Monthly Archives: January 2016

INTRODUCTION

In the remote pockets of Ganjam district in Odisha, there exist villages where electricity supply and canal irrigation to the agricultural fields is unavailable. With the ground water level at a depth of 60 feet, coupled with the poor economic status of farmers in these areas, the very use of water pumps for irrigation is a far-fetched idea. In the absence of basic necessity for crop cultivation, the marginal farmers refrain themselves from growing year round crops. They are constrained to grow rainfed paddy each year.

REQUIREMENT & APPROACH

To address the irrigation woes of these farmers, a local NGO organization – Indian Grameen Services – opted for a sustainable community development solution. They suggested an intervention wherein 10-15 marginal farmers could be benefited per system. They partnered with Claro Energy specialising in solar water pumping solutions for two such villages. Claro Energy’s team carried out an extensive site assessment, understood the need and proposed 2 HP submersible systems – one for each location.

The systems installed are being operated on a daily basis by the farmer group which has prepared a schedule for each one’s usage. As the IGS aims at a sustainable development, they have encouraged the farmer group to collect agreed usage charges which subsequently shall be deposited in a joint account. The money thus collected shall then be used for the group’s agricultural development.

IMPACT

• The farmers have been empowered to grow multiple crops which can serve as a potential source of additional income.
• Community development resulting in improved standard of living of the associated farmers

This was supposed to be a one-off piece, when I was first invited to share my experiences as a startup entrepreneur — mostly lessons learnt along the journey. When I sat down to write, I was flooded with thoughts of so many experiences that taught me so much, way more than I had imagined. The mind was flush with memories of phases of endurance, patience, hardships, despair, hope, resilience, jealously, celebration, and much more. I figured there was so much to write and we decided to make this a series of articles over a 4-week period. In that moment, I also for the first time took stock and realised that this has been no easy journey. From extreme despair to being absolutely ecstatic, the swings were pretty wild on most days. Despite all the hardships and irrespective of the degree of success of the venture (we would consider ourselves a moderate success), the journey can be immensely fulfilling as it has been for us. Learnings have been immense. Starting today, I’ll share a lesson or two every week, with the hope that some of you contemplating entrepreneurship can make that journey more joyful and fulfilling.

The first step is the hardest

The first thing that I learnt about entrepreneurship was that it is actually the first step that is the hardest; taking that leap of faith! To quit whatever else that you are doing, and to dive into this world of uncertainty. Most people I meet these days have a desire to be an entrepreneur buried deep down somewhere. Eventually, it gets to choosing between a low risk, steady cash flow corporate life and a highly volatile life with uncertain cash flows as an entrepreneur. Most people at best just keep delaying this decision and often never really go for it.

I come from a family of entrepreneurs. Every generation in my family (my father, grandfather and great grandfather) went on to start their own ventures and found varied degrees of success. Having seen such entrepreneurial spirit in the family, embracing entrepreneurship came rather naturally to me. However, my partners Gaurav and Soumitra did not see entrepreneurship as their comfort zone. It took me more than six months to convince Gaurav (a close friend from undergrad) to quit his rather well-paying job in the oil & gas sector in the Middle East, and join our rather fledgling startup in early 2011. By no means was this plunge easy for him. Now, more than four years into entrepreneurship, he can’t imagine a life otherwise.

I had read this somewhere a long time ago and it stuck; ‘If you choose not to decide, you’ve still made a choice’! For those of you still contemplating entrepreneurship, the first step and perhaps the hardest, is to take the plunge. But, once you’re in, you’ll figure out how to swim. Don’t stress too much on the fine tuning of the business plan because no matter what you do, the plan will be turned upside down a few months into the venture.

