‘Investors in India sometimes get away with what they do’

Pankaj Mishra November 16, 2018 16 min

As we get closer to the season two finale of Outliers Podcast, it’s amazing how the first episode with the Printo founder Manish Sharma set the tone. Over 78 episodes, Outliers has helped its listeners experience journeys of entrepreneurs and other professionals with candid insights on what works and what doesn’t.

At a time when India’s booming startup ecosystem is debating the issues of culture and entrepreneurial integrity, there are some deep lessons from Sharma’s journey. Thanks to Kanika Berry, we’re now publishing the full transcript of the conversations from December 2016.

Of course, it’s never too late to listen to the maiden Outliers Podcast with Sharma.

Pankaj: Welcome to FactorDaily Outliers. It’s a podcast about the crazy ones who are chasing their passions and reimagining the future. Each podcast is going to be a story of joy, pain, failures, triumph but everything told as it is.

This is the first episode and I am really happy to have Manish Sharma, founder of Printo and an entrepreneur I have always admired. In fact, I always looked back at our conversations and a very special one as a storyteller, that is, the story that I did not write. So without getting into the details, Manish, welcome.

Manish: Thank you for having me. Thanks, Pankaj.

Pankaj: You know the first thing Manish, did you ever feel like quitting doing this?

Manish: Did I ever feel like or the question should be how many times I felt like quitting? I think there were one or two serious moments when I thought that, ‘ya maybe I need to get out of this’. So yes, the short answer is: yes.

Pankaj: What were they, the long answer?

Manish: I think typically when you are 5-6 years into that business which you think that you should have built up in a couple of years and it takes you 5-6 years to achieve that and you see that it’s much harder than you thought and you say, ‘maybe the grass is greener on the other side, maybe I should exit if I can and maybe I should try something else and find someone else to run this business’. So I have had those thoughts and it would be dishonest to say that those thoughts don’t keep coming back. They do come back every now and then. Just in a site today, I was reading a company’s numbers and I said, ‘My god, the CEO gets paid which is something close to a big percentage of my revenue’ and it is a significantly loss-making company and I say, ‘Hey, maybe I should go and work for someone, I will go and work for him and he will at least pay me a third of his salary’. Yes, so we think about it.

Pankaj: You do! And how did you deal with those moments when you were building Printo?

Manish: I think there are two types of moments when you feel the goings are really, really tough. For me, luckily, when the going is rough from a business perspective, you know when there is a challenge, I actually get motivated. And I think a lot of us are, you know, suckers for the tough part. So when things are really messy, that’s when the best of us comes out. And I think that’s the easier one to manage. For me, what’s been more difficult is when not much is happening. You are neither shooting up nor you are saving the company and you say, ‘Hey listen, I am not growing fast’. That’s when doubt starts creeping in. So I think I am one of those guys whose ideal mind is clearly the devil’s workshop.

And the way I have learnt to cope with it… if I find projects within the company, I can go and execute. So what I typically did was, the last time I had this pang, I went and started a separate subsidiary which is a mobile printing company. So you know, you print from here, you have an app, so we built a company called Pi, I got couple of co-founders and we set it up and we had great fun. So we rolled it into Printo, you know a few months ago, so it was my way of reliving the initial days of an entrepreneur which are the most exciting.

So I think, I now have become more aware that is happening to me, so let’s do something else, let’s go and find a reason to subdue this frustration. And where Printo is today, it mostly happens because of boredom perhaps rather than, you know, something that’s really, it’s like the sky is not going to fall down and ask but whenever I have that, I don’t have a problem of quitting, I get motivated with those problems.

Pankaj: Where you are at Printo and the boredom that you talked about, are you happy with where Printo is?

Manish: No, I am not. I will be with a naked truth, Printo is at about 10% of what I’d thought it would be 10 years ago. So, I am not. But when I sit back and I accept this area, then I start being kinder to myself and I say, ‘Hey listen, it’s not a bad job you have done and it’s growing. Maybe the expectations that you set for yourself weren’t realistic.’ I think a lot of our happiness is based on expectations that we set for ourselves. And, as entrepreneurs we tend to set unrealistic expectations, so it’s good to go and correct that.

So, I am answering this, perhaps a follow-on question: how do I deal with it? And I think I deal with it by correcting myself, looking at the positives and now when I look at business, when I put on the next 10-year hat, I think I am going to be less foolish in setting my own expectations and, hence, perhaps happier at the end of it. So I don’t know if I answered your question, you know I am here to give answers but it’s a yes and no.

