Introduction: Do Founders Need Prior Experience?
In the realm of entrepreneurship, there is a widespread belief that experienced founders possess a distinct advantage over their less-experienced peers. Many budding entrepreneurs are led to believe that they must amass years of industry expertise before venturing into the world of startups. But is this belief genuinely a game-changer, or is it somewhat overrated?
The argument in favor of experienced founders hinges on several factors, including industry knowledge, an extensive network, and a profound understanding of business intricacies. These attributes are often perceived as tools to make fewer mistakes and secure funding more easily. However, it’s essential to scrutinize whether these advantages truly translate into a substantial edge for experienced founders.
Knowledge comes from doing. The thing you want to know is the problem that you want to solve.”
In this blog post, we will explore the lessons learned from Sundeep Sahni, the co-founder of the UAE-based HealthTech startup Valeo, who also happens to be a serial entrepreneur. For context, before establishing Valeo in the UAE, Sundeep successfully launched two other startups in different Asian markets, all within the direct-to-consumer space. Sundeep will share with us the similarities and differences when it comes to building startups with experience under your belt, as well as the nuances of how it shapes the journey.
Industry Knowledge & Versatility
As Sundeep found success in a D2C business the first time around, he inevitably found himself preferring to establish more direct-to-consumer (D2C) businesses over business-to-business (B2B) models.
However, he ventured into various industry verticals — from e-commerce to logistics to healthcare. Consequently, he had to navigate the intricacies of each industry. Sundeep emphasizes that even within one country, there can be significant differences between regions. He believes that a business thriving in Dubai may not necessarily replicate that success just an hour’s drive away in Sharjah, a neighboring emirate.
This underscores the point that while prior experience in a specific industry can provide founders with invaluable insights into market dynamics, trends, and customer behavior, it can also inadvertently foster complacency or resistance to change. In contrast, inexperienced founders, unburdened by preconceived notions, often bring innovation, enthusiasm, and a fresh perspective to the table.
Networking Alchemy: Turning Contacts into Gold
Sundeep recalls how he was once a small fish in an already established pond when he was a new entrant in Indonesia and Iran, where competitors already had, and leveraged, their strong networks and relationships; a relatable dilemma for many new founders. What helped Sundeep, in this case, was his clarity and focus on his comparative advantage: He had access to more advanced technology from outside the region (India) that his competitors with established local relationships did not.
Established founders build extensive networks of industry contacts, mentors, and potential collaborators over time. These relationships offer access to resources, funding, advice, and partnerships that can fuel startup growth. However, Valeo’s journey highlights that even without local relationships, founders can leverage their comparative advantages to thrive.
Flexibility Rules
Through years of navigating the challenges of running a business, founders accumulate a wealth of knowledge about what works and what doesn’t. Experience hones one’s problem-solving skills and foresight, enabling one to tackle unexpected obstacles with confidence and agility and proactively adjust operations to stay competitive.
In Valeo’s case, Sundeep is implementing an idea he learned back in Tehran, with the Snapp Group, where he was discouraged from entering the ride-hailing market due to the small consumer base at the time. Still, through good forward thinking, his team saw the city go from 6,000 cars to 50,000 over three months. Sundeep’s learning from this experience was the perspective of customer convenience, one of the foundations for Valeo, as he believes that disruption in healthcare should center on catering to the needs of the customer, but is often overshadowed by considerations of doctors, insurers, and hospitals.
Experience can bestow founders with the ability to adapt to changing market conditions and shifting consumer preferences. This adaptability is invaluable for responding to unforeseen circumstances and pivoting when necessary, especially in markets with unique demographic and cultural nuances.
Learning Curve Overdrive
For entrepreneurs like Sundeep, continuous learning means not only keeping up with industry trends but also deeply understanding demographic and market intricacies. Each of Sundeep’s ventures has been vastly different from the last, in different regions of the world, no less, but he didn’t take past success as the definite roadmap to walk on; he continued to observe, research, and then adjust his learnings to best incorporate his venture’s next move, such as strategizing Valeo to revolve around premium care and be marketed towards a certain group of consumers, versus his previous ventures that were all about affordability and were geared towards the mass market.
The entrepreneurial journey is an ongoing learning experience, irrespective of one’s level of experience. The business landscape is in perpetual motion, with advancing technologies, evolving consumer preferences, and emerging strategies. Embracing a mindset of continuous learning isn’t just a means to stay competitive; it’s the path to innovation, adaptability, and sustained growth.
Cultural Compass
Upon inquiring about the challenges faced when expanding into Valeo’s next market, Saudi Arabia, the conversation unveiled the distinct nature of the Saudi market — a unique market where a strong physical presence is not just desired but expected. In Saudi Arabia, Sundeep says, it is considered a normal form of business communication for your clients to develop a relationship where they can call you late in the evenings or even invite you for coffee after working hours, a level of personal engagement rarely seen in most other markets where digital meetings suffice. To thrive in this environment, it’s essential to either fully embrace the local culture or establish a dedicated, culturally aligned team capable of accommodating such interactions.
Understanding and respecting local business culture is paramount for success, whether through a local team or personal engagement. It builds trust, fosters partnerships, and aids in navigating international markets effectively.
Diverse Tastes, Global Trends
Consumer responses to businesses can vary significantly across different countries due to various factors. Some countries are more forgiving than others, Indonesia and Iran over the UAE in Sundeep’s case, as the former countries, for example, were not as used to a fast-paced lifestyle, or there was simply not another alternative in the market to go to at the time. A website crash was met with significant patience and understanding and was not too dangerous to your consumer base in Indonesia and Iran. However, in Dubai, that same error could lead to a loss in consumer base and reputation, making it an issue of the highest degree.
Consumer preferences are shaped by complex interactions of culture, economics, and social factors. What resonates with consumers in one country may not appeal to another. Adapting marketing strategies and understanding cultural nuances are key to expanding globally successfully.
Choosing the Right Investors Beyond the Funding Game
For new founders, Sundeep emphasizes the importance of patience and finding the right investors. He stresses that VCs are not banks, as a VC’s role is not to provide quick, risk-free funding. Instead, founders approach VCs because they seek patient investors who are willing to dilute their ownership in exchange for support and mentorship, with the understanding that the business may not guarantee a 100% success rate.
Ultimately, the decision to engage with VCs hinges on the desire to have them on board as long-term partners in the venture. Recognizing the right investors aligning with your company’s vision and values is vital. It’s equally crucial to learn when to say “no” to investors who don’t share your long-term goals. Careful selection ensures not only capital infusion but also valuable expertise and industry connections.
Conclusion: Wisdom, Innovation, and Beyond
Valeo’s journey is a testament to the multifaceted nature of the founder’s experience. While prior experience offers distinct advantages, it doesn’t overshadow the potential of inexperienced founders, who often bring innovation and a fresh perspective to the entrepreneurial landscape. In a constantly evolving business world, continuous learning, adaptability, and a deep appreciation of local culture and consumer preferences are the linchpins of long-term success.
If you are a first-time founder, or one with prior startup experience under your belt, and are passionate about building innovative solutions in the Future of Finance or Future Economies industries and meet our investment thesis, we invite you to apply for consideration for direct investment. In addition to providing capital to support the growth of our portfolio companies, we offer our value creation capabilities to assist them in building commercial partnerships, receiving guidance from experienced experts, and more.
You can also learn more about our Direct Investments deal lifecycle process here.