Cafe Coffee Day founder VG Siddhartha, who was missing since 6 pm on July 29, said he ‘failed as an entrepreneur’ in a letter to board and employees.

 “I sincerely request each of you to be strong and to continue running these businesses with a new management,” Siddhartha said in a letter dated July 27.

Siddartha said he was under ‘tremendous pressure’ from private equity partners to buyback their shares, a transaction he had partially undertaken after borrowing money from a friend.

59-year-old Siddhartha, son-in-law of BJP leader and former External Affairs Minister S M Krishna, was cremated in a sombre atmosphere after hundreds of people paid a tearful homage to the ‘Coffee King” at his Chetanahali estate in his ancestral village in Chikkamagaluru where hundreds of people gathered to pay their last respects.

Siddhartha, whose chain of cafes helped make coffee a lifestyle beverage, is survived by his wife Malavika and two sons,Amartya and Ishaan.

A police official said “everything” points to suicide, but nothing can be ruled out until the investigation is over.

Siddhartha’s body was found by local fishermen and patrolling policemen, two days after he went missing under mysterious circumstances.

His body was identified by his friends, said Dakshina Kannada district Deputy Commissioner Sasikanth Senthil.

After the post-mortem at Wenlock Hospital in Mangaluru, the body was taken to Chikkamagaluru.

Amartya lit the funeral pyre after the last rites were performed according to the traditions of the Vokkaliga community from which Siddhartha hailed.

The atmosphere turned sombre as Amartya lit the pyre. The youth broke down several times while performing the rituals. Krishna, 87 and his wife Prema too fought hard to control their emotions.

A large number of people from within the coffee estate and neighbouring villages, whom Siddhartha had helped come up in life, thronged to pay their homage.

Before Chethanahalli, the body was kept at Chikkamagaluru for people to pay their last respects.

Karnataka Chief Minister B S Yediyurappa, his predecessor H D Kumaraswamy and several political leaders attended the funeral.

The remains of Siddhartha was traced after 36 hours of an intensive search operation with a letter allegedly written by him to the Board of Directors and employees of his company Coffee Day Enterprises, showing he was struggling with financial problems due to debt, taxes and share buy backs.

The search involved multiple agencies, which scoured the waters under a bridge across Nethravathi, where Siddhartha, the founder of India’s largest coffee chain Cafe Coffee Day, was reportedly last seen on Monday night, officials said.

Borrowing Rs five lakh from his father to pursue his dreams, Siddhartha, known for being shy and self-effacing, went on to become “coffee king”, creating jobs for thousands of youth instead of joining the family business.

The family owned over 350 acres of coffee estate and had been in the business for over 140 years.

A senior police official told PTI, “Investigation is going on. Prima facie every thing points out to that (suicide) only. But we still we can’t rule out anything. We will have to finish the investigation”.

“We have found the body….. I have no words to comfort the family,” Yediyurappa said in Bengaluru.

“He had more assets than liabilities,” Yediyurappa added.

Senthil said the body was spotted by local fishermen and police, who had been patrolling the banks of the river.

The authorities predicted the probable location where the body could be traced using a “model” developed by Hyderabad based Indian National Centre for Ocean Information Services (INCOIS), which makes predictions based on current, low and high tide among other parameters, he said.

A political war also broke out over Siddhartha’s allegation of harassment by the Income Tax Department, as the Congress accused Prime Minister Narendra Modi of betraying the people who voted for an independent and hassle-free economy.

“There is an old notion of government has no business in business and Modi in his pre 2014 election campaign made a big deal about it. Today he has absolutely betrayed the people who voted for him to see a robust, independent, hassle free economy,” Congress leader Abhishek Singhvi said on Twitter.

Congress leader Shashi Tharoor said Siddhartha’s death reflected a “worrying trend”.

“Ease of Doing Business” under BJP translates into “Ease of Ending Business”. The #VGSiddhartha tragedy reflects the worst of a broader, deeply worrying trend,” he tweeted.

