Alok Mittal of Indifi on why org culture should not be defined but discovered
May 2, 2024
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Alok Mittal, experienced founder and VC, discusses the importance of mid-management in org building. He shares insights on failures, risk assessment as VC & founder, and lending to SMEs. Alok's journey from VC to entrepreneur, strategic decision-making, and fostering company culture are also explored.
Founders should prioritize strong conviction and hands-on involvement in building successful organizations.
Sector-specific lending and digitization enhance credit risk assessment and operational efficiency.
Strategic capital deployment and sustainable growth are crucial for long-term value creation in entrepreneurship.
Deep dives
Alok Mital's Shift from Venture Capitalist to Entrepreneur and His Unique Approach to Building Startups
Alok Mital, a former venture capitalist, transitioned into entrepreneurship and highlighted his preference for backing founders who are deeply committed to their beliefs and dedicated to building successful products and organizations. He discussed his journey from founding his first startup, Zip Ahead, to later launching Jobs Ahead, emphasizing the importance of execution in shaping the business's direction. Mital's entrepreneurial path underscores the significance of strong conviction and hands-on involvement in driving startup success.
Indifi's Focused Sectoral Approach and Digitization Strategy for Small Business Lending
Alok Mital's venture, Indifi, adopts a sector-specific lending strategy catering to businesses in sectors like travel, e-commerce, startups, hotels, and restaurants. Indifi's focus on sectors with high digitization potential aligns with its aim to leverage technological advancements for assessing credit risk and streamlining lending operations. The podcast delves into the elaborate credit models used by Indifi, emphasizing how digitization facilitates efficient customer access, enhances underwriting quality, and reduces operational costs.
Balancing Capital Deployment and Long-Term Business Building in Entrepreneurship
In navigating the venture capital landscape, Alok Mital shares insights on strategic capital deployment, urging entrepreneurs to resist the pressure of indiscriminate funding utilization. He advocates for aligning capital infusion with organic business growth and maintaining a coherent sequence in business development despite securing surplus funding. Mital's perspective encourages founders to prioritize sustainable growth over hasty capital expenditure, fostering long-term value creation and strategic decision-making in entrepreneurship.
Investing in Balance Sheet-Based Financial Services in India
Investors in the Indian market transitioned to recognize the potential for venture-style returns in balance sheet-based financial services businesses around 2010. By investing in ventures like Equitas Micro Finance, they understood the scalability of such enterprises and the higher exit multiples they could yield. This shift highlighted the market's white space opportunities and the significance of execution risk over concept risk in a high-growth market like India.
Building Lasting Organizations and Cultivating a Founder Mentality
Establishing lasting organizations requires a culture of continuous reinvention, nurturing innovators, and endorsing risk-taking within the company. The pivotal mid-management layer acts as a conduit for bridging leadership directives and practical implementation. Developing a founder mentality among employees involves encouraging autonomy, embracing failure as a learning opportunity, and fostering a culture that values authenticity and problem-solving over excessive tenure or hierarchy.
Alok Mittal has been on both ends of the startup ecosystem. He’s been a founder and a VC. These days he’s back in the founder’s seat but still enabling businesses but through his lending platform Indifi which lends money to Small and Medium Enterprises or SMEs.
He has very strong thoughts about org building even though he admits Indifi is only 9 years old. He speaks from his observations and his strong beliefs. In Alok’s mind it’s the mid-management which holds together the organization and not necessarily the leadership team.
Alok also has the history of setting up three ventures, which includes the part he played in setting up Canaan Partners, a VC firm in India. Then of course there is JobsAhead which was his first startup and now he’s busy lending to the sector which contributes to 30% of the country’s GDP, and yet finds credit hard to come by.
Alok hung up his VC shoes in 2015 to solve this problem and take on the problem of lending to SMEs, the ones who were being given a pass by traditional banks and NBFCs. But they’re not leaning on solving for every SME out there. Indifi have found the sectors they want to lend to and are working towards making these businesses get access to credit.
He also talked about:
Failures and the learnings it brings
How he assesses risks as a VC and a founder
The bible of raising money
Advice to Young entrepreneurs
Listen to all of that and a whole lot more in this Part 1 episode of our conversation with Alok Mittal.
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