And then there was light…

There comes a time in every venture’s lifespan when it needs to scale the mountain, round the bend, bell the cat, bite the bullet – or in layman terms: Start running on its own cash flow!

There is only one thing that I can say for this event: Its a proud moment, and an EXTREMELY liberating one. FYI: We arent there yet – but god willing, we will be there by end of next month. We eat what we reap. We start generating positive (monthly) cash flow. We have enough commitments from our clients to become operationally break even next month.

Its been a long journey – and could have taken much longer. It started when there was the ‘Inception’ of an idea in my head by a gent called Krishna Jha. Krishna is a partner at TelNet ventures and a previous entrepreneur with experience of building and exiting a business in the telecom space. I had met him at Proto and had interacted with him many times. He had come to our office a couple of months back and at that time, we were clocking Rs. 40K per month. Krishna’s advise was to triple the revenues – Bring it upto 120 K. His words were “Simulate a kick in your balls. Right now – you are running on the cushion of investment – Simulate a scenario that you dont have that much cushion.” The idea stayed with me – and morphed into a bigger hydra than what Krishna had suggested. Why some? Why not NO cushion?

We thought about the ways and means of enhancing revenues to become operationally break even and yet keep growing. We thought hard but not for long. We did only two things:

1. I went back to our investor (who had committed SGD 1Mn of which we had utilized 15%) and said with a lot of difficulty: “No more money please. We have decided to live off our own produce. No more ‘Khairat’”. I think the investor was a bit taken aback at first – it isn’t often that they hear the entrepreneur telling them that we don’t want your money any more. The fact that he appreciated it much more became clear when he made me a director on the board of Regional Airports Holding International Ltd. (RAHI) <– that’s another story.

2. We got out there and started gunning for business. Raised the prices, went back to our clients and thankfully our product was good enough for them not question the raise in prices – but rather they came out and said give us 10 times more! We obliged. One client went from Rs. 20K to Rs. 200K in one month flat. Next month – they want to double that!

We are still a bit away from complete operational break even, but the ‘feeling’ that I am already getting is one of sheer exhilaration – and frankly, I cant explain it enough in words. Its a mix of the bubbles in the stomach & the twitching smile &  the jump up high & the scream out loud feeling.

So here we are: Some extremely marquee names as paying clients. Currently integrating on top of a unified telecom platform in India. International launch as a VAS service on top of probably one of the most innovative operators in the world in 2 months. 3G launch on an Indian operator (signed, done – launch whenever it happens). Brought down the sales cycle from 5 months to 1.2 months – and focusing only on the VERY big clients. And a situation where we will break even operationally in a months time. With all of 9 extremely dedicated and proud people.

Its too early to start taking bows. Its too early to break out the bubbly (we will have a nice session the day we actually get to operational break even). It is actually time to start taking stock of the much harder road ahead. Time to think about scaling while maintaining your own cash flow and business. When someone asks me about investment – I say that yes, we are looking to raise funds. Not because we wont get there, but because with the right ‘kind’ of investment, we will reach there faster.

A reputed VC recently told me: “Thats quite a bit of progress for a year of operations”. My response was “Not enough. Not nearly enough”.

Watch this space!

M