. In this case, it is extremely important for leaders to ensure the physical and mental well-being of the team.
“At Surge and Sequoia India, the team has been working hard to make sure that there are regular catch-ups between managers and their teams along with 1-1 talks. This is in addition to all-hands meetings where we might have virtual quizzes or other fun, non-work related activities to engage with teams at scale, online,” he shares.
He concludes by telling founders not to be afraid to show their vulnerability as this creating authenticity can go a “long way in making the team feel like they matter beyond the 9-5”.
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Image Credit: Sequoia
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