The Tandon Group strongly believes that social innovation is just as important as technical innovation and has a long history of taking the lead in social responsibility on a range of issues. By developing and applying new ideas about what social values we have and should have, Tandon has not only become a leader in India economically but also politically, using its influence to encourage the country’s growth to the best benefit of all its citizens.
From 1984 to 2000, the Tandon Group became the largest employer of women in the tech sector. Not only did this pave the way for other tech companies to start employing more women, but social innovation led to technical innovations and economic advantage for both India and Tandon.
By employing more women, Tandon gained access to a previously untapped source of potential and expertise and this move helped fuel India’s growth into one of the top tech producing companies in the world. Additionally, through positively influencing the Indian Supreme Court, Tandon helped gain women in the technology industry the right to work at night, increasing women’s freedom in the workplace and indirectly improving their living conditions as a whole.
Tandon also used its political influence to help encourage the creation of “tax-free zones” throughout India. These have proved to have had an incredible impact on the growth rate of the Indian economy, increasing production and foreign investment and ultimately driving India into the top ten of the world’s biggest economies.
Time and again, social innovation has proven to be not just the right thing to do, but a key indicator of economic success; by innovating socially as well as technically, the Tandon Group continues to find success and make a difference in a variety of impactful fields. Looking at a problem with innovation and tenacity, both economically and socially, has been a key driver behind Tandon’s past and present successes and continues to push them towards ever greater growth and influence.
Tandon GroupUnprecedented Work Opportunities for Women in India
This question has been asked in every major business on the planet. From concrete manufacturing companies in the 1950s to PayPal in the 1990s, and now the Facebook and Uber empires of today. They created a great product, have started to gain traction, recently got funding, and now they must ask, does the company focus on growth, or profitability? A point needs to be made from the outset: It’s mathematically impossible to maximize growth and profitability at exactly the same time. You’re either doing one or the other, and often it’s these decisions which will ultimately determine the success of your company.
Questions to Consider
First ask this question: “When should my company start worrying about making money?” This isn’t simple to answer because there are many subtle distinctions which need to be made for a right answer to appear. Are you a business-to-business (B2B) company? What is the economy like? Are you a first mover? Have you already achieved funding and is it easy to get additional funding? What are your personal goals with this business- are you trying to run a global company or a niche money-making side business?
Based on the above, if your company is business to consumer (B2C) than it’s smart to focus purely on growth. Reason being is the consumer behaviour is notoriously fickle while corporate behavior is relatively static. This means a B2C company needs to pour money into advertising spending while locking down their user base. Let’s look at Facebook as a case study.
When Facebook initially started they didn’t have a clear revenue model but the executives did know they had something groundbreaking on their hands. They reasoned it was critical to gain the user’s first, in massive spending sprees for growth, and would figure out the revenue model second. Thus, the Facebook advertising platform was born, and out of it a multi-billion dollar revenue stream.
Money for Growth
Let’s look at this problem from a different angle. We already asked if there was easy access to capital, either in the form of private equity or venture capital. Now, let’s assume you decide to pursue an investment from a private equity fund. If you do this they’ll most likely lay down the business with debt in long or short-term loans. Now, if you’re a tech company it’s not smart to go down this route, because tech companies generally need to focus on user growth. However, if you’re company is building a physical product, then going through a private equity firm might make sense.
Rules of Thumb
If you’re a technology company that requires user interaction for viability, than obtaining users should be your primary goal because the greater volume of users you have, the greater amount of time people will spend using your product. Thus, it’s in your interest to focus on rapid growth from the outset with plans to weather unprofitability. Eventually you’ll have to monetize but it can be unwise if done too soon or before critical mass adoption.
Second, if your company is developing physical products which are capital intensive and growth is achievable, but at a slower rate than profitability will be your best option. Reason being is that your company’s main goal will be reducing costs of production for goods sold, which inevitably leads to greater margins. Your massive growth will come from an initial public offering (IPO) which infuses the company with liquid capital which can then be used for greater growth down the line.
