(109) Learnings on navigating uncertainty in early stage startups from Shekhar Kirani, Partner at Accel

Shekhar Kirani is somewhat of a celebrity investor in India. He has guided investments into some of the best companies in the world like ANSR, BrowserStack, CareStack, Cogoport, FalconX, Freshworks, Chargebee and Zenoti — Freshworks which went public at NASDAQ with $10 billion. He identified all of these companies at the seed stage, many times when it was just an idea.

I heard him speak in a podcast with Chargebee’s Champions of Change.

Navigating the 'Haziness' of Early Stage Startups with Shekhar Kirani

Here are the key insights that I found were valuable:

1. Shekhar’s secret to juggling different startup contexts

Shekhar as part of his job meets 3–4 founders everyday. He looks for the following context when he talks to founders to make a decision whether to back them or not.

There are four contexts:

• Context of market
• Segment of users in that market
• Their perceived problems
• The founders thoughts of the problems and what they think is the solution and why it may or may not work.

2. Thinking about and understanding customers first

If founders cannot understand both the telescopic view and microscopic view, they miss out on how to make the products exceptionally well for customers.

Segmenting your customers is also very important.

It is becoming harder to really understand customers and knowing what is going in their minds.

3. The traits Shekhar looks for in early-stage companies

There are three core things:

1. The market
2. The team
3. The execution/performance of the team

Are the founders good at framing the problem?

If you start going to solution too early, and the problem is not defined right, its a path to failure. So, its important to know how deeply they have looked into the problem.

Have you picked the right mountain to climb?

The learnability index

Founders will have to always work in new circumstances like managing large number of customers, managing employees, taking decisions they have never taken before etc. The only way they can accomplish all of this is their learnability index has to be massive.

The decision making ability

How do they decide? Do they have a framework to decide?

It’s balance of all these things: patience, hustle and sense of urgency.

5. Shekhar’s prediction framework

Both startups and investors are in prediction business. I am predicting where the market would be, where the customers would be and where the competition would be? Directionally they have to be right so that they can course correct.

1. Understand whether your product is in pull or push market.

Pull market is when the players in the market have realized a need and they are already expressing the need in enough way that the rest of the market will follow. So, you need to be there to ride that demand.

Push market is where there is a problem and all customers know the problem and they suffer. But one or two deep founders say this is where my product can solve.

So the founders need to know where they are — push or pull market.

Also, the timing of being in market is important.

How big is the market?

Is the market growing or shrinking?

“Why now?” is also an important question to ask.