This blog has been written based on the interview with Pankaj Jain Partner at 500Startups
Pankaj for some of your listeners out there who are dying to apply for 500 Startups, what are you looking for in your next batch of startups?
Pankaj: I think the most important thing I look for in founders is that they are thinking about a problem and more importantly thinking about a problem that has not been solved yet and I’ve said this for years and I still really believe this.
When you walk out of your hotel room or your office or your home in India, there’s about a million problems staring you in the face all around you. The problem is that most of us, when we live there, we become oblivious to those things, we block them out and that doesn’t mean those problems are going to go away, those problems are still going to be there. If you can find solutions to those problems and really build on those solutions, that’s where the opportunity is. It’s not building an AI chat box for ecommerce, that for me doesn’t excite me in the least.
You know, I met somebody who was building a solution for water notification. So, most people don’t realise this but you only get in most metropolitan areas of India, you only get four hours of running water per day, two hours in the morning, two hours in the evening. And it’s usually from a specific time to a specific time but like most things in India, time is a very stretchable phenomenon, right? And just because you’re supposed to get water at 4pm, doesn’t mean you’ll actually get it.
Well, how about for people who are living in poor neighbourhoods, out working they can’t be home at a certain time to wait for water so they can fill up their water tanks for drinking and cleaning their clothes and bathing and everything else. What if they got an SMS alert that said: “Hey, this is the time water’s going to be available.” And that was because there were sensors placed in the water distribution system, right? That’s a real problem that people will pay small amounts on a regular basis for because it solves a really important need for that.
There’s another company that I met that looked at garbage collection in India, which is still a major problem. Well, how do we take these problems and combine them and start collecting garbage in a way that makes economic sense and deliver it to bio-diesel plants that are going to pay for it? So, you can sell garbage to bio-diesel plants that aren’t getting enough raw material to power their plants and you can help the pollution problems across the country. These are real issues that Indians have to deal with on a day-to-day basis. So, I think the biggest opportunities to come are solving real Indian problems that are also transportable to South-East Asia to Africa and most of Asia.
So, those are the things that I think are exciting and these could be anything from education to health, digital health, micro-finance, garbage collection, water distribution, data analytics. You know, most of these places especially we got tier two, tier three cities in India and I’m sure many other parts of Asia and Africa, there’s not a lot of data. At least not structured data in any sense, so no one’s really able to make informed decisions about anything so if you can collect that data in a cost-effective way and you can make that data usable and you can make data-driven decisions, I think that’s good for everyone also.
I think there’s a lot of interesting opportunities but at the core, it’s about solving real day-to-day problems. Don’t try and solve first world problems for somebody sitting in New York or San Francisco. Go solve a problem for somebody who lives and breathes Delhi’s air on a daily basis.
So, what makes up a successful 500 Startup founder?
Pankaj: I think that’s pretty much the same everywhere. It’s not a 500 founder versus anybody else but I think being bold and being humble is really important not just for successful founders but also for investors. I think recognising opportunities early, taking chances when you see those opportunities but also being able to learn and grow consistently is important.
Running a two man startup out of your bedroom is very different from running a company with 5,000 employees, right? So, can you grow into that? At every stage, you’re going to feel like: “Oh, I made it!” Right? But then you have to stop and think and say: “Wait, there’s a long way still to go, how am I going to grow into this.” Recognising that you constantly need to be learning and constantly be talking to other people and developing mentors, right? For each stage that you’re going to get into is also important? Getting people that can help you personally and guide you into that is very useful.