If you’re a disruptive innovator who can solve a real problem, have domain and industry experience, coupled with connections in the industry – you’re well on your way to being a successful entrepreneur,
according to Mr. Promod Haque, Senior Partner with Norwest Venture Partners. With over 28 years of experience in the Venture Capital industry, Promod has invested in more than 75 companies over the years and has several accolades under his belt like the Forbes Hall of Fame Investor (2014, 2016), 13 consecutive appearances on the Forbes Midas List, including 2004 when he was ranked as the No. 1 Venture Capitalist, based on the performance of the last decade.
With a background in Engineering (University of Delhi),
Promod spent the early years of his career in Siemens Medical where he learnt to sell medical equipment. In 1972 he moved to the US to study at the Northwestern University, Chicago, Illinois where he completed his masters and Ph.D in Electrical Engineering. He continued in the medical equipment space in companies such as Thorn EMI, which pioneered the CT Scanner. He counts himself blessed to have worked alongside Sir Godfrey Hounsfield, the inventor of the CT Scanner as the Development Director for the first full body scanner in the world.
During this time, Promod enrolled in the Kellogg School of Management at Northwestern University and completed an MBA in Finance and Marketing. He left EMI Medical which had been acquired by Toshiba in the US and GE internationally; and went on to work at a startup which produced a low cost body scanner in California. This was the beginning of his entrepreneurial journey. After the company was sold, he got recruited to go to Minneapolis to be a CEO in the medical equipment space – in three-dimensional imaging.
It was during this phase in his career that Promod felt the company wasn’t growing fast enough and perhaps he wasn’t in the right place. He had been feeling led to start a church and get involved in church planting. Realizing he had no pastoral background or training, Promod studied at a seminary part-time for three years. He recounts, “And then I began to take some courses to look at my skillsets and the pastor showed me that
my skillsets were really not pastoral-oriented but I was more of a business guy.
That led me to actually drop seminary and focus on business. Shortly thereafter I ended up joining the venture capitalist business. “
That’s when he joined Norwest Venture Partners and launched into a very successful career as a venture capitalist. His experience in start-ups as well as large companies helped him in this new venture. Talking about his success, Promod says, “I have to be open and honest, I give God the glory. He is my Lord and has guided me through all the years – in terms of different careers, job opportunities – the ability to find the right companies and invest in that.” He adds that much credit is due to the entrepreneurs of those companies that performed well and made them successful. “It was a combination of factors but I give God the glory.”
So, what goes into being a successful venture capitalist?
The key thing is to be acquainted with the trends in the industry, identify those trends early and fund companies that are innovators. These innovators become the disruptors and finally the successes of tomorrow. Promod believes that successful Venture Capitalists must stay on top of technological developments and keep track of industries.
According to the official Norwest Venture Partners website, Promod focuses on investments across a wide variety of sectors including Systems and IT infrastructure, Healthcare IT, software and services.
“Disruptions are always happening, the biggest one being the invention of the computer which has brought change to so many industries,”
Promod points out. Being able to spot those trends early on is crucial. “All those trends create opportunity for innovation and innovation can be disruptive. Larger companies that are slow to respond to that innovation become obsolete and new companies come up and become leaders.”
What does he look for when he considers partnering with a company? “An entrepreneur who is an innovator, a disruptor,” Promod says. He cautions that the idea must solve a real problem, not a hypothetical one. The idea must have relevance to what is going on in the marketplace, whether it’s telecommunications, mobiles, ecommerce, enterprise or healthcare. The entrepreneur should have experience in that industry. Promod looks for someone who, “understands that industry, comes out of that industry, knows customers in that industry so that he and we can validate the idea before spending time, money and energy building a new product or service.” In a nutshell,
“We are looking for entrepreneurs who are innovative, who have domain experience and industry experience and have contacts in the industry so that they are able to verify the need in the marketplace and if it is solving a real problem or pain point.”
Building a community around your product is the heartbeat of marketing these days. Promod says, “Community building is very different, depending on the industry you are going after.” When a product or service touches consumers (e-commerce, travel etc.), then a business must understand where to reach them for e.g. on the Internet. However the community of telecommunications products will be vastly different – large enterprises like Bharti Airtel, Jio, Reliance, British Telecom, AT&T etc. Reaching the CIOs, Design engineers and CTOs of such large companies will mean attending conferences where people like that gather, once or twice a year.
So, is there one piece of advice he would like to offer to someone starting on an entrepreneurial venture? “Not one, a few!”, he quips. “They must have domain experience. If someone goes out saying they want to build a product for the telecommunications industry but has never worked in the telecom industry, it’s a waste of time. We won’t even talk to that entrepreneur. If he does have experience, we want to see that the founder has a team – initial team – one or two people – one of them knows how to build products, the other has contacts in the marketplace in the telecom industry – so they can validate the product concept.
The last thing you want to do is build something that no one wants – waste of money and time.”
