Why Kunal Shah believes founders should not fall in love with their own ideas
The FreeCharge Founder and CEO reveals the secrets behind his success – and why one of them involves standing in public places all day and talking to 500 people
On Wednesday night, around 70 startup founders gathered at a small café in South Jakarta to listen to a fireside chat between 500 Startups Managing Partner Khailee Ng and successful Indian entrepreneur Kunal Shah.
For those who don’t know, Shah is the co-founder of Freecharge, an online recharging platform which got acquired by e-commerce major Snapdeal for US$400 million in April last year. The deal is believed to be the largest in the history of India’s tech startup industry.
That night, Shah stood by a whiteboard in front of the audience to explain how to evaluate a startup idea and whether it is worth doing or not.
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“Let’s assume that all inefficient stuff exists in the past and all efficient stuff exists in the future … Today is the most efficient state we can ever be,” he said, drawing a table marked with ‘column A’ and ‘column B’, with A being the past and B future.
“When we move from A to B, every hurdle that comes our way is a pot of gold. Those who move the hurdles can claim the pot and become rich,” he explained.
Shah then asked the audience to give a score on a scale of one to 10 on taxi services before and after the entry of ride-hailing apps. Many audiences came up a score of 2 to 5 for conventional taxi services (column A), and around 7 to 8 score for taxi apps (column B).
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The higher the difference between A and B, the lesser the chance for people to go back to the old ways after they have experienced the new ways. And this is the level of innovation startups should aim to achieve, he said.
Customer (feedback) is king
Shah has deep understanding of the theoretical side of innovation, as his educational background lies in philosophy.
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“I was supposed to be doing Engineering, but I had no motivation to do it. So, I dropped out and pursued my degree in Philosophy. At that time, I did not know how it was going to create an impact; I just picked the subject because I heard Philosophy students talked in the cafeteria about what they learnt that day, and I was like ‘this sh*t is really good’,” he explained. “I wasn’t really thinking about things like employability then.”
Starting his career as a junior programmer at a BPO startup, Shah had a defining moment in the life when he had to choose between buying a new house and starting own company.
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“I pretty much started working when I was 14, doing almost anything, from selling mixtapes to pirated stuff to teaching people how to use the Internet,” he said about his entrepreneurial journey.
He started Freecharge in 2010, along with Sandeep Tandon. He had previously founded a company called Paisaback. At the time of exit, Freecharge was doing around 600,000 transactions per day — a number they managed to reach within 4.5 years with only seven people in the team.
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Shah says that one of the secrets behind Freecharge’s success is his insistence to use traditional method of consumer research. “One thing that I see among tech startup founders is that they do research on a chair,” he said, tapping on the chair he was seated. “It doesn’t work. When you talk to 500 people, you get more than what you asked for, and that are the real insights … Even after the acquisition, I’m still talking to my customers every day,” he added.
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Shah is also not crazy about using social media buzzers or digital ads to promote a product or service; he believes in the power of word-of-mouth marketing.
“Google and Facebook are designed to make you lazy on customer acquisition. The true customer acquisition happens when you do the rough ways: when every customer falls in love with what you’re doing and talks to other people about it,” he said.
“You should figure out the ‘brag-worthy’ aspect of your product. If you don’t, you’re going to keep on burning the fuel of marketing dollars,” he affirmed.
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Startups, give up the yoga rooms, please
During the fireside chat, Shah also shared his views on many different aspects of running a company, including efficiency. “We are a half-a-billion-dollar company and we have a shitty office. I see Series A companies having a yoga room in their office, and I was like “what are you doing? Are you trying to impress your girlfriend?”
Last but not least, Shah has a warning for all founders. “Falling in love with an idea is a dangerous thing. I believe that the only thing one needs to be in love with is to be successful and creating an impact … because there’s a very huge chance that [your idea] is bullsh*t.”
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