India’s startup scenario has exploded over the last decade, with a growing number of VCs showing interest in funding homegrown companies. Indian entrepreneurs are building in India, for India and the world. Without a doubt, this is only the beginning with bigger things to come. But, amid the glory and grandeur, it is also important for aspiring founders to bear in mind some ground realities while building a successful business. After all, “all that glitters is not gold,” and even gold requires considerable effort to shine!

For those who are just starting out, here’s an insightful Q&A session with Gaurav Samdaria, Co-founder of Karza Technologies and now CBO, Perfios.

• Can you tell us about how it all started for you at Karza?

My career journey began with quite a few short stints at multiple firms, where I felt somewhat dissatisfied when it came to my learning curve. It is at this point that I began giving serious thought to starting something of my own. A brief meeting with my then colleague and now co-founder Omkar Shirhatti ended up with a startup idea around P2P lending. But, after some thorough research of the lending ecosystem in India, we ditched the original idea for another pressing “need” we recognized in the BFSI industry. This is how Karza began. Of course, there was not much at stake when we came up with the concept, but the stakes got much higher as we began building.

Takeaway: For new founders, it is important to find a “need” or “cause” or “solution” that is absolutely pressing before starting up and then researching some more. If they are convinced about the need, perhaps, it is time to assess if they have the headroom to deep dive into it—essentially, evaluating what is there to lose if they gave everything to building on the idea.

• What are some challenges you faced in your early days that you may want to warn new founders about?

In the early stages, one challenge I faced (and many new founders may face) is that of overoptimism. Having stumbled on the possibility of a building something new, many young entrepreneurs may be excited and overconfident about aspects like fundraising, finding a co-founder, product market fit, adoption by clients and so on, especially in the D2C business. My advice to them is to recognize and accept the uncertainty of it all. Remember, there are no guarantees, even after the term sheet is signed.

Another thing I find important to address is the aggressive use of the word “entrepreneur” or “founder,” which becoming more of a status symbol. It is rather used for someone who builds a successful business. Those starting out must focus on building a business that creates value for customers, shareholders, and employees first. And like in any business, your number 1 priority should be to try until you succeed.

Takeaway: Don’t go overboard on the optimism and aim for “creating” a successful business rather than “becoming” an entrepreneur.

• Does luck matter when you’re starting up or is it only hard work that matters?

Well, someone close to me once told me, “The harder you work, the luckier you get.” And I couldn’t agree more. There is no substitute for hard work whether luck comes knocking at your door or not!

• Do you think domain expertise is a must for founders, especially for tech-enabled businesses?

About domain knowledge, I just want to tell budding founders that you may not know everything about everything and that’s perfectly okay. But, you will need to eventually learn about all aspects influencing your business, either prior to starting up or on-the-job by recruiting the right people. Having said that, your core employees will make or break your company. Therefore, you will need to assess them stringently based on both soft skills and technical skills. This especially involves evaluating if their value system overlaps with yours. At Karza, we conducted nearly 700 interviews to find our CTO and tech co-founder, some of which were conducted in the presence of seasoned external consultants.

Takeaway: Don’t shy away from asking for help from experts, even if you have to hire external consultants where it is not your domain expertise.

• Should all founders raise capital?

When it coming to fundraising, there is no set formula. The fact is you do need capital initially. For us, since our very first round was from FnF (friends & family), it became our biggest motivation to succeed. We simply “could not” fail! So, whether one should raise funds would depend on their line of business, the gestation period, and so on. Founders first need to be convinced that they have a commercially viable product and then carefully assess the dilution aspect as well. This will involve making hard choices. If I were to make these choices simpler, I’d say that at a fundamental level, all choices should be governed by the need to run a profitable business. At Karza, we grew only in line with our earnings and were very frugal while raising our headcount.

Takeaway: Gaurav’s advice to anyone out there having burn in their model is to raise money only if you are certain that for every 1$ of funds raised, you will be creating $2 of value. If you plan to simply burn investor money, you will never value funds or be frugal enough them. Also, be mindful of dilution or by the end of it all, you may be left with a pea-sized stake, which will make you distant from the company.

• Do academics matter when starting up and raising funds?

For me, they do matter but only as a yardstick for rigor and curiosity. And regardless of whether I agree with it, the reality is that being qualified from top colleges does matter to investors. It may also be an understandable criterion given that, at times, the closest proxy one has for gauging capabilities is academics and work experience.

Takeaway: Excelling at your academics and workplace only adds value to your profile as a founder. While it’s not the only benchmark, it is definitely an important one for investors.

• Your advice for those who face failure or rejection?

For those who encounter failure or rejection, my suggestion is to keep trying, but not at the cost of your personal responsibilities. One must get moving in life towards what really drives you—and you can achieve growth anywhere—in a job or in a business or as a professional. Of course, when just starting out, you cannot have failure as an option. Sometimes, the lack of a backup is the biggest motivator.

Takeaway: Keep moving forward, regardless of the set-up. Strive towards success in areas that makes you truly happy, whether it is in the form of a job or a venture.

• How would you like to sum up your advice to budding founders?

The final advice I’d like to give to budding founders is not to be over-optimistic and to work hard but smart. Be quick in your decision making, because a lot of lives depend on it. Be prepared to sacrifice things. Always strive for excellence with a genuine commitment towards achieving success. One thing I can promise is that the road will be rocky, but the finest steel must go through the strongest of fires.

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