Welcome to the Matrix Partners India blog – “foundersfirst!”

Read Time: 5 mins

 

So we finally took the plunge at Matrix Partners India and decided that we should have a blog! To address the obvious question given that blogs are so “a decade ago” – what with Twitter, Quora, Podcasts, Snapchat being the latest means adopted by VCs – why now? Well, because this seems like a saner time than usual to think and act long term!

I have been in this ecosystem now for almost two decades and have therefore been privileged (and pained) to see many cycles. And now watch with (greater) detachment the manic–depressive behavior from all involved – be it VCs, Founders, media, LPs and others – that accompanies each cycle with amazing regularity. The present period is probably one of three “normal” periods that I have seen – neither a boom nor a bust! All our best investments have been made in such (or bust) times so we are even more excited to partner with the Founders pursuing their dreams in this period. As an aside, I believe that boom and bust cycles are inevitable in this ecosystem – as they are in the economy as a whole and startups ride the amplified version of that wave. Also, innovation involves creative destruction – hence destruction after rapid creation. So, cycles are normal and inevitable – how we react to them and what we do when in them is more in our control. But easier said than done.

So, amidst the current tepid time in the Indian startup and the venture industry, we at Matrix feel the most excited we have ever been in the decade plus of investing in India! 2017 saw a significant drop in company creation versus 2015 and even 2016, but it was also the year that had a sizeable increase in the amount being funded into startups with the Big 3 – Paytm, Ola and Flipkart – topping the list. 2017 was also the year that has seen the highest number of investments made by Matrix, and the momentum has continued into 2018.

The core drivers of value creation for Indian startups are in place and scaling – broadband mobile users, usage, monetization and leapfrogging opportunities. The details of this are for another post which I will leave to my colleagues – but suffice to say that we are in for a decade long run of trillion dollars plus of value creation. Who will capture the value that will inevitably get created is the only question. Our job and aspiration is to be in business with a majority of the Founders who will do so. If you know anyone who fits that bill, please send them our way!

Now is the time to be excited. Now is the time to start companies. Now is the time to invest. And now is the time to start a blog (VCs version of a bold move)! smiley

And what better way to start our blog than to dedicate it to our raison d’etre – our Founders and title it foundersfirst! At Matrix, we pride ourselves on our foundersfirst!” values – and we strive to live by them by putting Founders’ interests first and behaving as service providers to them. “foundersfirst!” does not mean that we are tree huggers who do not look out for our commercial interests – on the contrary, we believe that the best way to maximize commercial returns for our investors is to invest in the best Founders and do our best to help them do their best. It’s the ultimate alignment of interests. And, it’s also something we enjoy doing! smiley What better way to pass the “shower test” every morning, than to know that you are partners with some of the best people working relentlessly on making a difference in the world.

So what does “foundersfirst!” mean for us? It’s like trying to define something amorphous (like happiness) – you know it when you live it and it’s a way of life! If that was too corny, let me try to give a more VC view:

  • At the outset – let me start by divulging the super–secret investing formula for Matrix: pick the best team pursuing a scalable, sustainable and differentiated business in a deep market with the opportunity to capture a big share of the profit pool! Damn – you knew it?! Clearly this is not rocket science. And no such perfect opportunity exists. So, where the rubber hits the road is where the above rule gets broken and exceptions made. This is where we are “foundersfirst!” (almost) to a fault. We will invest behind excellent Founders pursuing (seemingly) poor markets, but we will not invest behind average Founders pursuing excellent markets. We believe excellent Founders create excellent businesses which can create markets. Conversely, we believe that an average Founder may lose in an excellent market since an excellent Founder will ultimately show up to pursue it. We have followed this rule and broken this rule – and it has only increased our conviction and resolution to follow the rule
  • The Founder of Matrix Partners, Paul Ferri, advised me when starting out in the VC business – “always err on the side of the Founders”. Sometimes when the VC and the Founder are on opposite sides on issues, we try to remember “foundersfirst! and back the Founders where otherwise reasonable people might disagree
  • Behaviorally at Matrix India, Founders should feel that we partner closely and they are “first!” for us. Most of us endeavor to ensure that we prioritize our Founders needs over everything else – and remind ourselves of our role as partners. For example, I tell my Founders that they should hold me to a turnaround time of 12 hours on my worst day and I hope most of them would say that the reality is 30 minutes or less, more than a decade into the business and across many cycles
  • Everyone at Matrix India, including our operations and support teams, is geared towards being “foundersfirst!” – we are service providers to our Founders and every interaction (hopefully) reflects the same. Internally and externally, we refer to the companies more in terms of the names of the Founders than the name of the companies
  • Finally, the Founders don’t have to be in the Matrix Portfolio to be “first!” for us – we strive to be responsive, respectful and helpful to all Founders since we have tremendous respect for entrepreneurship and the sacrifices and path it entails. The Matrix India team often spends time helping Founders we do not work with – and we are especially proud of the inbound new deal references we get from Founders who we do not work with as an investor

And I could go on – the point is that we live and breathe this tenet. And am sure there are other firms who do it well. But if there is one thing that we want to be #1 at, it is this – first! at foundersfirst!”

Welcome to our blog – dedicated to the Founders in our portfolio who are a source of inspiration. And to those outside for their contributions to the ecosystem and with the plan to work together in the future!

We hope to post something (hopefully) interesting every once in a while, my colleagues have previously shared their views, here.

Look forward to your comments.

God Speed & God Bless us all! @avnish

 

To know more about Avnish, click here.