Thursday, September 9, 2010

Interview With Nandini Hirianniah, The Morpheus

Featuring Women Entrepreneur
Nandini Hirianniah
Founder-Partner, The Morpheus
[Category: Emerging Markets & Trends
Exploring New Definitions]

Today India is on an enviable growth trajectory - a truth well discussed across the globe. Entrepreneurship culture is taking on a big way to be one of the contributors to our economic growth. In the next five years the entrepreneurial drive, that India is witnessing now, will make a significant difference in our economy. But the truth is that the Entrepreneurial Revolution happening in India, has little organized support structure.

This is where The Morpheus has stepped in, providing a 'Mentor Only' formula to the early stage start-ups which need support the most. The Morpheus was formed with the aim of working with early-stage start-ups as a limited co-founder who is experienced and well connected, and also as a mentor with hands on participation across different functions like product design, technology, operations, marketing, sales, fund raising, team building, finance etc. With their passion, love and commitment to early stage startups, The Morpheus engages with such startups in the most crucial phase of their existence, the first 12-18 months. Though The Morpheus started as a "Mentor Only" model. but they fund 5 lakhs INR to each company they work with now.

Read on my interview with Nandini to understand more about their formula. 
1. I would like to start with knowing a little about your background – education and past work experience. Do you have entrepreneurial roots?
I spent my initial years in Bangalore, that’s where I hail from. My roots are typical Indian middle class family; my father was a teacher – taught Civil Engineering & later opted to become a television actor. His interest was theatre and he and my mom have been running an amateur theater group for over 30 years now. My mom used to work with HMT, but gave up her career for her children. So, I do not have any entrepreneurial / business roots what so ever.

When I was in high school, I had a firm thought that if I did anything in life, I’d do something that’s very different than the majority. After 10th, I saw most of my peers chase Math/Physics combination courses, but I opted to do the Arts – not that I had less percentage, but out of choice. I wanted to also do something that was adventurous – and then Investigative Journalism seemed most exciting (also thanks to Shekar Suman in his Reporter avatar!)
I went on to do a BA in Journalism, MS in Communications. So, I am qualified to be a mass media professional, I also have a film certification from San Francisco State University.

I explored journalism – print and television, then I explored various forms of mass communication, my interest till date lies in the semantics of communications – what’s being said to what’s being understood. I was gaining experience & saving up to start my own production house. Before I became an entrepreneur – accidently!

Experience-wise, I’ve taught communications at a few colleges and schools, I’ve worked with a few media houses – print / tv and radio, also worked with a few independent filmmakers, worked with a few corporate / technology companies in the past, before I started my own company.

One of my passions is theater; close second is adventure sports- trekking & mountaineering. Also played cricket for the state in my past life!

2. Is this your first entrepreneurial venture? If no, then which were the earlier ones? Are you still involved in them?
My first venture was called Madhouse Media, pvt. Ltd. Which I co-founded with Sameer Guglani. It was the first company in India to attempt organizing the Movie Rental Industry. We ran an at-your-doorstep movie rental service with good quality legally procured DVD/VCDs. Madhouse was started as a pilot venture in Chandigarh & later expanded to Delhi-NCR too. After successfully running it for 3 years, Madhouse was acquired by Seventymm – one of the largest Movie Rental Services in India currently. I was involved with Seventymm for a year and moved on to start another venture.

I co-founded Mobile Life with another friend, where we were trying to bring web on SMS – to benefit those who have a regular mobile phone with no Internet capability to access information via SMS. I moved on from here to co-found – The Morpheus, which I am currently a part of.

3. What did you learn from your earlier ventures?
Being a first time entrepreneur, teaches you a whole lot of things. It’s like looking at life a-fresh. It taught me to make quick decision, to think fast, learn from my mistakes, rectify them quickly and make things work. It helped me survive like a cockroach – anytime/anywhere! Taught me that help can come from anywhere – don’t be closed to it, as you need all the help & support that you can get to make your venture work. Made me realize that there are far too many good people who want to help you in your entrepreneurial journey. Taught me not to do things to please the investor or raise money. Taught me that the buck stops at the customer! And many more things!

4. How did you arrive at this business idea? When was The Morpheus formed?
When Madhouse got acquired, we realized that other startup founders / people who were looking to start out saw value in our story and experience. We were informally helping a few startups out too. Also related was our experience with advisors at Madhouse, some of them added no value at all or did not care enough about our venture – it was just a name on paper. The experience we got from our first venture coupled with the learning from the advisory panel indicated to us that there was an opportunity in mentoring. But we were unsure of how we would go about it, what the model would be, etc. We did some study of the current incubator / advisory / business accelerators models across the world. Considered the challenges the startup eco-system India has and then rolled Morpheus in a basic avatar.

Though, Instamedia (then Instablogs) was one prime reason that pushed us to figure out a formal model, as Ankit, Founder of Instamedia saw value in our experience and advice and wanted to formalize the engagement as he could command over our time, when required – which would not be possible if it were informal interactions.

The Morpheus’ first avatar was called Morpheus Venture Partners started 2.5 years ago, sometime in 2008. We renamed it as The Morpheus sometime early this year.