If you’re a startup looking for resources to help you succeed, Tandon Group has provided numerous startups with business advice and funding support for over four decades.
To learn more about our company, please contact us.
Tandon GroupShould Startups Focus on Growth or Profitability?
USC Viterbi alumnus Sandeep Tandon has become one of India’s most successful high-tech businessmen by challenging the status quo
For more than two decades,Sandeep Tandon, B.S. EE ’90, M.S. EE ’91, has immersed himself in the world of technology. His creativity, innovation and willingness to challenge the old order have placed him among India’s most successful investors, executives and business owners.
“I love questioning why something is happening a certain way, then pushing the limits of trying to do it another, possibly better way,” said Tandon, managing director of the Tandon Group, a technology catalyst that provides financial and managerial assistance to 28 startups, mostly in India. “I get lit up from learning.”
Judging by his myriad business triumphs, Tandon has learned how to thrive in India’s cutthroat, high-tech world. One of his most recent successes, the multimillion-dollar sale of digital-wallet firm FreeCharge, reflects Tandon’s keen eye for profitable disruption opportunities.
FreeCharge, which he and Tandon Group manager Kunal Shah co-founded in 2010, became India’s fastest-growing mobile payment app. Tandon raised the company’s initial funding, built relationships with banks and telecommunications companies to build out the payment platform, and recruited key executives. FreeCharge makes it possible for millions of mostly young people to recharge metro cards, pay utility bills and make other mobile payments to service providers throughout India.
At a time when India remained largely a cash-based society, Tandon and Shah saw the upward trend in mobile phone ownership as an opening for a digital payments company. The pair launched FreeCharge, enticing millions of new users with digital coupons and incentives.
Their bet paid off handsomely. Tandon and Shah sold FreeCharge in 2015 to Snapdeal, an Indian online marketplace, for $400 million. The Times of India called it “one of the largest deals in the consumer Internet space in India.”
“FreeCharge revolutionized and accelerated the digital payments ecosystem in India,” Tandon said. “The Tandon Group will continue to focus on finding game-changing platforms that serve the huge base of mobile internet users in India.”
Under Tandon’s leadership, the group provided seed funding for Pianta, which offered a mobile appointment-booking platform for home health care services and was acquired by Indonesia-based Go-Jek last year for an undisclosed amount. Infinx, another promising medical startup funded by the Tandon Group, oversees billing and computer coding operations to help health care providers focus on patient care.
“I love the process of starting companies because it’s so liberating,” said Tandon, who has founded or co-founded six startups. “While you might have limited resources, there are no limits to your dreams.”
Tandon began his career in the United States but returned to his native India in 2003 to join the family business. His father, Manohar Lal Tandon, founded Tandon Magnetics in India in 1979 to manufacture for his brother’s U.S. based company, Tandon Computers. Under their direction, the partnership became the world’s largest independent producer of floppy drives for personal computers and word processors. Tandon Magnetics morphed into Tandon Group as the business expanded. In the early 2000s, the company shifted its focus to invest mostly in Indian startups in IT, medical services, e-commerce and financial services. Sandeep’s brothers, Jaideep Tandon, B.S. EE ’94, and Sudeep Tandon, B.S. CECS ’04, M.S. EE ’06, serve as Tandon Group directors.
“It’s a family affair,” Sandeep Tandon quipped.
A proud Trojan, Tandon said studying engineering at USC “gave structure to my thoughts” and taught him how to break complex problems into small pieces to solve them.
“USC, it holds a very special place for me,” he said. “The TAs, professors and students were all there to help you.”
Now Tandon is there to help USC. For the past five years, he has served on the USC Viterbi India Board and hosted several alumni events at his family’s home in Mumbai.
“Sandeep has been one of the most important pillars of our expanding network in India,” said Dean Yannis C. Yortsos. “The Tandons are the quintessential Viterbi and Trojan family.”