Reacting to Siddhartha’s death, the Karnataka Congress said on Twitter, “Result of harassment by IT officials and decline of India’s entrepreneurial position turning virulent by the day, with Tax Terror & collapse of economy.” 

Former Karnataka Chief Minister and senior Congress leader Siddaramaiah said Siddhartha’s death is both “disturbing and mysterious”.

“The reasons and the invisible hands that ended his life in this tragic way should be unearthed through impartial & fair investigation”, Siddaramaiah said, referring to a letter purportedly written by Siddhartha, where he alleged harassment by the Income Tax department.

He said the letter supposed to have been written by Siddhartha discussed “tax terrorism”, which is the “ugly face of politically motivated institutions”.

In his letter, allegedly written to the Board of Directors and employees of Coffee Day Enterprises, Siddhartha complained of “a lot of harassment” from the previous DG Income Tax.

The IT department refuted the charges and said it had acted according to the provisions of the Income Tax Act.

Siddhartha went missing on Monday night near Ullal bridge on Nethravathi river.

The businessman left Bengaluru for Sakleshpur in Hassan district in an SUV on Monday afternoon. On the way, he asked his driver to go towards Mangaluru, police said.

He got off the vehicle and told his driver to wait for him at the end of the bridge, saying he was going for a walk.

On Tuesday, a fisherman claimed he saw someone jumping off the bridge.

The letter purportedly written by Siddhartha, whose authenticity could not be independently verified, also showed he was under “tremendous pressure” from lenders.

“I have failed as an entrepreneur,” he said in the alleged letter. Coffee Day Enterprises on Wednesday named independent director S V Ranganath as the interim chairman of the company to replace Siddhartha.

The company board, wherein Siddhartha’s wife Malavika Hegde is also a director, met on Wednesday to put in place a working structure of the company.

The board appointed “S V Ranganath as the interim chairman of the board” and “Nitin Bagmane as an interim chief operating officer (COO) of the company,” Coffee Day Enterprises, which runs India’s biggest coffee chain CCD, said in a regulatory filing.

It also constituted an executive committee comprising Ranganath, COO Nitin Bagmane and CFO R Ram Mohan “to exercise the powers previously vested with the Chief Executive Officer of the company and the Administrative Committee constituted by the Board in 2015.

Courtesy: PTI, Image Source: 1

A start-up entrepreneur comes up with a bright idea, seeks and gets funding but now has to ensure its sustainability and success by assembling the right kind of team members able to take care of various aspects of the business. Top Business Schools are coming up with incubators and other programmes to help them as well as provide valuable lessons in various aspects of the business to their students.

In India, the focus on start ups as a sector fostering entrepreneurship and employment generation, saw investments touch $ 5 billion in 2015, according to the NASSCOM Start-up Ecosystem Report. Three or four start-ups were being set up almost on a daily basis. As many as 6000 such businesses have come up and the numbers were going up.

Hyderabad-based Indian School of Business (ISB), that came up with the ‘Startup First’ initiative in 2013 “to strengthen the entrepreneurial ecosystem by connecting top talent with promising start-up ventures”, proposes to have ‘enterprise study machines’ that take up research and innovation on different areas.

ISB Dean Rajendra Srivastava recently told Business Line that while success of a good idea depends on a balanced team, among others, the School could tell them how to assemble the resources by providing tacit learning.

Apart from ISB, IIM Ahmedabad, IIM Bangalore, IIM Calcutta are some of the other B-Schools in India that provide advanced training and even access to funding for ideas that meet a prescribed criteria through incubation facilities.

Meanwhile, those MBA graduates intending to join Start-ups would do well to make sure that they are the ‘right fit’ candidates in attitude, experience and salary expectations. For those who expect to be given key positions along with staff members to take care of all the minor details, it would be quite a big let down. Start-ups, being in their infancy, would be sparsely staffed and almost everybody would have to perform pretty much all the functions.

Similarly, you may have worked in several of the top companies but the experience may not count for much in a Start-up. In such firms, more tasks would have to be performed with quarter of the resources available in a big company.

