N. Sriram of Venture Intelligence recently spoke with Atul Phadnis, Founder and Promoter of What’s On India, a company that focuses on TV Guidance and Electronic Program Guides (EPG) for all the major TV channel networks and operators in India. What’s On recently raised a round of funding from leading venture funds. Excerpts from the interview, the full version of which was published in the Q1'09 Venture Intelligence India Venture Capital Report:
Venture Intelligence: Could you tell us why you went for VC funding? Were there other options?
Atul Phadnis: We went for VC funding for two reasons: largely to scale up our current operations and also to expand into some of the newer but related areas.
VI: What were the key challenges you faced in raising VC funds?
AP: We entered the market in 2005 at an inflection point of the analog Indian television industry going digital. At the time, we faced two key challenges. One was lack of comparable benchmarks from other markets. While these benchmarks are very critical from the VC perspective, the Indian TV market conditions were not directly comparable with any other market. This would create a disturbance in the prospective investor’s mind as to how to value the opportunity that our company presented. It was only in 2008 as the digital TV market exploded, that it became clear that we were on the right track and marching towards a real potential.
Secondly, my personal observation is that a lot of investors that we’d initially met understood mobile, online, technology, realty, etc much better that they understood niche verticals within media. The task for an entrepreneur in this arena is that much more difficult.
VI: Your company was earlier known as Mediae2e, focusing more on product placement valuations, analytics, etc. What’s-On-India focuses more on EPG. How has this change come about?
AP: Mediae2e was set up in 2005. The primary focus was always to focus on EPG and TV Guidance. In fact, EPG was the first business that we initiated from an R&D perspective. But we decided not to talk about it in the first year-and-a-half due to competitive fears.
During this initial period, we straddled two other somewhat diverse businesses - more from the perspective of generating cash-flows. These businesses were largely in the realm of Analytics and Consulting. Our consulting work also helped keep in touch with the potential clients for the EPG business. Since the company was self-funded during the first year or so, these verticals helped pay our bills.
VI: What is your advice for any entrepreneur who seeks VC funding?
AP: At what stage an entrepreneur should go for VC funding is best left to him and the vision that he has to scale his enterprise. But to sharpen and expand that vision, entrepreneurs should, in my view, actively seek mentorship in four key areas: domain expertise, business strategy, financial management and corporate governance. An entrepreneur without a mentor in any of these four areas is rather acutely exposed. Besides this, it’s very crucial to get a winning team in place that has the patience, motivation and maturity to stay the course in the initial tough years of the start-up.