Pankaj: It does answer it and like you said, it is the naked truth. One of the things that stands out in all our conversations is your experience with the investor. And, that’s Sequoia. Do you want to touch upon it like what that really means or meant for you as a founder, as an individual?

Manish: You know surprisingly, Pankaj, this is not a… for me this is a part of the journey. I don’t think it really shook me up completely or you know it was a near death experience. I just feel that, ‘Hey, this was a known devil’, I should have known that this happens. Yes, there were some experiences which were completely undesirable. When I look back, I said, ‘It’s really stupid that investors in India sometimes get away with what they do’ and when I speak to some of my investor friends, they say ‘It’s really stupid how entrepreneurs get away with what they do sometimes, you know, in terms of corporate governance.’ So, I don’t think it’s been as difficult and I think today when I look back I say, ‘Hey, we all made mistakes’ and I do see that some investors will make more mistakes than the others, some will be less honest than the other, and you just play the cards that you are dealt with.

I think what I am more passionate about is ensuring that everybody knows about this because it is important to have that information that besides the gamble of entrepreneurship, there is also a fact of (a) not sticking to your word which kind of skews the entire fear and especially against the entrepreneur, if you are a young and small entrepreneur. That’s what I talk about and I say, ‘be careful about that’ and I think the ecosystem is already maturing. So people are going to be careful when they sign agreements and when they talk about dishonouring contracts, there will be a second thought.

Pankaj: if there are three things that you would like entrepreneurs to look at when they are dealing with an investor, what would they be?

Manish: I think (a) try not to be with an investor.

Pankaj: You end it right there.

Manish: (b) try to see if he is a reasonable bloke you like as a person. Somebody you gel with, vibe with and not somebody you are trying to make a sale to. He needs to appreciate your business more than you do from a different angle. So I think that’s extremely important. So that sets an equal playing field. I think these two things are extremely important, right!

And third is, don’t expect advice, value add. And as soon as a guy says, he gives you a lot of value add, you got to run away. It’s like a salesman coming in and trying to tell you, ‘there are 20 features of this remote control, right!’ And you know, you used to come home and try to sell things to your mom and dad and especially moms’ when there was nobody at home and you know, sell some fancy electronic item, today what you see on Naaptol. So avoid that. These three things that’s what I would say.

Pankaj: I think ever since you started talking very openly about that episode, a lot of entrepreneurs would have reached out to you. So, it’s one thing to stand up and speak the naked truth like you call it but how do you deal with this positioning of, ‘Hey, you know, this is the guy who took them on and let’s go and learn from him’? How do you deal with this new positioning? Is it tough, easy, what is it?

Manish: I don’t think it has been tough at all. I think for me it’s been surprising the number of people who reached out to me because I didn’t expect this to be as rampant and it’s not just with large funds, there have been small funds, some well-known funds. I actually was very happy to be in a position to help them because I wish I was in that position at some time, I was in their position and I could get help, that didn’t really happen to me. And I don’t think there is any conversation with any entrepreneur where when they thank me and I say, ‘No, no, I have learnt something from you as well’ because I would have learnt something about their business, I would have learnt something, if not today, not in that conversation, some other conversation and I think entrepreneurship and you know, our whole ecosystem should be about learning from each other, subtly without talking down to anybody because I am sure tomorrow morning I might make a massive mistake… So, we got to remember as entrepreneurs we are always going to do that. So, I don’t think I consider myself any superior position out there.

I think I have also dealt with investors who said, ‘Why did you do this?’ I remember meeting an investor who said, ‘Look, I’d love to invest in you, incidentally I don’t want to land up on the front page’ and I said, ‘Look I don’t go out trying to land up on the front page that way’ but it’s healthy for the ecosystem that such news is out there both for news about companies where there were corporate governance issues with the entrepreneur and vice-versa about investors which did not adhere to the contract. I don’t think it’s really as big a deal as you are making it.

Pankaj: Were there any horror stories? What I am trying to understand is when entrepreneurs reached out to you, were there instances and stories that you heard and you said, ‘Boss, yeh nahin hona chaheeyeh, this is just not done.’ Were there instances like these? Could you pick one or two as anecdotes?

Manish: I remember one very young company, the entrepreneur reaching out to me and saying, ‘Hey, I have decided to wrap this up, things have not moved on.’ He spent five years in that business, was promised a couple of crores, finally was given only a little less than a crore, the money is over, he has been working hard for five years and he says, ‘Ok, I just want to go and take up a job and I am done with this and close this down’ and the investor said, ‘You can’t get out of this place unless you pay us our money back.’ I say, ‘What?! Do you understand there is an equity investor?’