Conferences are one of the best ways to network and conduct business development in any industry. Tandon Group has been attending conferences for the better part of 40 years. Many of the connections and business opportunities that turned us into the company we are today were created at industry conferences.
As a way to give back, Tandon Group is sponsoring the 2017 USC Global Conference. We are sponsoring because our directors, Sandeep, Jaideep, and Sudeep Tandon, all attended USC’s Viterbi School of Engineering. USC has been a leader in tech innovation for decades and has produced some of the best engineers in the world. Here’s all the information you need to know about the conference:
Who’s gonna be there?
Previous years conferences have had over 700 attendees from every industry imaginable. USC’s Global conference attracts so many world-class businesses, technology, education, and finance leaders because of its rich history as a world-renowned University.
This year’s conference will have many distinguished speakers including:
Kazuo (Kaz) Hirai- CEO of Sony Corporation
L. Max Nikias- President of the University of Southern California
David H. Petraeus (Retired General), Chairman of the KKR Global Institute and venture capitalist
At this year’s conference, you’ll be able to see special keynote speakers, watch multiple sit-down interviews, attend lunches, dinners, and numerous networking opportunities. There are very few places where you get so many like-minded individuals in a room together. This is an opportunity for people from every sector to get together and uncover new opportunities to expand and grow.
You can see the full schedule by visiting the schedule of events here.
Where’s the conference?
At the Grand Hyatt Tokyo located in the Roppongi district.
As we said at the beginning of this blog post, conferences are one of the best places to grow your business and expand your network. This year’s USC conference will be one of the largest in history. You don’t want to miss out on an opportunity that could transform your business forever. If you’ve ever wanted to mingle with high-level executives and decision-makers, this is the place to be.
While you’ll still have to exercise your networking muscle, putting yourself in a position to grow is the only way you’ll meet valuable these connections. Even after factoring in conference tickets, airfare, and hotel accommodations, one valuable connection could produce an ROI far in excess of what you spend to attend.
Aside from business networking opportunities and the conference itself, you get to explore the Tokyo metropolis landscape. Tokyo is the largest city in the world with over 33 million people. For many people, this is a once-in-a-lifetime opportunity to explore a city you rarely get to visit.
How to sign up!
If you’d like to attend, you can sign up for the event by going to the USC Global conference website and registering here. We hope to see you there!
The slowdown in startup funding is showing no signs of a let-up with early-stage and angel deals, a barometer of investor enthusiasm, nosediving in the first half of calendar year 2017.
Tandon GroupMeet India’s busiest angel investors of the first half of 2017
It’s easy to see how quickly app-based rideshare services revolutionized urban transit in the United States. FreeCharge has taken that model a step further, bringing innovative mobile services to India’s most popular form of low-cost local transportation: motorized rickshaw taxis.
As low-cost smartphones have come to dominate the Indian market, FreeCharge has been a pioneer in the deployment of mobile e-commerce applications in a national economy where 98% of consumer transactions have traditionally been cash-based. Originally a Tandon Group portfolio startup before being acquired by Snapdeal in 2015, FreeCharge currently serves an estimated 80% of India’s $119 billion domestic e-commerce market. These consumers increasingly rely upon FreeCharge for convenient mobile bill-paying and for other day-to-day expenses.
After FreeCharge’s initial success, the next challenge became clear: How can this modern innovation extend deeper into the Indian economy, such as the simple point-to-point services performed by rickshaw drivers?
FreeCharge’s solution was to adapt Chat-N-Pay to collect rickshaw fares. From an intuitive mobile app, customers can easily complete online payments in as little as five seconds, ensuring speedy service while eliminating fumbling with cash payments and change.
The initial pilot program in India equipped 15,000 “e-rickshaws” in Delhi, Mumbai, and Bengaluru with the Chat-N-Pay mobile app. FreeCharge provided each driver with comprehensive training, helped them register for the service as independent merchants, and assisted each in setting-up a digital wallet or other electronic accounts to collect payments.