5. It is very interesting to know about Morpheus’s vision of contributing towards India’s Start-up Revolution. It’s truly awe-inspiring. How would you define your business model?
We are a micro VC firm that provides help and a small amount of investment to promising young startup teams in return for some equity. Our main value is the experience and mentoring that we provide to these teams. Another added value is the Morpheus community of entrepreneurs called “Gang” that is growing strong which co-learns and supports each other.

We work with 2 batches of startups each year, in what we call Business Acceleration Program that runs actively for 4 months. The selection is mutual where startups see value in us and we see potential in startup teams. Morpheus takes equity in exchange to the value we provide. Post the active 4-month program, Morpheus supports the startup for its lifetime, on as-needed basis.

6. What in your view is the potential of the market that you are addressing? Do you have competition? How do you differentiate yourself from NSRCEL at IIM Bangalore?
On an average about 2500 new startups are founded every year in India, this is just a crude calculation. Out of which which, roughly 25% (625) of these are quality startups that grow and strive to become successful. The rest of them die a premature death or are not significant. The fact that these many ventures start-up each year is testimony that there is an inclination towards entrepreneurship in India. Also, closely related to the no. of startups is the quality of the founders - which is getting better and better as many educated youngsters are opting to go the entrepreneurship way. This is a huge potential for entrepreneurship in India, and The Morpheus plays a very small role in helping these entrepreneurs in accelerating their business!

For a nascent and increasing market, its not competition that one needs to talk about. It's the eco-system. In the growing and evolving community it is important that many similar models co-exist to strengthen the system. And i am glad that there are entities like iAccelerator, various incubators run by the IITs and IIMs in the country. There are also organisations like NEN who contribute towards strengthening the eco-system.

The incubators that are run out of IIMs and IITs are quite different from The Morpheus. In that, The Morpheus is not a physical incubator who provides space and infrastructure to companies. We believe that its important for the start-up to stay and execute from a location that is convenient to them - either from customer perspective or their personal economy perspective (may work out of their homes where they don't need to pay for stay and food). Our's is a virtual interaction with face to face meetings as required. We align ourselves with the goals of the start-up, figure out milestones for the venture and help the founding team achieve it by working as limited co-founders ourselves! Our main value is in this. Another huge value of The Morpheus is its ever growing community of entrepreneurs whose high level of interactions helps them learn from each other and contribute to each others evolution!

7. What is your revenue model? Is it equity-based?
Yes its equity based, with an option to dilute some holding at an event of IPO, Merger & Acquisition or secondary sale of shares.

8. Morpheus works as a limited co-founder during the first 12-18 months of a start-up. Don’t you think at this stage it is very difficult to judge whether a start-up would survive or perish? In other words, how do your identify the early stage start-ups, so as to ensure your share as a limited co-founder?
It’s the founders and the founding team that we invest in. A team that has a never-die attitude is smart enough to learn, accept constructive suggestion & execute quickly. We deal with companies at a very early stage and here it’s the team behind the idea that matters the most, as ideas get morphed or even changed depending upon the need & potential.

9. Are you profitable now?
No. Not profitable. Traditionally, VC industry returns start after 5to 7 years and we are just 2.5 years old.

10. Did you start this venture alone, or with a co-founder?

Sameer Guglani and I founded The Morpheus. We added a third partner, Indus Khaitan, a year ago.

11. What has been your strategy to find a co-founder?
No active strategy. Sameer and I started our first venture together and working together again was definitely an option. It works well, since you have figured out a balance of working together and also know each others strengths and weaknesses – makes things a little easier to do another business together!

12. How did you manage all the work of a startup on your own? When did you hire your first employee?
We do not have employees. Actively, between the 3 partners we can cater to 5 companies each, spending 15hrs per week with each of the companies. That’s not a toll.

We try and do some planning and coordination and also not all of it is face-to-face interaction – we maximize the power of technology in remote communications!

13. How have you funded your business (starting from when it was incorporated)?
Self-funded most of it. Recently, we raised a small fund that we use to invest in companies we work with. But costs involved in running Morpheus are still self-funded. All 3 partners chip in our savings for the same.

14. What have been the challenges – finding the business partner, financing, recruiting, selling etc. Which in your experience has been the most difficult challenge to overcome?
Validating the Morpheus model. We realized that the Indian startup system needs mentoring, active handholding more than investments. But the mind-set of entrepreneurs was “give me the money and I’ll build a business”. So, when we started Morpheus we did not fund companies but our value was only active mentoring and help. We were wary of the value entrepreneurs would see in such a model, but 2.5 years and 20 odd startups later – that bet we took by launching “Mentoring Only” model worked well. That was one important validation for us.

15. Last, but very important, a little about your family – how did you manage to strike a balance between the home, kids and the new venture?
When what you do is your lifestyle & you enjoy doing it most – all else can be worked around with! Incidentally, Sameer and I are husband-wife too. So both of us doing this full-time, is a balance struck in itself as we understand what it takes to run a venture and what it takes to run the house and balance it out well (or at least try to!) We have an 18-month-old girl, Sanaa – who has a very understanding and great attitude. So, guess over the years, she’s also going to be a bootstrapper like us, experiencing life to its fullest. Of course, family (parents) is of great help here, they support us as required in taking care of Sanaa.

Thanks Nandini for your time and insights.

Note: The Morpheus is opening applications for Batch 5 of their Business Acceleration Program starting Sept 10th. Interested people can look up http://themorpheus.com/apply/


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