Make Your Mother-in-Law Your First VC
Family support and bootstrapping with a paycheck are tried-and-true methods for entrepreneurs. Don’t overlook them.
By Sramana Mitra (Founder, One Million by One Million)
Sangeeta Banerjee, CEO of apartment society management software firm ApartmentADDA, grew up in a modest environment in Kolkata, India. As a child, Sangeeta faced a lot of ridicule for riding a bicycle to school, plodding through the immense, bustling metropolis that hummed with bus horns, zig-zagging cars, rickshaws and scooters. She would ride her bicycle to a ferry, then once on the other side of the river, she would take a bus to school. People would tell her to keep her bicycle off the road and in the playground. They felt her parents were careless with their daughter’s safety.
Her parents, however, thought differently. They wanted her to be self-sufficient and know how to take care of herself. They wanted to instil in her the belief that she could do anything and that she was no different from a man.
Despite growing up in a conservative area where girls were not encouraged to do most activities that boys took for granted, she went on to be the first woman to get an engineering degree and the first entrepreneur in her family. Her parents instilled in her the right attitude to become an entrepreneur, but it was the support from her mother-in-law that allowed her to truly become one.
Sangeeta met her future husband and co-founder, Venkat Kandaswamy, while pursuing her degree in electrical engineering in Chennai. They got married in 2003. Venkat was pursuing his MS from Louisiana State University (LSU) and Sangeeta also joined LSU to pursue her MBA. Upon graduation, she was recruited by Capgemini in the U.S. to work on SAP and ERP systems. The job involved a lot of travel. She practically lived out of a suitcase for a year before she realized that it was not the way she wanted to spend her life.
They then decided to return to India. Sangeeta’s mother-in-law could not join them in the U.S. because she had no husband and no source of income, making it impossible for her to procure a visa. This severely irritated Sangeeta and her husband, and prompted their move back to India. Her mother-in-law was then able to move in with them.
Spotting a Gap in the Market
Once back in India, Sangeeta started working with SAP as an ERP consultant. She still had quite a bit of travel. In 2008, she had a baby and purchased an apartment in Bangalore. There was a small group of owners in the apartment complex who had a lot of problems but no clue about the solution. There was no transparency from the builder and he did everything he could to keep the owners from coming together to talk to him. Some of their neighbors started a Yahoo! group to help owners communicate. However, they quickly found it to be inefficient as there was no way of knowing whether you are dealing with an owner or a client.
There are many apartment complexes in Indian metros, but there were no software solutions for managing the various tasks necessary for running a building association efficiently. What was required was an online mini-ERP solution. Venkat took a sabbatical in 2008 to develop the technical solution while Sangeeta continued working at SAP, as it was the only income they had. However, all her evenings and weekends were spent working on the venture.
Within three months, they launched their solution. They contracted a graphics design firm to develop the UI. The owner of the graphic design firm loved it so much that he did a demo of the solution for his high-end apartment complex. The complex went ahead and purchased a subscription for the product. Within two months of launching the site, they had their first paying customer. Their first complex had 300 flats and the fees were 100 rupees per flat, per year.
In 2010, ApartmentADDA had 110 customers and 1.7 million rupees in revenue. By the middle of 2011, Venkat and Sangeeta started drawing a salary and also started focusing on the Mumbai market. They ended 2011 with over 200 customers and had 3.5 million rupees in revenue. Currently, they have offices in Mumbai and Bangalore and have paying customers in 70 cities across India.
On AppartmentADDA, each complex has its own secure adda (Hindi for hangout) into which every resident can log in. It is like the Facebook of apartment complexes with ERP software capabilities. There are around 400,000 apartment complexes in India that fall within their target segment – a long way to go for ApartmentADDA!
Mother-in-Law and Partner in Crime
Sangeeta says she would not have been an entrepreneur without the support of her mother-in-law. She is very efficient and a person who loves owning the kitchen. Right from day one, she took over the kitchen, an arrangement that allowed Sangeeta to keep working and supporting their living expenses while they started their company.
In the truest sense, her mother-in-law and her paycheck from SAP were her venture capitalists.
Both accepting support from your family and in-laws as well as bootstrapping with a pay check are two trends that are definitely worth acknowledging. Bear them in mind!
Have your family or in-laws helped you to launch your startup?
About the guest blogger: Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs reach $1 million in revenue. She blogs at Sramana Mitra On Strategy, and is author of the Entrepreneur Journeys series and Vision India 2020. As an entrepreneur, she ran DAIS, Intarka, and Uuma.
Image credit: David Chow via Flickr.