Today, FreeCharge is on target to register 100,000 drivers by the end of 2016. The emerging benefits of Chat-N-Pay have already generated significant buzz among Indian media, drawing the attention of Prime Minister Shri Narendra Modi, who attended a personal demonstration by Sudeep Tandon, FreeCharge Chief Business Officer, in Noida this past April.
Later quoted by The Economic Times in July, Tandon outlined the company’s e-rickshaw business plan: “We aim to get 100,000 taxis in the country to go cashless by the end of 2016 by offering a frictionless payment process and help them be part of the digital payments ecosystem.”
This landmark Chat-N-Pay innovation has brought welcomed convenience to both the rickshaw drivers and their passengers while representing a major milestone toward extending the full benefits of the “digital revolution” deeper into India’s diverse service economy. Read more about this Tandon Group success story at www.freecharge.in.
Tandon GroupFreeCharge Chat-N-Pay Brings Digital Convenience to India’s Most Basic Transportation
In April 2015, online marketplace, Snapdeal, bought Tandon Group portfolio company, mobile recharge app FreeCharge, further strengthening its position as a long term power player in the consumer internet space in India. FreeCharge is Snapdeal’s biggest acquisition to date and projects to add a substantial volume of transactions occurring through its platform by the end of the fiscal year.
Incubated by Tandon Group
Encouraging entrepreneurship amongst its employees, and mentoring talent for the future is Tandon Group’s passion and in the case of FreeCharge, the Tandon team nurtured the idea since inception. FreeCharge co-founder, Kunal Shah, was running Tandon Group’s business process outsourcing company in Mumbai and he became fascinated with customer behavior after reading a book given to him by U.S. based director Jaideep Tandon – The Psychology of Persuasion by Robert Cialdini.
Kunal then approached the head of Tandon Group, Sandeep Tandon, with an innovative idea built around customer loyalty – a rebate program for the Indian consumer called PaisaBack. It was designed to drive foot traffic to the growing organized retail segment in India. The program was successful but scaling operations was not easy. This drove Kunal to pivot and build a program on the backbone of the rapidly growing mobile phone market in India. This became FreeCharge.
“I knew that over 90% of all Indians using a cellphone had a prepaid plan that constantly needing refilling. I was always a postpaid consumer and never knew that recharges were that big,” said Kunal.
Incubated by Tandon Group, and later funded by leading venture capital firm Sequoia Capital, Kunal and Sandeep began building out a platform to allow for online recharge in 2010, encouraging users to participate by offering coupons of equal value for each recharge.
Launchand Early Struggles
FreeCharge launched its recharging platform on August 15, 2011. Sandeep was able to leverage his extensive network and bring on McDonald’s like the launch partner merchant. The company built up a large customer base very quickly. Before too long they were handling over 10 thousand transactions every day. This early success brought with it some challenges.
“The technology platform was built in a hurry. Our users were experiencing failed transactions as we tried to grow faster,” says Shailendra Singh, a managing director at Sequoia Capital India that served on FreeCharge’s board.
The company was still attracting new users, but it couldn’t grow because it simply didn’t have the technology to handle a higher transaction volume. It spent several months in this stalled state until it rearchitected the whole platform and moved a substantial portion of its operations to Bengaluru to be closer to young, talented engineers.
Scaling for Rapid Growth
Sandeep and Kunal quickly realized the need to bring in the right talent to scale. Freecharge rounded out its executive team bringing on industry veterans to serve in key positions of COO and CEO. Among them, Alok Goel, former COO of RedBus. With the re-engineered platform and Alok at the helm, FreeCharge started to really take off in late 2013. The company began to market more aggressively and achieve wider brand recognition around the country.
In January 2014, FreeCharge launched its mobile app. At first, the app only accounted for 10% of transactions, but it grew exponentially throughout the year and now accounts for over 70% of total volume. After a new round of funding, FreeCharge was preparing a multi-year growth strategy to double or even triple its user base of 20 million people.
It had quickly become India’s most transactive e-commerce site with close to 500,000 transactions a day.