Thus, the candidates would have to convince the managers that they could comfortably fit into small teams and work to tight deadlines and high stakes. Your past record of finishing tough assignments on schedule or any such professional achievement could be highlighted. Domain knowledge or willingness to learn and adapt would also be essential.

Another factor would be salaries. It would be unrealistic to expect a pay that would enable you to repay student loans or money spent on MBA in a short time.

For those who intend to join a Start-up at the end of the MBA program, could gain valuable experience by opting for such a firm during summer internships in case of a 2-year program or for those about to complete the one-year course, spare a few hours in a week for such voluntary work at the Business School incubator.

Being an education or edtech start-up is not easy. It is not easy in India, and it is not easy anywhere else in the world. A good way of explaining the same to you will be the fact that even after having a $100 million+ funding, edtech start-ups such as Knewton, Coursera, Udemy, Duolingo are still ‘figuring many things’ out. They are well known and are doing cutting edge work but are far away from a time where they can see to recover the money they are spending or become profitable.

Back in India, edtech start-ups have seen some form of success in only few segments that include Test Prep, Professional Courses & LMS. Barring this, majority of segments such as Pre-school, K-10 & Higher-Ed are yet to see decent success stories.

Multiple factors are responsible for the low success rate of Edtech start-ups. I am sharing a few here that I have observed as well as faced over the years that has threatened our existence our existence but we always came out on top.

1) Lack of understanding of education market

Education is a very unique market and probably there are few industries that are as diverse and spread-out as education.

Say, you are selling B2B to schools (K-12). This means that your POC (point of contact) is the school administration; your consumers are school students; your buyer is the school trust / board; and your customers are parents whose kids are studying in that school. Barring the actual consumer, everybody else decides things on whims and fancies and your sales are dependent on each one of them being onboard to buying your product / service.

In the B2C market in K-12, you are (in most cases) competing with a tonne of other products & services that are providing exactly same (or somewhat similar) features as you are. Yet, everyday a new start-up crops up in this space providing the same features & no differentiation from the existing lot. Even if the features change, there is no noticeable difference in the value proposition. To add on top of this, there is always someone providing the same for FREE and just takes away any leverage you can build in the market.

2) Expectations of hyper growth right from the start — lack of patience

Education is no e-commerce, or taxi business, or hyper-local business. Start-up in education only if you are in for the long haul i.e. atleast 15–20 years. In most other types of businesses, hyper growth is one of the possible ways of growing. In education, no one has seen hyper growth. You may come and argue that Khan Academy has X million users or Duolingo has Y million users. Well, I agree they have users. But are they paying? Khan Academy is not-for profit so it is in its own league. Duolingo has still to figure out how to make money. It takes time in education to get your model right, to get your pricing right and to get your strategies right. You cannot just randomly say you will reach out to X million in 5 years. You might infact take 5 years to get your product-market fit right. Patience is a powerful friend of a smart edtech entrepreneur. Your initial focus should be to survive as long as you can, doing as varied things as possible so that you can quickly know what works for you and what doesn’t. Don’t take VC money before you get your product right. That is a sure-shot way of failing. Be patient — the longer you survive, the higher is your chance of success.

3) Not figuring out the Right Model / Revenue Channels

This is an extension of what I wrote in the previous point. You should know the behavior of each of your stakeholders inside out and play those to your advantage. Parents like quality but cheap products, educational institutes like unique product that they can take from you at a price point of x and sell at 5x or 10x. Can you do any one of these without losing money? Ask this question to yourself everyday. Education is not a quality problem for the customer, it is a pricing problem (barring test prep). If parents get option to choose from two online learning platforms, they are not going to choose the cheaper one since they are high inexperienced and incapable of differentiating between the two products (which is aided by the fact that the two platforms are actually not very different from each other).

