Resilience and the ability to reinvent himself define Sandeep Murthy. In a career spanning more than two decades, Sandeep has changed lanes from investment banking to entrepreneurship to eventually, venture capital. His abiding curiosity about why the world works a certain way, the quest to learn something new every day, and a process-driven approach to derive outcomes from those learnings, form the bedrock of the philosophy, ethos and culture that drive Lightbox.
Sandeep is a builder of India’s technology-led consumption economy. A University of Pennsylvania and Wharton School alumnus, he is deeply interested in all things technology at the intersection of brands and consumption in the Indian economy. His venture capital journey started in 2005 with leading investments for Silicon Valley based Sherpalo Ventures in iconic consumer internet companies such as Info Edge and InMobi. He also played a central role in scaling online travel platform Cleartrip, a Sherpalo portfolio company, as its CEO for three years. In 2014, when startup consumer brands started to emerge as challengers to incumbent players, Sandeep decided to build a differentiated venture capital firm to address that opportunity and Lightbox was born.
His early investing experience, coupled with scaling Cleartrip and founding and selling a US-based digital music management startup to Sony Music, became the foundation for Lightbox’s hands-on, deep engagement investment philosophy. The firm’s willingness to apply a private equity operating engagement model to venture capital differentiates it from peers and drives value for investors. “We are betting on our ability to not just pick companies but work with them to create value,” he says.
Investing in startups, for Sandeep, presents an opportunity to work at solving hard problems that have the potential to exponentially impact large markets. When evaluating a startup, he looks for entrepreneurs who have unique insights into a market, are tenacious enough to turn those insights into viable solutions and an ability to think outside the box, while still working in a disciplined and structured fashion.
When he’s able to find time away from building Lightbox, Sandeep is most likely to be found shooting hoops at a basketball court or diving into the world of music.
“The past 12-18 months have been a time for introspection and setting the agenda to establish Lightbox as an organisation known for company-building. This involved aligning our investors (limited partners) and the team with the larger vision, resetting the process and culture of the firm and getting back to where we had started from. I had the benefit of being able to rely on core team members who had been part of the journey from the beginning or for several years to enable us to move back to where we wanted to be…”
Namita Gokhale, who is a writer, publisher, and festival director. She's authored many books and is the co-founder and co-director of the Jaipur Literature Festival. And we're going to talk a little bit about content, where it's going, culture, how it's evolving, and a little bit about how tech maybe playing a role in all of that through the lens that she's experienced.
On this episode, we're speaking with an expert in investment management, Martin Green, who runs Cambrian asset management. Martin has 25 years experience in the tech sector. He began his career at Morgan Stanley, where he was a senior executive at CNET Networks, which was later acquired by CBS and Meebo, which was acquired by Google.
A note on the happenings of the last quarter and state of the market.
Free money has disappeared. Vanity metrics are out. As the venture capital market resets, the Lightbox playbook of concentrated bets on differentiated, technology-enabled businesses, focused on India’s fragmented consumption markets is poised to deliver significant value accretion over the next few years.
For India’s startup and venture capital ecosystem, the election outcome is significant to the extent that a stable government focused on pushing through policy initiatives that sustain the economy’s growth momentum will further the creation of medium and long term value.
COVID-19 made its severity felt during this quarter causing widespread lockdowns and an already major dent in the economy. To prepare ourselves for the pandemic’s far-reaching consequences, we decided to take a look at where these implications might trickle down to, including the inevitable recession
Given the various inefficiencies that exist in India there is an opportunity for businesses to address customer needs through a range from pure tech models to tech enabled models where they own the creation of the product but use technology in aspects of either production, distribution or customer acquisition.
This quarter was rather eventful. We grew a lot more comfortable living and working in the midst of a pandemic. COVID provided us with a new lens to look at some sectors. We deep-dove into some of the major trends in the Indian startup ecosystem and consequently met some promising, relevant startups.
For us the true metric of success for any company in this space should be measured by the outcomes they deliver and not necessarily by the scale they achieve immediately. If a company can start meaningfully improving the lives of mentally ill patients it will be best placed to build scale further on.
A growing, powerful trend we observed in 2020 was the rise of Social. Not necessarily as a category by itself, but a powerful enablement tool in all the sectors. Just as every industry makes the crucial transition from analog to digital, nearly every category of company will eventually make the transition from single-player to multiplayer, from company-driven to community-driven, from individual to social.
The pandemic has turned the way businesses function, and even how investors approach them. Sandeep, in a conversation with YourStory, speaks about the changes the ecosystem has seen over the last year and what investors expect from entrepreneurs.
Read Sandeep's note on the quarter that was...
We saw fear driven adoption in 2020 and will see convenience and value driven growth in 2021. Consumers have experienced the benefits of product discovery and the ease of access to a breadth of products, that will make going back to the “old way” seem like moving into the Stone Age. Read on to see what we think will change and what won't
Gradual change doesn't disrupt life. It wears a giant stealth cloak of business as usual, while being pregnant with disruption. And then, sudden change makes everyone sit up!
True to his style - Parmesh Shahani wears many ‘fabulous and stylish’ hats, One of which includes being a writer and his most prominent hat is that of a scholar at MIT, Yale, The World Economic Forum and he’s also a Ted senior fellow; all of which gave him an opportunity to learn and understand the different aspects of the world we live in. Let's dive right into the conversation
Nisa Godrej is the chairperson of Godrej Consumer Products part of the Godrej Group. It's a business with diversified products across health and beauty, insecticides, and a variety of other areas. We're going to talk a lot about consumers habits, brand, sustainability, geographical expansion, product development, direct to consumer brands and just generally how the market has evolved over the course of the last year.
