Apart from advising Nike and being a partner at Dave McClure’s 500Startups, Arjun Arora loves to support people with great ideas and says a startup founder should be able to explain his idea in one minute and thirty-six seconds.
Arjun Arora’s age and list of achievements just don’t match up. He is an advisor to Nike and Cambrian Asset Management. He is also an investor in Angel List, Lyft, Branch Metrics and Hooked, and is a partner at 500Startups. He was the founder of Retargeter, he mentors 200 startups, and believe it or not, Arjun is only 33 years old.
Some achievement that!
As In-Residence at Expa, Arjun sits in absolute tranquillity and seems to have an almost unemotional demeanour about things. “I want to do my bit to Indian startups and startups across the world,” he tells YourStory.
Arjun Arora claims to be ruthless about time and believes in a consistency of character and effort. The electrical engineer and computer science graduate from the University of California, Berkeley, shares insights about raising big money, and the importance of a rules-based and research-driven investment system.
Why should a startup founder be ruthless about time?
Arjun Arora: Managing time is very important, and one must be very rigorous about it. I plan weeks in advance when it comes to my meetings. I have been this way since childhood; I am very organised about things and ruthless about time.
As an entrepreneur, you have to be present at the moment to be efficient and plan things ahead.
When I got picked by an investment bank, I was suddenly thrown in with 70 hours of work a week. I was building financial models and creating presentations for top investors.
There is something called contextual switching, where one should learn how to handle stressful moments and emotional intelligence. For example, when I became an entrepreneur, I would meet my whole team on a Monday, on Wednesday I would meet the sales team and on Friday I would spend time talking about what we have achieved in the week.
Talk about your startup experience.
AA: I founded Retargeter in 2009 in a small office and we solved targeted display ads through a platform-based approach. We raised a very small round and bootstrapped it to profitability. As a founder, you have to decide the metrics and communicate them well.
I spent the first four years just focusing on that theme before we began to hit a big revenue run rate. The founding team is always closer to the founder, but as you get bigger, bring in new leaders. You need to create a space for feedback and as a founder, you need to be objective. You need processes and structures as you get bigger while the core values must remain.
I built a sizeable organisation before we sold to SellPoints in 2015. It’s also important for founders to know at what point they should sell a company and at what stage they have to bring in the right advisors.
What do you mean by right advisors?
AA: Entrepreneurs should work with folks who have been in the ecosystem and have deep industry expertise. I am on the board of several companies, and I can tell you that advisors need to be involved in a startup’s growth.
You need mentors where there is no obligation to give stake but when you bring in an advisor the role is to make the startup grow to the next level.
How should startups handle working with employees as they grow?
AA: Align incentives and ensure they are rewarded. There must be no mismatch in expectations. Founders should see talent and ensure they can perform their best. When you have reviewed don’t surprise them with things that you never expected of them.
That’s why I would say that it is a process and everybody should know those processes.
The founder values, the job description should be constantly communicated and work should be measured. In a high-performance team, one needs best practices, transparency, clear tasks and core values to guide employees.
A founder should be open to firing people. I still remember the first person I fired, it was not easy. But there is a way to do it and it is always about communicating in the right way.
What advice do you give startups when they come and pitch to you?
AA: What startups should do when they come to me? They have to tell me whether they are solving a real problem for a real set of customers. I am okay with people using buzzwords like AI, AR, blockchain and machine learning.
But they have to tell me how they have solved a customer problem. You can always raise money from friends and family and go after some early customers. But raise money only after you have customer validation.
I must also add that if you are doing pilots, do charge for them and learn how to price the pilots. Maybe you could discount the early product or charge a bonus when you create an outcome for the client. If you ask me about consumer companies, they have to solve a niche and scale very quickly.
Most importantly, their pitch should communicate everything in one minute and thirty-six seconds. Now usually it’s only two minutes that you get and if you have caught their attention you will get more time with them. There are too many pitches and introductions that a VC has to filter through and the entrepreneur should be on the money about their product and what it is solving.
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