“There Is More Rigour In Evaluating Whether The Model Is Going To Lead To A Successful IPO”

Karan Bajaj’s vision of making children creators of technology rather being passive consumers of it what led him to start Whitehat Jr in 2018. The startup was later acquired by the edtech giant Byju’s. Prior to starting his edtech venture, Bajaj served as CEO for Discovery, where he led Discovery Networks (Discovery Channel, TLC, Animal Planet and Discovery Kids) in South Asia. Excerpts from an interview:

Given the current economic climate, what should be the focus of entrepreneurs in 2023?
In the last four years there’s been a lot of focus on what’s changed but let’s talk about what hasn’t changed. Even in 2018, when I was raising funds for my first company, I thought that the top funds and the top venture capitalists in India were looking for structurally solid business models with positive unit economics and clear profitability thesis. And, I would say, the wider market has bought that thesis.

Early-stage startups have not been affected by the funding crunch. Why is it so?
Also, why is the environment conservative when it comes to growthstage businesses? There is more rigour in evaluating whether the model is going to lead to a successful IPO. Public markets are going to look at your company with much more rigour and a little bit more of a shorter-term view. Late-stage investors are looking to see if the public market thesis is as robust or not.

Does the performance of a startup impact the ecosystem?
I’ve lived through the journey of the huge surge of the edtech sector, and then the huge decline, all within a compressed period of three years. If you are an entrepreneur you have to be insulated from the ups and downs and just focus on building.

What is your next business?
It’s just very early right now. I have formulated my thesis over the last few weeks and the early response is very positive. This will be in the Tech & Infra sector. I hope to have the operations fully started by early Jan.

What is your leadership mantra?
I think a good leader has the macro vision, and is also good at the micro details. So I hope to be a leader who can transcend both. One who can create a compelling vision for the company he wants to build next but at the same time is detail-oriented in handcrafting the user experience. And as a result of that, he is able to inspire people to be detail-oriented in understanding the user.

Your advice to young entrepreneurs...
Startups start at the edges of the system. And the only way you’ll know whether your startup will work or not is to launch the first version of the product very quickly. And if you can get one paying user, you can get a million paying customers. If you get one solid customer through a regular funnel, have the confidence that you can scale it up to millions.