What do Indian startups like Razorpay, Meesho, Cleartax, MyGate, and Vedantu have in common? A school called xto10x. Let us explain.
Most people would agree that all they have successfully reached initial product-market fit—they’ve found a large set of customers who have an urgent problem and developed a product that solves it in a meaningful way.
In startup lore, reaching product-market fit is considered as a rite of passage. A majority of startups fail to cross this “chasm of death” and the ones that do, find themselves courted by investors chasing the next big thing.
So all the startups mentioned above have duly raised tens of millions of dollars from marquee investors at valuations well north of $100 million.
But startups are hard
Crossing the product-market fit hurdle does not make things easier. Most of these startups’ challenges pertain to scale—the topline without sacrificing margins, its product portfolio without losing the core original value proposition, the organisation itself to handle hypergrowth?
There are no easy answers to any of these questions and getting even one of them wrong can potentially derail a startup.
So what did Razorpay, Meesho, Cleartax, MyGate, and Vedantu do?
They all enlisted themselves into the startup school xto10x Technologies. Founded by Binny Bansal, Flipkart’s co-founder and former chief executive, along with some former colleagues from the e-commerce company, xto10x is a Bengaluru-based entity. It helps companies like the ones named above manage scale and growth.
So far, this nearly-one-year-old company has been a bit of an enigma. Most people in the startup ecosystem that we reached out to—from startups to venture capitalists—didn’t even know about it. We were met with responses like “I have no view on it” or “I have no idea about it”.
But the most interesting part about xto10x is not what it is, but rather what it isn’t.
It is not an investor.
It is not an accelerator.
Neither is it the “SAP of startups” providing enterprise software tailored for growing startups.
It wants to, however, build software. Starting with a tool to manage OKRs (objectives and key results) by April 2020. The tool, it hopes, would help it translate the strategic priorities for hundreds of people in an organisation. (OKR is a goal-setting and performance management tool that was popularised by Google. Leading social media companies like Twitter and LinkedIn use it. OKRs help understand organisational bandwidth for tasks.)
But why is any of this interesting?
The exit from Flipkart in 2018 made Binny Bansal one of India’s newly-minted billionaires. Most people would have expected him to morph at least partially into an angel investor deploying his new-found wealth into other startups. Much like his erstwhile partner Sachin Bansal—he’s an investor in ride-hailing company Ola, scooter rental startups like Vogo and Bounce, among others. But while Binny Bansal has made a few personal angel investment bets, he has deliberately chosen not to fashion xto10x as an investment vehicle.
Saikiran Krishnamurthy, co-founder, and CEO at xto10x (and formerly the head of Flipkart-owned logistics company Ekart) says that xto10x has a rule about investing, “We won’t invest, we don’t give any capital neither would we be present in investor meetings or take part in fundraising conversations.”
Why this rule?
To answer this question, we need to look at the current state of the startup landscape in India.
The funding-execution chasm
Perhaps for the first time ever, India is in a funding market where there is no scarcity of capital. While seed-level, early-stage funding might still be a challenge, later-stage funding for companies that have found the initial product-market fit is abundant and easily available. Several home-grown, as well as international funds, are jostling to invest in companies that can potentially conquer sunrise sectors in India, the next big market after China.
But there are two problems here.