Not everyone is going to be a Flipkart

When an entrepreneur embarks on this journey, it is natural to have larger than life ambitions. The burden of one’s own expectations (of success) is quite crushing and one tends to set unreasonably high benchmarks of success. I’m not suggesting you don’t aim high, but in the day and age when the Flipkarts and Ola Cabs are lapping up hundreds of millions of dollars at billion dollar plus valuations, one imagines his entrepreneurial journey to be nothing less spectacular. The reality, however, is that most new ventures are not as fortunate and have to really rough it out for a long time for survival and then success. Just be cognisant of this reality and you will spare yourself a lot of unnecessary stress and anxiety.

Most business journals these days have a new found drive (and not without reason) to extensively cover startups and write about related stuff. The startup scene in India has exploded in the past couple of years, and with the volume of deal flow increasing, there is a lot of fodder for everyone. Shrinking growth cycles and the meteoric rise of some ventures in rather short time spans provide enough gunpowder for some glamourous stories. And it’s mostly the positive stuff that makes it to the front page. Then there are online portals such as VCCircle, DealCurry, and MYB that most of us aspiring or current entrepreneurs follow, that make sure that any story that might have slipped through the cracks is profiled too. I have to be honest. Every time I read about a deal (equity investment/acquisition) in a startup, I suffer bouts of mild depression. As a non VC-funded venture one feels like a lesser citizen of the startup world and distorts one’s own measure of success. Nothing could be more unfortunate and further from reality though. Raising equity capital is not the be all and end all and by no means the only benchmark of success for a venture. Focus on being profitable, try and explore possibilities of raising debt. It might be a longer route to success, but works out better for a lot of startups. At Claro Energy, we are still untouched by organised venture capital (barring some small money from friends and family), but we raised debt and have managed to drum up a Rs 25-crore top-line this past financial year. We’re cash flow positive and employ over 120 people.

INTRODUCTION

Nashik Vinters Pvt Ltd popularly known as makers of Sula Wines, India’s leading wine producers cultivate their own vineyards in Nashik, Maharashtra. To maintain the high quality of wine, providing water at specified regular intervals is a must. The company thus lays great emphasis on providing proper irrigation.

REQUIREMENT & APPROACH

Erratic supply of electricity leads to frequent usage of diesel for running the pumps. This results in excessive expenditure on irrigation. To offset this cost and to make the cultivation self sustainable, Nashik Vinters Pvt. Ltd finalised the installation of a solar water pump. A complete understanding of the client requirement along with necessary technical parameters was taken, and a system of 5 HP (4800 Wp) was installed to make the water available upto the last nozzle of the drip spread across half a kilometre. This system pumps 1,14,000 litres of water per day up the hill side from its installed location in a valley.

BENEFITS

• By opting for a renewable energy alternative to run their pump, Nashik Vinters Pvt Ltd has earned the eligibility of availing 100% Accelerated Depreciation applicable on Solar Water Pumping system. This has resulted in significant tax saving for the organisation.
• The system has resulted in reduction of operational expenditure on electricity and diesel.
• With assured means of irrigation available that is a natural fit with drip installation, the vineyard now has access to uninterrupted water supply which will result in improved yields and increased productivity.

If I can take one thing away from my internship(s) at Claro Energy, it’s that Claro is an organisation which treats all its interns as full time employees and assigns them tasks and responsibilities that optimises their time, effort and skill. I entered as an undergraduate student looking for hands on, real world business experience and boy, did Claro deliver.

From day one, the directors themselves assigned to me a list of tasks and goals after gauging my technical and design level. However, they did not explicitly mention the path I had to take to achieve these goals. They wanted me to give myself deadlines and come up with strategies on my own! This is where the real learning began. Many a times I was forced to think out of the box, to look at things from a different perspective and to rethink and perfect game plans. This exercise made me hone my skill of problem solving. I indeed made mistakes along the way but the staff and the directors were always there to discuss problems and lend a helping hand.

At Claro Energy, people are always up for new and different ideas. There are no set rules for any given function. If you have ideas to improve processes, they want you to speak up and you are duly credited for your help.

