Talking Mergers and Acquisitions in the Start-up Industry in India at The NASSCOM PRODUCT CONCLAVE
Loading ...So now we are in the second phase of the sessions talking about Mergers and acquisitions. We have an eminnent panel discussing the same.
Whenever companies go for M&A they are trying to fill up a gap. And hence companies have to realize filling in a gap or to get a differentiator. A claer positioning for the company is very important. We also need to look at what is the core, which could consist of:
- technology
- product positioning
For a start-up its an absoute essential to have the domain expertise. This is highly important for start-ups. And from the India perspective we are seeing that lot of companies are growing mature with the knowledge.
We need an ecosystem where companies need to come up, where start-ups and other inerested companies can come and explore gaps and hence create possibilities
The understanding of the market and product development evolves this way. Such an ecosystem will have entrepreneurs connecting together, towards building interesting partnerships. Says Shobhit from Yahoo.
And now we have Prof. Raghunath at IIM-B. Having a global perspective form Prof. Raghunath will surely be good and he starts by saying that IIM-B was a partner for a Global study which was done for entrepreneurs.
Entrepreneurship emerged from two kinds of need:
- Needs
- Opportunity
But at the basis is the passion, which rules the roost. Valuations that come from potential acuiqrers, which generally does not meet the potential of the acquiree. The valuation tends to be slightly higher, for technology and for acquirers for a product platforms, the valuations are much higher.
The second challenge for start-ups is customer acquisition. Competition is not between firms, it is between network of firms.
Third area which again is a challenge, for start-ups is cash.
Interestingly Prof. is discussion IPR, which is an issue, which a lot of start-ups have come to us in Delhi with.
- What’s the value of a VC from other than just money?
- Building a company is transitioning from investor capital to customer capital. And that is why I feel capital is the most important value the VC brings in. And once we come in, we obviously ensure that it is done.
- What’s your experience at Yahoo of early stage start-ups?
- If you are clear on the right set of things the company needs, the investment comes in easy. Many of the times we have seen start-ups solving in problems which may have been solved previously by start-ups. And big companies coming in, surely add to solid strategy.
- If there is an early investment in the start-up there is a much higher chance of better alignment.
- How did you decide on selecting the right side of market?
- We wanted to be unique though being in the healthcare space. Its a very niche space. Also one of the things which drove us for such an M&A. Conceiving a product is like conceiving a baby.
- The differentiation we brought in was the cost factor. We built a product, at 60 per cent of the total cost.
Post an interesting Panel discussion, we have opened the floor to questions and well, to my NOT an utter surprise, there are questions on M&A’s from Entrepreneurs and how they can really position their products/ productized services perfectly for the targeted segment, so that they are present and positioned right towards creation of value.
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