Snapdeal Acquisition
Around the same time as the new investment deals closed, Kunal received a call from Snapdeal CEO, Kunal Bahl. Kunal B. met with Kunal S., Sandeep, and Alok at the Sahara Star Hotel in Mumbai, and the subject of an acquisition came up almost immediately. The company leaders focused on the fit between the two companies.
“The first question that came to our mind was of synergy between the two firms,” says Alok. “We did not want one plus one to be two but 11.”
On the other side of the table, Kunal and Snapdeal were thinking not just about FreeCharge’s current user base, but also its potential to grow and expand into new categories. They viewed it as a critical tool to drive long term user growth and engagement.
While FreeCharge is now part of Snapdeal, it will retain its name, brand identity, and leadership.
To Tandon Group, the acquisition of FreeCharge represents another kind of success: that of vision, incubation, mentoring and fostering next-generation innovation and entrepreneurial spirit within its own ranks.
Tandon GroupFreeCharge: Incubated Idea to India’s Biggest Online Acquisition
If you’re an aspiring entrepreneur, at one point, you may need funding. You will need an amazing pitch to obtain seed through Series B investments. To do this you must know the language every venture capitalist uses. Below are the most common terms every startup founder should understand. Who knows, maybe knowing these words going into your next pitch will get you the funding to launch the next big thing!
Accelerator (“Incubator”): A center where startups are mentored by other successful entrepreneurs who guide the founders through the development of an idea to launch, and sometimes beyond!
Burn Rate (Runway): A term to describe how quickly you are spending money in comparison to how soon you believe the startup will break even, or more importantly, generate a profit. Normally the burn rate is a financial projection based on current spending and applied probability decision making.
Early Adopters: A savvy person in your marketplace who will use the newest and greatest product or service available. Read the highly recommended “1,000 True Fans” blog post for a clear meaning of early adopters.
Exit Strategy: A term every startup founder needs to know. This is an explanation of how, and when, you plan to sell the company. Who is going to buy your company, and why? Your investors are in the game to make money, and you will increase your odds of funding by having the exit strategy thought through.
FMA (First Mover Advantage): First mover advantage means you have a product that will create a new market or industry. It takes incredible innovation to get the first-mover advantage, but if you have this then point it out immediately.
Freemium Business Model: This is a business model pioneered by applications and software. The business releases most of its products for free to the public in order to gain market traction. They then upsell the customers who want the updated or more advanced version.
IP (Intellectual Property): This is anything from a patent to a trade secret — like the formula for Coca-Cola — and can be a vital asset to your startup. For instance, Google has IP in the form of their search algorithm.
Loss Leader Pricing: Selling a product at a loss with the expectation of getting repeat business from the initial customers. Normally this would be recorded as a marketing expense when doing the financials.
Market Penetration: This answers the question: “How much of the market can you acquire in (period of time)?” Every venture capitalist requires startup founders to understand the market thoroughly enough to make this prediction.
MVP (Minimum Viable Product): First coined by Frank Robinson, and then popularized by Eric Ries, MVP is the bare-bones version of a product you think will provide a proof of concept. The MVP will generally give you an answer to whether your idea is going to work or not.
Pivoting: Generally means a move from one market segment to another. Say from early adopters to the mass market.
Responsive Design: A term used for software development. It means your web app is responsive to desktop, tablet, and most importantly mobile screen sizes.
ROI (Return on Investment): A performance measure used to evaluate the efficiency of an investment. ROI measures the return in relation to investment. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio.
Split Testing (A/B Testing): A way of conducting controlled experiments with the goal of improvement. This marketing methodology is frequently used to test changes to signup forms, registration pages, calls to action, or any other parts of a website where a measurable goal can be improved.
Term Sheet: A document that outlines what investors are going to receive for providing an investment in your startup. If you get this congratulation, you’re well on your way!
Valuation: This measures the total value of your startup. For instance, say you get an investment for $2 million for 20% of your startup. The startup’s valuation would be a total of $10 million.