If you get the opportunity to intern with Claro Energy, I would urge you to be open to all lines of work. Although I was part of the social media marketing team, I got to witness how the business development, procurement and installation divisions function. I was also invited along with all the other interns to attend their annual offsite retreat where all employees from across the country got together for an action packed weekend. Employees from different departments collectively shared ideas to make procedures more efficient and optimise results. The directors explained long term game plans and strategies for the future. Just to witness this discussion was an immense learning in itself. You could really see the entrepreneurial vibe ebbing from all employees.

If you have the chance, I would definitely recommend interning with Claro Energy! You can email me for further questions.

Internships are a gateway to a world full of possibility and opportunity. Being in my final year of engineering I was looking to intern in an organization where I could gain valuable work experience. I got a reference at Claro Energy and they were kind enough to let me intern for a month (Dec 2014).

At Claro Energy, although an intern, you are treated as a full time employee. This is something all students look for. You are made responsible and accountable from the very first day. The thrill and satisfaction you get by contributing to the daily working of the organization is something you may never experience in a big organization. You look forward to every day of work at the organisation and you hardly understand how time passes by.

During my time there, I was assigned work mainly in the area of Digital Marketing. Although I was from an engineering background, I jumped at this opportunity as this is an emerging field and will be the decisive factor in developing the organization’s brand value. I was working on content creation for various social media handles of the organisation. I also had the opportunity to design content for Claro Energy’s company website as it was being planned and set up during my period. Working on these tasks helped me understand and appreciate the challenge and opportunity that energy access practitioners face while using social media to build brand awareness. The knowledge that I have gained in this area while at Claro is of significant importance to me.

On 15th December 2015, I had the privilege to attend a report launch followed by a panel discussion on `Deployment of Decentralized Renewable Energy Solutions’ organised by WWF India and Selco Foundation. The event comprised of panel members from esteemed institutions such as MNRE, NABARD, SECI and SIDBI. Issues related to structural and financial barriers in Renewable Energy Projects were addressed. Also new initiatives taken by the government to promote solar as an important energy resource were highlighted. The event made me further realise the opportunity available in the renewable energy space and was extremely insightful.

In addition to Digital Marketing, I learnt about the technical aspects of various products offered by Claro Energy. The visit to the test bed gave me a very clear idea of the entire system running. I also learnt how the remote monitoring device is integrated with the systems to record performance. To promote use of solar as a resource and increase awareness on solar water pumping, a Paint a Wall competition was organized for school children in the power deficit regions of Amroha district, UP. I helped organise this event on the ground. It was a bottoms up approach by Claro Energy to educate the upcoming generation on benefits of Solar Energy. The experience was a wonderful one and it gave me an actual picture of the scenario on the ground.

Coming to the help and support you’re provided with at Claro Energy, it’s something no intern will ever expect. Everyone including the senior staff and the director take time out and explain things to you whenever you need help. The working environment is very positive and you always feel like contributing more. These are a few factors every intern should look at and consider while choosing an internship.

The informal celebration we had at the office during Christmas took me completely by surprise. The camaraderie and friendship that exists between the employees speaks volumes about the work culture at the office . My experience at Claro Energy was a thoroughly delightful one. The knowledge and learning that I have gained here will surely stay with me for a lifetime.

Sometime back I read a blog on Harvard Business Review. It talks of something called ‘Entrepreneurship porn’. In essence, the blog summed up the reality of the startup world, or rather how it is perceived by everyone. There is a distorted view of the life that a startup founder lives – often projected as rather glamorous.

However, beneath the glamour are always the lesser stories that get no mention. After all, most startups fail, very few survive beyond three years to achieve modest success and only a handful see the meteoric success akin to that of say a Flipkart or an Ola. Failure is messier than success, the stories of struggle can be depressing and the uncertainty (of cash flows mostly) is nerve wracking. One can’t turn a blind eye to that.