What shocked me was as much as the ridiculousness of the investor but I can expect them to have this duplicity but the naivety of the entrepreneur saying, ‘Buddy, you don’t owe them anything’. And then I realised that our ecosystem is yet evolving and maybe this guy was just like a lot of us, right! This middle class issue of equity’s like debt and he says, ‘I got to give this back.’ And it took me a lot of time explaining to him, you are not obliged to give this back to them and he was not even calling me for help on that side. He was saying that ‘Should I give them part of my salary which I am going to make over the next 4-5 years, how am I going to structure this?’ He wasn’t saying, ‘How do I get out of this?’ And when I told him that ‘Buddy, you need to get out of this’. He was a guy who had not drawn a salary for many years of those five years and this is what investors ask them to and investors are getting away with this. And this was a well-known fund, so I was shocked.

The other thing that was rampant is how investors wrong the entrepreneurs, made a plan and said, ‘Let’s go and let’s just set all the engines at fire, let’s move on, let’s fire this up, step on the pedal. And, then after sometime just suddenly said, ‘Hey listen, there is no money available’ and (had) said ‘no, no money is always going to be available, don’t worry’ before that. I think that was the challenge which I kept seeing. I must have had 7 or 8 such instances where they said they pull back the money when they promised it. And I didn’t know whether to call the investor a cheat or the entrepreneur naïve, to say, ‘Hey, where is the agreement?’ whereas in some of these cases, this wasn’t in the agreement.

So, I think without going into some of the specifications might be difficult but I was shocked especially at the very early stage, the seed stage. One another incident was from a Bangalore company itself. The guy was doing a 4 million dollar profitable business and he grew it to 6 million dollar profitable business and he took it online, worked with a very large VC on an online business which required him to shut-off his physical business, his profitable business and take the revenue down to zero and he raised the money on this plan which the VC wanted him to execute. When he took it down to zero and he realised that I will need a little more money than what I calculated, the VC said, ‘no way you are getting that money’.


Pankaj: No kidding.

Manish: Yes. And this guy was furious, completely furious and he met me and I said, ‘Buddy, you have made enough for yourself’ and you are looking for advice from me. And then I realised that he wasn’t looking for advice. He was just furious and he wanted to speak to somebody about it, vent it out. And I was shocked as well. And he luckily thinks that he has been able to buy out some of their stock and make it a little more equitable but such stories kept coming out.

Pankaj: This is clearly a topic that we must keep alive. And, guys, if you are listening in, write us an email at outliers@factordaily.com and we will ensure that Manish and I sit together again and try and answer some of the specific questions that you could post to us.

Before we sign-off, Manish, I have known you, your wife Lalana, a little about her from you. How is the entrepreneurial journey when you have a co-founder or a partner like that, I mean, is there a playbook for that?

Manish: Yes, that’s interesting. I think it can be fairly difficult and I think we had it easier because we don’t have kids and you know, Printo was our baby in that sense. But at the same time, we realised after few years, that it doesn’t give you any room to relax. You are talking work at work and you are talking work at home. So, you should infuse some relaxation, artificially in some way or the other. And I think that’s the tough part but we were so culturally aligned on the business that it was good fun. We were always solving problems, always talking about work, a lot of our friends were irritated but you know, we used to come directly from the shops and we used to always show up at every friend’s dinner in our uniform. So, in hindsight, it was much more fun than what we make it out to be, we always tease each other, ‘Man, it was impossible to work with the other person’ but I think it’s fun as long as you can keep the fun on, it’s great. The day it starts changing, recognise that very quickly and do something about it.

So, I would say, the one pact we had was that we will disengage from each other very quickly. We will disengage from this, we won’t do this business for life, together. So 5 years, 7 years maximum. Actually, I’d said 5 years and then at the end of the 6th year, Lalana started disengaging and she is yet on the board and we found a replacement and that’s how we did it. I think that kind of worked out.

Pankaj: Thanks, Manish. This is the first episode for FactorDaily Outliers and we couldn’t have started with a better person to talk to and guys like I said, send us an email at outliers@factordaily.com and look us up on Twitter. Thanks so much, Manish.

Manish: Thank you very much. Take care, bye.

(Kanika Berry has a Masters in Business Administration and has been a communications specialist for over eight years.)


Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures, Vijay Shekhar Sharma, Jay Vijayan and Girish Mathrubootham among its investors. Accel Partners and Blume Ventures are venture capital firms with investments in several companies. Vijay Shekhar Sharma is the founder of Paytm. Jay Vijayan and Girish Mathrubootham are entrepreneurs and angel investors. None of FactorDaily’s investors has any influence on its reporting about India’s technology and startup ecosystem.