The graver sin after this is to raise institutional capital before having figured out the right model. VCs mostly have an 8–10 year period to return money to their LPs. In no way, can an upcoming education start-up figure things out and start growing crazily in that little time. They will push you to do things that don’t make sense and will only end in more pain for you. If you need to raise, raise from angels who get what you are doing and are equally passionate about the problem you are about to solve.

4) Wrong interpretation of early traction

Most edtech start-ups that show decent initial traction believe that this is how their growth curve is going to be. Being as optimistic as possible, they start using these initial traction numbers to draw exponential growth curves and sometimes, in an effort to be realistic they simply draw linear curves. They cannot be more wrong to do so. Every edtech product’s initial customers are the best types of customers to have, they are willing to try what you provide and try even giving you the right feedback. It is good to use these sets of people as your evangelists but not more. The next set of customers are crucial who are skeptic but have just enough faith to give you a shot. Now, this is your make or break shot. If you convince this particular bunch, you will find your mojo that will help you scale. You also need to also be ready to take all the criticism / feedback this bunch will have since it will only help you refine your business model.

5) More users vs More paying customers

This is a serious problem for most edtech startups showing good initial traction. There are many who never even reach a point where they can say they have 10,000 users or 15,000 users. So, this point is not valid for them. Every ed-tech startup touches a peak number after which the growth starts plateauing and you are in search of getting more people. When doing that, you start discounting using VC money. Bad move, don’t do it. Figure out more innovative ways of reaching out, but don’t give stuff for free just to acquire more users. Users are not going to keep you afloat, paying customers are. You are not a wallet that you will have 20 million people on your platform and you will start leveraging the fact that you have data. Very, very few ed-tech startups even see the face of 2 million users, let aone 20. You cannot leverage data. You can build a sustainable business model to survive giving your customer a value proposition that makes him / her look better, smart or whatever that keeps him / her happy.

What to do?

It is very true that what does not kill you only makes you stronger. Being an ed-tech start-up means you must always be nimble, frugal and tip-toeing your way in the academic space. Find your niche, stick to it and build a quasi moat if it is too hard to build a real one. Knewton is a great example of a company that has built a quasi moat and whenever you think ‘Adaptive Learning’, you think Knewton when infact they were far from being one of the first players in the segment. Don’t raise too much money too quickly, take your time. Survive. Survival is key. Too much money too easy will just brutally kill you. Be in the sector for a long haul and for the right reasons, you will surely see success. It is the most brutal market but it is also one without too many success stories and opportunities are always up for grabs for those who know the dos and don’t’s of edtech.

Who am I?

I run an Edtech startup called GyanLab.com which has been working since 2011 in the K-12 space to build exciting products that make learning more engaging & fun for students. Our current efforts are focused on building an adaptive learningplatform for K-10 students that personalizes learning to makes it more fun & engaging.

(Disclaimer: This is only my point of view from my experience being in edtech for 5 years, you may or may not agree with what I have written)

Launched a year ago, www.kitchensfood.com is a successful tech platform for all those who want to buy or sell home-cooked food.

The founder of the website is a former combat pilot in the Indian Navy and alumnus of the Indian School of Business (ISB), Rishi Raj Singh. 

The 42-year-old launched the service in Hyderabad and later in Bengaluru and is soon planning to go international. He credits the portal’s ever increasing traffic to their reliable, transparent and fast service as well as assured hygiene and safety.

Speaking to the Hindu, Singh said, “It takes six weeks for a home chef to register and sell their dish through us. The interested person should first take a licence from the Food Safety and Standards Authority of India. After which, our internal team will visit the kitchen to check for hygiene and safety standards. If the team is convinced then the home chef can start selling their product with a rate decided by them but quantity finalised by us. But, we never judge the food and let the customers do it.” 

Presently, there are 800 registered home chefs in Hyderabad and Bengaluru and the company receives an average of around 200 orders on a daily basis. The company, which maintains a sizeable logistics staff, promises delivery of the food item within an hour.

According to Singh, their services work very well for all those who want to try unique or rare cuisines from every nook and corner of the country which are hard to find in the restaurants but prepared at home. (Source – The Hindu)