I graduated from Kellogg School of Management with a $145,000 student loan on my back. A few weeks after I graduated in 2010, I moved to California and we conceptualized Claro Energy. I prepared a forecast of my personal cash flows putting in a six-month lean period, post which I expected a modest salary for myself from the venture to cover basic lifestyle costs and a small repayment on my student loan. I put in a contingency of another six months to factor in the worst. In reality, the first salary (which by all means was very modest) we could pay ourselves was in July 2013, almost three years after we had started. The school was supportive enough to give me a moratorium of two years on my loan before I started my repayment. But by any measure, nothing prepares you for this. You need to know that such uncertainties are going to be there and that you’ll have to figure out ways to deal with them.

The first few months of an entrepreneurial journey are awesome. You’re the darling of all cocktail conversations. The very idea of being the captain of this new vessel is exciting. However, few realise how much it takes to sustain a new venture, especially in the initial years of struggle. This is a long haul, not something for those who can’t endure long periods of struggle. Do it if you can be in it for the long run. Stick to your guns. Don’t quit easily, something usually does work out.

Value your co-founders

Multiple co-founders is the new normal. Housing.com had 12 founders when they started out in 2012 (though that might be a bit of an exception)! The relationship between co-founders is very sensitive and critical to the longevity and success of the venture. Industry life cycles have shrunk significantly, there is hyper competition and one needs as many hands on the deck to survive the initial mayhem.

Soumitra, Gaurav and I fight, bicker, argue on just about everything on a daily basis, and in most of these arguments only one point of view typically prevails. But we’ve been able to arrive at this interesting but delicate equilibrium of mutual respect such that all three of us are able to curb our egos and draw comfort from the fact that at the end of the day the most relevant decision that benefits the venture should prevail. For instance, having spent 10 years working in the US, Soumitra wants a very Silicon Valley-style operation, while Gaurav and I are too eager to dismiss it on grounds of impracticality in the Indian context. But we realise that his US experience helps instil a sense of culture, professionalism and being detail-oriented within the organisation — virtues that have helped us immensely.

All co-founders will be unique in how they deal with situations, especially the not-so-pleasant ones. They will differ in their ability to endure, having different patience levels. There will be conflict, disagreement, arguments and at times you will even question the value that your co-founder brings! It’ll be easy to let your ego go on a trip and logic might take a hike. Avoid that! You’ll get emotional easily but don’t damage the relationship irreversibly. You must rid yourself of such thoughts and respect each other.

INTRODUCTION

Agricultural growth and development of Bihar has remained constricted because of irrigation energy deficiency in the state. Ironically, although the region has a vast reserve of groundwater resources, the progress in the area of irrigation has remained stagnant. Electricity is both inadequate and irregular and its consumption for irrigation is very low. Cultivators in th e region are primarily dependent on diesel based irrigation which they find difficult to afford. Many farmers even ha ve to forgo the entire Summer/ ’ Garma ’ crop because of lack of resources. In this scenario, solar water pumps, which are capable of providin g economical and reliable irrigation, were introduced to address the irrigation woes of the farmers .

CHALLENGE

Reviving Defunct Community Tube Well Cluster Many of the tube wells in the Nalanda district of Bihar had become defunct as they were equipped with diesel engines that consumed around 3 litres of f u e l per hour of operation; as a result irrigation became unaffordable for farmers. Only a few of the comm unity tube wells with access to electricity in the vicinity remained operational. To initiate a solution to these problems, the Department of Minor Water Resources – Bihar, in partnership with Claro Energy launched a program in 2012 to solari z e 34 existing tube wells in 20 villages of the district. This was the first large scale initiative in Eastern India to use non – conventional sources of energy for groundwater utilization. This project aimed for dual accountability i.e. to demonstrate effectiveness of the technology and to showcase an institutional model of solar power based irrigation in the state.

APPROACH

The tube wells which were selected to be operated on solar power were located in 20 villages in five blocks of the Nalanda district. The tube wells were equipped with 7.5 HP submersible pumps with discharge capacity of 70,000 litres per hour. The solarization was carried out by Claro Energy. Three components were added to the existing tube wells ; Solar modules of 8.5 kW ca pacity, Variable frequency controller (VFD), and Remote monitoring systems. In addition to this, Claro Energy was given the responsibility of operations and maintenance of the solarized tube wells for five years.