Value Proposition: The elements of your product or service consumers would be attracted to compared to your competition.
Hopefully these terms help you better understand the startup culture, and the language venture capitalists use. If you have a startup, Tandon Group wants to work with you! We’ve had successful exits and helped grow companies to millions of users. Reach out to us if you think your company is the next big thing!
Tandon GroupMust Know Business Terms for Startup Founders
If you’re an entrepreneur you most likely have an unwavering passion for innovation. You see the world in a positive way and think about the massive opportunity for improvement. These are vital qualities to being successful. However, if you want this year (and following years) as an entrepreneur to be spectacular, you need to develop the skill of asking great questions. If you want to shorten the learning curve, and grow quickly, keep reading. Below is a list of the important questions every entrepreneur must ask themselves, if they want to be successful in their ventures.
What Does Success Look Like?
You need clarity of vision for success. The reason for this is simple. Once you know exactly what you want (and we mean you must deeply know how the final vision plays out) then you can begin making decisions which move you towards your vision. You will start to see the world in simple terms like: “Does this action help me move towards my vision?” If yes, then take action. If no, then take no action. Write the grand vision you have and make a plan for achieving it, even if the plan is rudimentary, you’ll find the process of planning to be helpful!
What are my limiting beliefs?
“Being an entrepreneur is like eating glass and staring into the abyss,” according to Elon Musk. We think this represents the struggle of what an entrepreneur will face over his/her lifetime. Many successful people often say the gift of entrepreneurship is in the journey, not the outcome, because you get to see a side of yourself you never thought possible. Often, entrepreneurship is a spiritual journey, because leaders will gain insights into their own strengths, weaknesses, unique opportunities, and vulnerabilities. Your job is to find out what your limiting beliefs are, the hidden operating code you have, and eliminate them from your decision making process.
Does my product or service solve a problem or address a real need?
Peter Drucker, the father of modern consulting, once said: “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” What does this mean for you? If your product or service truly solves a deep seated need for the consumer, you’re almost guaranteed success because you’re providing real and tangible value to the world. Often, entrepreneurs fall in love with their idea, instead of doing the hard work of finding a real addressable problem. Don’t fall into this trap.
Who are you going to put out of business and why?
This sounds harsh, but business is a competitive landscape full of obstacles. Unless you’re creating a truly innovative company, meaning you’re first to market (not always a great thing by the way…) you’re going to have competition, and this means you will go toe-to-toe with a competitor for marketshare. It’s best to ask this question early, because at least you won’t be caught blindsided by someone trying to take you under, and you can be on the offensive. Plus, you’ll find out quickly if you have the stomach for business.
What do you stand for? What are you against?
If you want loyal employees and want to be a great leader, you must have a higher “why” outside of making money or gaining market share. Take a lesson from history; Napoleon, the brilliant French general from 1801-1815, was fighting not for personal glory, but for the freedom of the French people from an oppressive government. His men and women stood by his side through chaos because he stood for a principle universal to them all. What does your business stand for which inspires employees to keep pushing when they want to quit? More importantly, what does your business promise to fight? Answers to these questions will reveal an internal motivation you probably never knew existed!
Am I tracking my progress correctly?
We saved this question for last because we think it’s the most important. Tracking your progress is the single greatest action you can take in terms of return on investment. The cost is nearly $0 and the reward is almost exponential. You will gain insights into your hidden patterns you didn’t know you had. For instance, every business needs to track where their money is being spent and the consequences of the spending. The same can be said for every relationship and interaction you have too.
Are you Happy with your Answers to these Questions?
If you’re happy with your answers to the above questions – that’s great news! In our experience, exceptional entrepreneurs are always questioning the status quo. At the Tandon Group we’ve partnered with and invested in dozens of companies over the last two decades, having met with massive success along the way. If you believe your startup is poised to be the next household name, reach out to us. We’d love to be your partner for the road ahead.
Tandon GroupShould Ask Questions (SAQ) for Entrepreneurs
