Jairaj Mashru, Founder-Bombay Innovation Group & Venture Partner – Z Nation Lab, In Conversation With LogiNext
Innovation is the driving force behind progress and eventual success. To educate us more about innovation, technology, and growth we invite to our interview series the versatile investor and innovator, Mr. Jairaj Mashru. With his vision and intellect, Mr. Mashru has been a helpful guide to many entrepreneurs, seeing them off to profitability. He set up the Bombay Innovation Group to provide a strategic launching platform for multiple entrepreneurs, honing and streamlining their value propositions. Mr. Mashru rounds off his support to sustainable development as the Venture Partner at Z Nation Labs. Let’s move into our conversation as we are keen to get to know more from the man himself.
LogiNext Team (LT): Welcome to our ‘In Conversation with’ series where we interview industry leaders and engage them in our collective endeavor to gain an intellectual dominance over innovation.
Jairaj Mashru (JM): Glad to be here.
LT: So, getting right to the point, we want to ask you about Indian economic reforms. Can you highlight the latest investment trends post demonetization and latest budget? Will we see big investments in 2017?
JM: Not an expert in such matters, so I can only say that the inter-dependency of geopolitics and economics means that investors will seek stability and predictability.
As long as India can continue to demonstrate steady (and not too slow) progress in areas such as Ease of Doing Business, Fighting Corruption, GST, etc. we will remain a preferred destination for global investment.
Just our GDP growth and other macro-economic measures are no longer enough; we need to offer a full package of benefits with least amount of pain/friction points to attract more foreign investment.
LT: Which sectors will attract more attention for the local and international investors in 2017? Do you see B2B startups overtake the B2C startups in terms of attracting investors?
JM: I think so. It seems the recent down rounds indicate that investors are waking up to the ground realities of their investments in B2C, especially the most popular e-commerce sub-sectors. Now is the time for Indian Entrepreneurs to show their diversity and pragmatism in the business opportunities they pursue. There are unsolved problems everywhere, in every sector; some problems are even being created by existing solutions as we speak. So, smart entrepreneurs will try to solve them and create sustainable business models around such solutions.
LT: Logistics, especially last mile fulfillment and field service optimization industry, has gained a lot of popularity with many technology providers entering the markets from 2015 to 2016 and big mergers and acquisitions like Fleetmatics being acquired by GE and Ship-Express by Verizon. What is the future that you foresee for this industry?
JM: I find this a very fascinating space to watch, for two reason – (1) The size of the opportunity and the need for a diverse range of solutions, (2) The unique challenges that lie within the logistics management sector in India for reasons such as landscape typography, state of national infrastructure, cost constraints, etc.
The future will belong to those who can create value in just-in-time solutions for niche segments and become an affordable and reliable partner to their customers.
This means further investment in technologies that boost efficiency, real-time planning, expand reach and make new services possible.
LT: With your comprehensive experience and understanding of the US markets, what are the key economic learning that we can derive from the latest elections and Donald Trump’s administration?
JM: This is obviously an on-going episode that has just now begun. It remains to be seen how much Trump will succeed in making the proposed changes. In general, I wish the power of collective reason will prevail in the end and prevent most of the potential long-term damage.
LT: A lot of speculation is around the H1B visa, a few experts suggest that companies would move complete divisions to India and other countries with low labor costs. How do you think would this affect the Indian economy?
JM: Not my area of expertise, but all I can say is that any changes in H1-b visas that incentivize Indians to come back is good for the Indian economy provided we can absorb them well in the local economy and prevent a crisis of underemployment which can fuel civic and economic dissent.
LT: If the above scenario is true, what are the measures that Indian government should take w.r.t. further economic reforms to leverage the most out of this. Should protectionism for Indian startups be removed to accommodate healthy global competition?
JM: I am not in favor of protectionism because it is not a permanent solution. At best, it can temporarily provide some misguided relief but in the long run, protecting our startups will only disincentivize them to innovate. The best thing about startups is that they try to fill the gaps that remain unfilled by bigger companies and this generally requires some innovation.
Startups are also expected to challenge the status quo and disrupt their sectors with new business models.
Protectionist measures will do a disservice to our nation in this regard and we will continue to see “me-too” startups being born, plateauing and dying a slow death. And in its wake, we will create a generation of disheartened entrepreneurs without the sharpest skills to innovate or compete in a global economy.
LT: What according to you should be the ideal entrepreneurial traits that would instantly attract investor interest? Can you share a few valuable tips for young startup enthusiasts who have stepped into the investor pitch phase?
JM: Investors like to fund people more than they like to fund ideas/businesses. But they like to evaluate both. They will evaluate ideas and businesses in quantifiable metrics but it’s not as easy when it comes to people. So…
It is key to show investors who you really are as a person and what you are made of, beyond mere academic and professional qualifications.
Problem Expert: Show them that you fully understand the problem you are trying to solve and you know a lot about the people who face this problem. Validate the problem and test more than one solution to prove how yours is better. Most often, investors and entrepreneurs realize much later that they were solving/funding the wrong problem, or that they weren’t addressing the most important part of the problem from their customer’s point of view. They didn’t know their customer and their problem well enough.
Business Acumen: Show investors that you can convert opportunities into business. It’s great to be creative about building new solutions, but Innovations require sustainable/scalable business solutions and leadership in order to succeed in competitive markets. Investors want to see that you can build and run a business without constant adult supervision.
Past Failure: This is the most reliable indicator of future success, if properly used.
If as an entrepreneur, you have failed before, then show how you handled that failure, what lessons were learned and changes were made.
This reveals much more about the character and potential to handle unpredictable challenges of the future. It can be portrayed as a great strength and motivation factor to convince investors.
LT: Talking about booming industries and startup trends, which industries do you feel will see more entrants by 2020- Health/Pharmatech, Fintech, Logitech or Edutech? And Why?
JM: Frankly, I hope to see more entrants in sectors beyond these usual suspects, such as Aerospace, Urban Mobility, Upcycling Waste, etc. But of course, we will also continue to see new startups in Health, Education, and Logistics, etc. but even there,
I hope niche spaces will find new players such as Drone Deliveries in Logistics, or new technologies for handling the logistics of Blood/Organs, etc.
There are so many opportunities and so many unsolved problems that still await a disruptive solution, and startups are best poised to address them.
LT: What are the future disruptions that you expect to see in the space of logistics and field service optimization technologies, especially the last mile leg which gained more popularity due to the rising eCommerce and food logistics players? Will we see more investor focus on such start-ups?
JM: I hope so, because incremental innovation will only take us this far. Now it’s time to dig deeper and solve systemic issues and niche problems with new technologies that are future-proof and all of this will require huge investments in startups as well as large organizations. Use of Deep Learning in route mapping, Drones, Process En-Route Delivery, etc. are some of the potential areas for innovation.
The logistics sector needs to take a new perspective towards disruptive innovation and shift focus to blue ocean opportunities. The early birds here will remain relevant, the rest may be forced into consolidation or extinction.
LT: For a bootstrapped startup, which is 1 to 2 years old, what is more advisable, to opt for an angel or seed investor or pitch a venture capitalist? Why?
JM: It really depends on what traction levels they have, how much money they need and for what purpose exactly, how aggressively are they poised to grow, and if they need support in other areas beyond funding.
LT: Thank you for your time. This has been an extremely knowledgeable experience.
JM: It’s my pleasure, thank You.