Economical Irrigation Made Possible

As mentioned earlier, majority of farmers in the region were dependent on diesel pumps. With consistent increase in price o f diesel, irrigation rates were soaring. There were additional problems, reportedly, relating t o adulteration of fuel and cheating by the pump owners in measurements. Although tube well irrigation based on electric power was available in a few villages of the region; facility of three phase electric power was awaited in large parts of rural areas. I n some villages electric tube wells were working but power was available only for 4 – 5 hours per day. There was no fixed schedule; farmers kept waiting and on many occasions had to irrigate fields at night. In this situation, solar water pumps came as a boo n to beneficiary farmers.

Additional Income Generation

Prior to installation of the Solar Water pumps, most farmers did two cultivations in a year as growing the crop in the peak summer season was practically impossible for them owing to h igh evaporation and resulting increase in irrigation cost s . Those farmers who did grow the ‘ garma ’ crop had to opt for variet ies which were less water intensive. This led to limited revenues because of the low commercial value of cultivated crops. Solar pumps operate very effectively during peak summers, owing to the high sunlight irradiation. Beneficiaries shared that in t his p eriod, a solar tube well (7.5 HP) can support irrigation in up to 40 hectares of cropped area (over 3 seasons) . Hence, the farmers were able to have yearlong access to assured and economical irrigation and could now grow t hree crops instead of just two, in cluding high valued commercial crops. Solar Pumps had thus resulted in additional income generation, increased land utilization and crop diversification. Social And Environmental Impact The program helped in reducing 511 tonnes of carbon dioxide emissions annually, while providing water supply to 1,600 acres of land. At least 45 direct and 80 indirect jobs were created and the project benefited more than 3,000 families in the Nalanda district.

Maintenance Of Installation

Predominantly the solar pumps functioned without any interruptions and problems. In case of any issue, operators were expected to call the local office (in the district headquarter) for help. Presence of a local office with competen t technical staff helped in extending quick response and solutions. Claro Energy’s team provided extensive training to the operators which made the daily operation easier for the beneficiaries.

CONCLUSION

The Nalanda project demonstrates the effectiveness of the solar technology and it has presented an institutional model for growth of solar pumps. Showcasing immense possibilities that solar power based tube wells offer, it has shown how solar pumps can significantly con tribute in reducing irrigation – energy deficits and how ensuring groundwater based agriculture growth in Bihar can help in significant increase in the total cultivated area and income generation.

Claro Energy presents an excellent learning opportunity to its interns. It provides an amenable platform to think, create and run your ideas, with timely guidance and honest reviews from mentors. The warm and friendly office environment, coupled with an open work culture strikes the perfect balance for an inviting work space that encourages freedom of thought. All in all, a truly enriching experience.

A classic founder’s syndrome is to get involved in every functional role at the start-up. Almost every entrepreneur goes through this learning, spreading themselves too thin only to realise that it is not sustainable. Unless you lap up mega bucks from a venture capitalist (VC) in the first few months, you are more than likely to have a young inexperienced (read affordable) team, that will require a lot of grooming and handholding initially. You will find yourself splitting your time between countless activities completely choking your bandwidth. As you will get entrenched into day to day operations, you’ll have little to no time for any strategic thinking or even to reflect on your decisions and do course correction. Even after being at it for five years, I’m still trying to learn how to block some time everyday just for myself, ‘me’ time when I’m not being bogged down by operational issues and the daily firefighting, but I am thinking of things that will take us to the next level. The only real work I’m able to do every time (everything else is operational firefighting) is at a quaint little café close to my office. With an open door policy, I have no check on my personal time, and with people walking in all the time with all kinds of issues, I’m barely thinking of strategic issues or anything that is not core to daily operations. The café is my escape pod where I’m off email and phone calls, ear plugs playing my favourite music with me making notes on things that otherwise get buried under the daily operational mayhem. That is when I’m doing real value addition.

