Money Will Find You!

What is the best way to get funded? This was an important question that Nandini Hirianniah (my
co-founder at Madhouse) and I were trying to answer around the beginning of 2005. Madhouse
Media (our first startup) was an organized movie rental venture-envisioned to be Netflix of India.
Netflix then was a super host startup in the U.S. The following were our thoughts on funding at
that time.

Both of us had returned to India from Silicon Valley. I had worked for five years with a coupe of
valley startup, both of which had raised $50 million plus in funding. Nandini had seven eight
year of media experience with many media giants and a few funded media startups. We had the
relevant experience to spearhead Madhouse-Nandini in media and communications and I in
technology.

We had quite out our well playing jobs, withdrawn our PFs and burnt our bridges; we took the
‘right’ path and prepared an exhaustive B-plan; according to the B-plan, we needed Rs.1 crore to
launch the business which would break-even in two years and became a Rs. 50 crore- 100 crore
business in about seven yearswith subsequent round of funding!

It all looked good and we hit the road to raise our 1 crore. The initial step was to find contact
who could connect us to potential investors to pitch for funding. It wasn’t easy task, but we were
confident. We started getting initial meeting in Mumbai/Delhi through our network and more
contacts through people who pitched to. An initial meeting was never a problem. People spent
Two hours with us, they seemed to like the idea, asked a lot of questions which we almost
always managed to answer; all seemed to go well. But often they would go silent post of the first
meeting and, in some cases, after a couple of interactions. Follow-ups resulted in them saying
“we’d like to pass on this opportunity”.

We were at it for two months, busy pitching, getting feedback, tweaking the B-plan, following
up, but no one wanted to fund us. Now the question was, what next? Should we continue looking
for money? Should we get back to our jobs? That’s when we had our moment of reckoning!
While discussing what to do next in our mentor’s office in Mumbai (head of larger retail chain),
Nandini and I had an informative conversation with our mentors who had been really supportive
and had given us access to some of his contacts to pitch to. (the following is an account of the
conversation, not the actual one.)

Mentor: Looks like you guys are not going to be able raise money. But are you still passionate
about the business?

Us: yes, of course.

Mentor: How much money can you invest?

Us: if we had to, we can manage around Rs 8 lacks, 4 lacks of our saving and 2 lacks each from
our respective parents.

Mentor: In last case, my advice is, go back to Chandigarh and launch a pilot of your service
using this money, if you do a good job, money will find you.

After that we stopped all efforts to raising money, went back to Chandigarh, trashed the Rs.1
crore B-plan and created a new, simpler pilot Execution Plan. This new plan had just one goal:
our monthly revenues should be more than our monthly expenses, before the 8 lack got over!

Ig we achieved this Madhouse would be “customer-funded company.” We were back in

chandigarh at the end of the February 2005 and launched our service that May. We had some
good initial customer traction. By August, we had a couple of angel investors interested in
investing around 25 lakh in Madhouse.

We did not go looking this time, but they found us! How? Execution is better than business plan.
One of the angel investors had heard about Madhouse and the founded team’s passion through a
Madhouse employee. The angel called me and what started off as a casual call turned into long
discussions over many calls. But the initial calls were never about funding.

After some days, he just asked, “So how are you guys funding your business?” I said. “We had
invested our personal money and have borrowed some from our parents. We are confident that
we can make our business profitable.” He said, “I’ll be interested in investing. I can check with
my IIT friends if they want to invest. I can help out part time and connect you to folks in my IIT
networks.” About a couple of months after that conversation, we raised Rs. 25 lakh from two
angels.

Finally, we had found that answer to our questions. The best way to get funded is figure out: how
much capital can you raise on your own to get started. Get all your saving, your provident fund,
all the money that can you get by selling your liquid assets, you credit cards, etc. also check how
much money you can raise from your close friends and family without giving them too much
trouble.
 Digital Hungama
Digital has completely changed the game for entertainment and marketing across the world.
Many would not have thought about the possibilities some 10 years ago, but today the media
industry has seen a paradigm shift in the way we consume entertainment. With mobile phones
outnumbering toothbrush across the world, the little handset will soon become the key to all our
entertainment needs

One vision I saw rather clearly in the late 90s was the digital resolution. Somewhere in the mid-
1998, I had the opportunity to attend the internet world exhibition. Coming back excited with the
possibilities offered in the digital world, I bought a book on e-commerce from Amazon.com back
them, my only interaction on the internet on e-mail account on Hotmail. The internet was
completely new platform for me, but I simply amazed by the potential the medium had to offer.
This passion was so strong that on All Fool’s Day, April 1999, I started hungama with some of
my friends Ashish, Rakesh, Lashit, Ashwin and Hiren. Who had just passionate about the digital
world as I was. The website became a conduit for brand and their consumers, as we decided
early on that banner ads would be enough. Brand needed to engage the consumer and not merely
be a static advertisement.