And, of course, it has to be something new in the market. “Ten other companies already exist, already have solutions, you want to be the 11th company that shows up. We would not fund that company, it’s too late.”
The GDP growth rate in India is still pretty high, Promod observes. There are a lot of opportunities for growth in different sectors. “We will see a lot of product companies getting started in India in addition to IT services companies. We’re seeing that already.”
Commenting on leadership, he says, “Leaders must have the right attitude, integrity, honesty, the right domain experience, hire the right people, incent those people so they work hard…model the right kinds of trends and work ethics.” Over the years he’s learnt from other leaders and colleagues and seen that a good leader has “dedication to work, (is) open to feedback/criticism, (has the) ability to collaborate, ability to be mentored, ability to hire correctly, ability to take care of employees.”
As an investor, Promod has struggled with maintaining a work-life balance, he admits. “My wife and kids deserve a lot of the credit as well,” he says when he talks of his success. But he observes that this challenge is unique to entrepreneurs. “When an entrepreneur is first starting a company, it takes a lot of time.
Cash is a premium, there’s very little money, and it becomes difficult to manage the work-life balance.
But I think as the company grows, as they get more cash, more investments, that gives them the ability to hire a few more people, hire some high level managers who can supplement the CEO and founder and so on. So they can be a little more balanced. It also provides them the ability to bring talent into the company – it makes life a little easier.”
Promod integrates his faith in his everyday work by practicing what the Bible teaches. “You have to be honest, you have to have high integrity – you cannot say one thing and do something else, there can’t be corruption and bribery, you have to take care of people, you have to incent them, make sure they are well compensated.” And the road is not always easy. “There have been instances where there have been clashes due to integrity; but God has been faithful. There have been times when I have run into situations, specially when I work here in India, where people needed to be bribed and I would not do that or people wanted to be in the underground economy – cash only – undeclared money that they don’t pay taxes on – I would not take that, take only cheques and so on.
I have run into those situations but God has helped me out, Jesus has been very faithful to me in terms of opening doors and closing doors.”
But being a witness to Jesus in the marketplace means being fair to all employees and respecting the secular environment while trying to live out Kingdom principles like ethics, integrity and being transparent.
“I think when it comes to home, you need the same things – transparency, the need to spend time with your spouse, spend time with your kids and so on. You need to model integrity with them as well.”
Here’s an excerpt of the rapid-fire interview with The Edge.
The Edge: The biggest mistake you’ve made as a businessman?
Promod: There are companies we have funded that I look back and think I wish I had more diligence and I would’ve avoided funding it and saved all the energy and time that went into it.
The Edge: What would you consider as your greatest moment of success?
Promod: We had an investment in a company back in the late 90’s called Cerent Corporation which ended up being acquired by Cisco. The stock went up, Cisco’s stock went up and it was close to a billion and a half gain. Recently I invested in a company in the cyber security space called FireEye and it went public. Those are the companies that you look back on and you laugh because they had tough times, especially FireEye; but the entrepreneur was very strong, we provided more cash to them and eventually they grew to be very successful.
The Edge: What do you do to recharge when you’re feeling drained?
Promod: I would try to get some sleep, that’s important. I spend time reading the Bible, learning from different parts of the Bible. I read daily devotions and those are very inspirational to me and provide me with a lot of strength.
The Edge: One thing you wish you had known when you started out as an entrepreneur?
Promod: One thing about entrepreneurial activity that makes it unique is that you’re starting something that doesn’t exist, so you’re always learning. The key thing is that you have to learn not just from your own mistakes but you also want to learn from other people’s mistakes. Surrounding yourself with board members that have good entrepreneurial experience is very essential. I wish I had done a little more of that in the early days with some of those new companies that I ventured with. I wish I had surrounded myself with more people with entrepreneurial skills because that would’ve benefitted me a lot more.
The Edge: What books or blogs would you recommend every entrepreneur must read?
Promod: It’s difficult to point to one or two blogs, but I think the key thing is to learn from other people’s mistakes not just your own. Surround yourself with board members, advisory members, mentors that have specific knowledge. For e.g. someone who excels in marketing, someone who excels in engineering, someone who is an expert in the industry that you’re focused on. If you surround yourself with those people as advisors and mentors, they might even have some equity in the company, then you can learn from their journeys and mistakes that they have made so you can avoid some of those mistakes. And that’s something we provide as Venture Capitalists. In my lifetime I’ve funded close to 75 different companies and so there are a lot of things that we learn ourselves when we fund these companies. We serve on the board of these companies; we see what works, what doesn’t work. These are things that we can teach young entrepreneurs and share our experience.
Promod looks back on his life and reflects on how God has led him into business. “You know the Bible tells us that God gives different gifts to people – some are called to be preachers, some are called to be teachers, some are called to be administrators, some are called to be givers.
As I look back at my journey as a venture capitalist rather than a pastor, I look at it as my calling.”
He shares that being a venture capitalist enables him to be a giver to Kingdom purposes. Promod and his wife aim to fund various ministries through the wealth that they create.
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