Focus on cash flows and not (only) fund raising

Most start-ups set fund raising (venture capital) as the most important milestone. Never make that mistake! This can set you off on a deathly spiral that will completely consume your venture. One must prepare for a life without an equity infusion. And, the only way you can be prepared for such a life is by not losing sight of the single most important goal of becoming cash flow positive. For every start-up that gets funded, there are hundreds that don’t. Law of probability tells us that you very well might be in the larger pool of non-funded ventures. Besides, while venture capital is a great validation for your venture, it comes at a significant cost. The equity that you dilute is not the real cost of raising money. Instead it is the loss of control that is more expensive. By getting to a cash flow positive state (and staying there), one not only increases the longevity of the venture, but also wields a greater bargaining power when negotiating with VCs. By no means am I suggesting that one should say no to VC money. One must proceed with extreme caution when evaluating capital infusion. I’ve met several entrepreneurs, who rue the fact that they raised equity capital too early. Not only that, the entire process of fund raising (scouting for investors/initial assessments/elaborate documentation/several rounds of discussions/due diligence) is very time-consuming and completely saps you of all your energy taking the focus away from your core operations. Lapping up VC money is seen as the start-up having made it, when the reality is that this is just the beginning. This is where the ride becomes tricky for the founder.

Invest time in building Human Capital

Human capital is the ultimate bottleneck for any organisation looking to scale. It is also the most overlooked aspect of business by most founders. Systems and processes are only enabling tools that help reduce the odds of making gross errors but eventually it’s a great team that will take you to that next level. It’s the quality of this human capital that will dictate the direction and quantum of your start-up’s growth. It is only natural to have a very sales-driven approach during the early years. However, smart entrepreneurs quickly realise the importance of allocating significant bandwidth towards building teams.

While there might be a beeline of enthusiastic job-seekers all too keen to work for a Flipkart or a Snapdeal, your modest start-up will not be as fancied. In fact, it’ll be an uphill task to recruit and even tougher to retain talent. The start-up’s brand equity will most likely not have the pull and you won’t be able to offer industry salaries. But you will still have to push hard to bring the right, if not the best, people on board. There will be a great deal of selling that as a founder you will personally have to do in order to convince people to join.

Another mistake that almost all of us make is hire for skill and background while ignoring ‘fit’ as an overemphasised buzzword. I learnt it the hard way but the ‘fit’ actually matters a lot! Here is my understanding of ‘fit’. At a very basic level, not everyone is cut out for start-ups. Modest offices, frequently evolving roles, limited supporting infrastructure, an unstructured environment, and lack of clarity in medium-term, high stress levels, are some factors that can be very unnerving for even the best of employees. In our first three years, we hired anyone who was willing to come on board. It was only later that we realised that hiring merited a direct and much deeper involvement of one or more co-founders. What I learnt over the years was that it is imperative to identify people, who have fire in their belly, those who might look like underachievers on a resume but have this innate desire to prove detractors wrong, motivated people whom you can inspire and align with your vision for the start-up. Be upfront in setting expectations, especially if someone is coming with a large company experience. I make sure that in my interviews, I spend ample time talking about how the candidate feels about working in an unstructured environment and what motivates her. My best recruits have been the ones where people wanted to challenge themselves, and almost had a personal agenda to prove to the world. It’s a treat to work with such people.

I would like to share my experience with Claro Energy during my internship period of about 7 weeks (1st July to 14th August’15).

Claro Energy has an open environment where innovative and smart ideas are acknowledged and rewarded. The management is very adaptive and has an open door policy, if you are smart, focused, enterprising, intelligent then you have lot of space to grow in this excellent organisation. The mentors are cool and very helpful. The founders of the organisation take special interest in satisfaction of their staff. In all, Claro is a family with good and talented people.