While many say that Hungama rode the dot-com wave during the time, with 155 clients on the
website within a year, the initial euphoria was short out, with 2001 bringing on the dot-com bust.
This is when we started the promo marketing business and offered clients integrated services
with on ground activation, bringing a synergy between the online and offline experience. During
what I call the ‘ostrich years’ we had our heads buried firmly in the ground and did everything to
sustain the business. However, the turning point for my resilient team came in 2004, when the
company took to uncharted waters with hungama mobile. We were one of the last digital
companies to enter the mobile industry, but created many milestones early on. Within the first
year, hungama has strategic partnership with all the leading music labels and entertainment
studios licensing the digital rights for over 70 percent of the India’s entertainment content.

Soon the company was working with all the leading mobile service providers and the leading
handset manufactures around the world, taking quality mobile entertainment company from India
to an international company. We control about 85 percent of all digital entertainment in India,
touching consumers in over 42 countries through 147 partners, including iTunes, Amazon.com,
Daily Motion, FTV, Vodafone, 3Mobile, Telenor, Sinngtel and Verizon to name a few. We have
planned and executed over 2000 digital campaigns for diverse brands like coca cola, Dove,
General Milk, Bajaj Auto, Mitsubishi, making hangama digital one of the largest digital agencies
in the country. Today Hungama.com has becomes India’s premium cross platform digital
entertainment storefront that allows consumers to access content anytime, anywhere, through
their mobile or PC.
But this is not enough! As India prepares to get its rightful place in the global economy, Indian
entertainment, driven by Bollywood, is already making its mark. I believe that with hungama,
digital entertainment has many milestones to cross. I believe my team has the potential to create
breakthrough solutions for the entertainment and marketing industry.
 South Side Story
In 1993, I traveled from my hometown, a village not too far from Tirychy in Tamil Nadu and
landed in Chennai with a dream of venturing into business and becoming a successful man.
Initially, I focused on the infrastructure business and undertook few projects in and outside
Chennai while hunting for a good rented residential accomodation to stay in the metro. The
search for the subsequent difficulty faced in finding it motivated me to shift my lane of business
from infrastructure to real state in the year 1997.

I picked up two grounds (4800 sq. feet) in south Chennai, the ideal location for a residential
apartment. I was able to find some customers who trusted us during our first venture besides
which the location of the land provided to be an added advantage. This enabled me to sale my
first apartment in Chennai an\d make my “first million rupees” from real estate. Excited with the
first scale of property and inspired by the trust and motivation placed in my business acumen by
initial buyers, I moved on, undertaking several small sized developments in various parts of the
city.

The urge to deliver quality projects and undertake a large real estate development continue to
inspire me and that was when my real estate company decided to consolidate a large parcel to lan
within the city limit in 2002. It was a challenge and involves a big risk but I decided to take it up.
It was though situation for a developer, thinking large and creating the largest and tallest
residential building with in the central business district of Chennai. Today the development of
Lumbini square with over the dwelling units has been completed in phases and over to our
customers. It was a proud moment for us in true value homes and for the all apartment owners.
Without this project we benchmark as a premium developer who could delivers highest standards
of quality in residential building. Similarly, another success of true value was creating the first
ever gated community in Chennai called Park Ville. We received a lot of criticism for our
approach but customers were forth coming and project was sold out.

Today, we are constructing the tallest building (over 300 feets) on the old Mahabalipuram road
in Chennai called Ouranyana Bay, Which will house to at the tree bedroom apartment and which
will face both the blue sea and the city. It will be equipped with a premium leisure center on the
lines of a five star club with a large swimming pool, restaurant and a 75 –seater movie theatre.
We have also extended our development to Coimbatore and Trichy. Slowly and steadily, we
have scaled up from a single apartment to 4 million sq. feet and have 12 million sq. feet
residential and commercial development in the pipeline; its completion of which will be the most
cherished of which will be the most cherished moment of my professional life till the date. Risk
and high return go hand in hand. While we are working towards delivering 12 million sq. feet,
my dream venture is to create the most sophisticated and exclusive residences for the super rich
of our society.