Good Capital fuelled our growth story. Be a part of it!

April 22, 2021

It was a pleasant October morning in 2015, and a bunch of newly hired techies were seated on the terrace of a colonial-era building near Ulsoor Lake. A young and dynamic COO was in front of them, explaining the fundamentals of doing a viable business, as part of the induction session. After giving a humble introduction he started off showing a rough sketch on the whiteboard –

“Imagine there’s a funnel in which you input something, it does some magic within and gives an output which is more than the input. If you input Rs 100 in it, it does some processing and gives out Rs 101. This is called Profitability. 

Then, you put another 100 and it again gives you 101. This is called Repeatability. 


Then you put 1000 and it gives you 1010 & you again put 10,000 and it gives you back 10,100. This is called Scalability. 

A viable business needs to be profitable, repeatable and scalable when you pump gasoline in it.”

A million-dollar piece of advice was given to the folks whose brain deciphered the first two premises as ‘If-Then-Else’ problems & the third one as a ‘For Loop’ problem. Nevertheless, the point was made.

In order to achieve profitability & repeatability, a business needs to discover its Profit Formula. To achieve scale, it has to discover its Growth Formula. The discovery of each one of them is a function of time and capital. Some businesses invest huge capital and discover their Growth Formula first before they start seeking profit. On the other hand, some businesses invest, operate and pivot until they discover their Profit Formula before they start chasing growth. There is no right or wrong. It’s just that both of them are governed by time & capital as two limited resources and in the pursuit of discoveries, businesses may start falling short of one or both of them.

In Professor Amar Bhide’s book, ‘Origin and Evolution of New Business’ he reveals – “93% of all companies that ultimately become successful had to abandon their original strategy – because the original plan proved not to be viable.” Until the winning strategy becomes clear, the capital needs to be patient for growth and impatient for profits. But once a viable strategy is found, the capital should become impatient for growth and patient for profit. And when a profitable and viable funnel is discovered – success would depend on scaling out this model. Such capital, which knows to apply patience when required, is termed as ‘Good Capital’. 

Five years down the line, the terrace of that colonial-era building is vacant but the spirit is filled to the brim, just like the perennial Ulsoor Lake. In the last five years, the terrace has witnessed numerous all-hands, in which the obsession for profitability always steered the path ahead. Had it not been for the side-effects of the pandemic last year, the terrace would have witnessed another all-hands, where the passion for growth took over the baton. By the end of that tumultuous year, the funnel was poured with ‘Good Capital’ to fuel the passion for Growth. Today, with no charm lost, several living rooms, bedrooms, studies and balconies still witness the drive of each elated spirit proud to be part of this transition.

With A91 Partners funding our growth story, we call you to join Exotel and drive growth in multiple functions – Tech, Product, Sales, Marketing & Operations.

References: ‘A Theory of Good and Bad Capital’ from the book ‘How Will You Measure Your Life’ by Clayton Christensen, James Allworth & Karen Dillon.

Avnish Gupta
Written By
Avnish is a product management practitioner at Exotel. As an evangelist of first-principle thinking, he spends his time reading business, product & design books. He finds solace in poetry and storytelling, and aspires to write a bestseller someday!

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