Each year we take time to study the latest trends playing out across India and try to understand what opportunities they may present entrepreneurs and investors. These presentations are an outcome of those efforts. We hope you enjoy reading them as much as we enjoyed putting them together.
"Whatever ramp time you are budgeting for in terms of demand coming back - double it. However long you think you need cash for - double it." When this is over, companies that have been household names will disappear and a new crop will emerge. How you prepare and use resources today will determine which group you are in.
As the restrictions pullback these new consumer preferences will become apparent. In the short to medium term consumers will disproportionately value transparency and hygiene. However, companies looking for long term sustained differentiation should also develop their ability to differentiate based on sustainability and provenance.
Understanding your feelings, or that of potential customers, is central to making connections. Using machine learning, data science and AI, HaikuJAM is able to understand the various moods of the writer, how they react to different topics and insights into how they feel about different situations, brands, or topics.
We are seeing a changing of the guard from old world businesses to new technology companies. This shift has been taking place steadily around the world at all stages across industries for the past 20 years and has accelerated in the recent decade.
As citizens of our planet we all need to be worried about what fashion is doing to our world. The fashion industry is considered to be the second most polluting industry globally. Bombay Shirt Company is synonymous with custom shirts. and going forward they have the opportunity to build a personalized men’s lifestyle platform that is financially and environmentally better. Technology will be central to facilitating this evolution with data being a key driver to understanding customer preference.
Chronic patients have no source of reliable information or network to rely on to help them manage their diseases. Doctors are short on time and pharmacies operate like dispensaries, dolling out pills alongside shampoo and mosquito patches. This is where Generico (now ZENOHealth) steps in. They currently runs a network of 40 pharmacies. These pharmacies sell pills but also provide a suite of preventive health services that give patients the solutions to managing their conditions.
Walmart is undergoing a metamorphosis; we are witnessing the emergence of the 21st Century Walmart.
Experiment, fail, learn and repeat. Try things at a small scale and at a low cost, and quickly assess if they work or not and then take a call on what is worth scaling up. The experiments should either stop or continue based on consumer feedback.
Your Product Is Your Business Model. Changes in one impact the other and in the best cases they play off each other.
We are technology investors, building new business models. This approach has served us well, but in the modern climate where technology is disrupting traditional industries.
Entrepreneurs and investors are jointly trying to imagine and create a new world. There is no straight line to this process… it is a series of assumptions and iterations – a process of Experiment, Fail, Learn, Repeat.
What started off as a simple goal to make the world a better place has turned into a race to make it happen within a certain time. Once you are sure about that, take a deep breath and get ready to jump on the treadmill, because it will definitely be an exciting run.
Handling a downturn has little to do with what you do when the downturn starts, but more to do with how you built during the boom. At the start of a downturn, if you’re asking “What do I do now?” it’s probably too late.
Sandeep Murthy talks to Abha Bakaya on Bloomberg TV about building sustainable businesses that can weather inevitable downturns in the economy. By optimising business operations and putting frugality at the heart of the company, a startup can accelerate faster during up-cycles.
The nature of the game and the implied rules of determining value for disruptive companies are very different than the game being played by traditional companies.
In this investment we are doing our small part in affecting the consumption patterns of our society. Harvard University sociobiologist Edward O. Wilson claims the earth can support 10 billion people – a number others predict may be hit by 2100.
As technology investors, we strive to find ways to use technology to make an impact in people’s lives. What better way than with everyday food?
Taylor Swift demonstrates that while Spotify has 40MM users, she has a direct connection with 46.3M followers, known as the Taylor Nation. As a brand, her direct connection with people is so strong that she controls the balance of power in the distribution chain. This is a very strong statement and a real truth that all distribution businesses will quickly need to come to terms with.
Tech companies are nothing without growth. The real value creation will take place in companies that are able to demonstrate differentiated growth by taking advantage of the imminent technology boom (a result of the explosion in data & apps).
Those that make it through are not unscathed – they have battle wounds. The challenges of the first year take their toll… emotionally, organizationally, culturally. While the first year has likely felt like a sprint, it is important to remember that this is a marathon and it is impossible to continue to run a marathon at a sprint pace.
It’s really hard, but so powerful. The "hack" culture of Facebook or the "do no evil" approach of Google or the "respect everyone" culture of the Mahindras. It is amazing to see what great things can be accomplished when a founder drives core values effectively through an organization.
Failure is one of those things that is inevitable when you stick yourself out there… especially when you are young.
Like many good stories, it all started over a beer after a game of Rugby.
Hitendra and I discovered this opportunity through an iterative set of conversations that took place prior to funding the business. It was this deep engagement and exchange of ideas, even before there was an economic incentive that allowed for a strong relationship with an open exchange of ideas to develop.
We’re Calling it Operating Venture (till we think of something better)
The Indian ecosystem lacks market consolidators. But that could change imminently.
Yes Bank interviews Sandeep Murthy about how the Indian entrepreneural system is evolving and what founders should be thinking about.
It’s not the size of the Indian market but the immensity of the aspiration across income levels that businesses need to take into account. Products that deliver aspiration at value bargains is where the game gets exciting.
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