April 2024 | Athera's Odyssey: Uncovering India
April 2024 | Athera's Odyssey: Uncovering India
From how to design a product for 200 million Indians to what Daniel Kahneman can teach us about Indian investing, dive into this month's Odyssey.
In this month’s edition of Athera’s Odyssey, we explore
Portfolio Perspectives: How the BluArmor team designed, prototyped, and built a product that could benefit over 200 million riders.
Athera’s Almanac: Kavya Prudhvi shares her journey so far of making the leap from the world of data science to the deal-making nuances of venture capital.
Ecosystem Stories: Srikanth Meenakshi reflects on the impact of Daniel Kahneman’s insights on his life and how he used to help people build wealth.
Pathways: Three blogs that outline the principles of signalling, genius, and innovation.
Portfolio Perspectives: BluArmor
A near-miss on Bengaluru’s busy streets was the spark behind Athera-backed BluArmor’s latest innovation.
Read on to learn how BluArmor, a shining example of indigenous innovation, built a product that could change how 200 million riders in India commute.
Cracking the Commuter Code
BluArmor first made waves with the C30, a feature-packed intercom system for motorcycle enthusiasts. The success of the C30 among enthusiasts got the team thinking about the needs of a much larger segment - everyday commuters.
While driving to work, a member of the BluArmor team witnessed an instance that would prove to be the inspiration the team was looking for. A distracted scooter rider nearly caused an accident while dropping his child to school. The rider with his phone sandwiched between his ear and shoulder lost control of his bike and just about avoided a collision.
Inspired by the incident, the BluArmor team developed a product that would help commuters use their phones without distractions. But the commuter segment presented a unique challenge - crafting a device that was simple, affordable, and tailored to the specific needs of the Indian rider.
The team's process involved extensive research into user needs, iterating on designs, and carefully selecting components to strike the right balance between performance and affordability.
The result? The HS1 helmet headset.
Designing from the Ground Up
Rather than simply repurposing existing products, BluArmor took a clean-sheet approach with the HS1 helmet headset. The goal was to create a device that seamlessly integrated into the everyday Indian commuter's routine, allowing them to access essential features without compromising safety.
It's an approach that allows them to pack cutting-edge features into the HS1 at a price point that makes it easier for consumers to consider the HS1 as a device of necessity rather than a gadget they would occasionally use. From day zero, the HS1 was designed to be compatible with any kind of helmet widely available in the country.
The HS1 gives the user hands-free access to calls and navigation assistance with built-in noise cancellation. Beyond that, the team has tuned the sound so that users can listen to music without drowning out important traffic and road sounds. To top it all off, all HS1 come built with voice assistant access.
The BluArmor Difference
What sets BluArmor apart is its commitment to designing and manufacturing in India, for India. By keeping everything from design to assembly in-house, they can maintain tight control over quality while keeping costs down.
This approach also allows for rapid iteration and customization, as evidenced by their plans to offer the HS1 to OEMs with modified feature sets. It's a level of agility and adaptability that is rare in the industry.
In a market flooded with imported gadgets, BluArmor wanted to stand out with its commitment to designing and manufacturing in India. By keeping everything in-house, from concept to final assembly, they could maintain an uncompromising focus on quality while staying agile and responsive to market needs. The various verticals within the brand develop technologies and processes in-house for quality tests, regression, and other aspects.
A Philosophy of Accessibility
At the heart of BluArmor's work is a belief in making advanced technologies accessible to all.
Whether it's the C30 bringing premium intercom features to a wider audience or the HS1 packing in previously unseen features at its price point, the company consistently challenges the notion that cutting-edge tech has to be expensive.
This philosophy extends to the ownership experience as well, with a focus on long-term support, regular firmware updates, and designing products that can evolve with the user's needs.
Looking Ahead
With the HS1, BluArmor is poised to make a significant impact on commuter safety and experience. But the company's ambitions don't stop there.
Plans are already underway for a 5-product portfolio catering to different segments and use cases.
What unites these efforts is a commitment to understanding and serving the unique needs of the Indian rider. It's an approach that has served BluArmor well thus far and one that we believe will continue to drive its success.
At Athera, we look for companies that combine deep market insights with technical expertise to solve meaningful problems. BluArmor embodies this ethos, leveraging its understanding of the Indian two-wheeler landscape to design products that make a real difference in people's lives.
As they continue to grow and innovate, we're excited to be a part of their journey and to see the impact they will undoubtedly make on the future of mobility in India.
Athera’s Almanac: Kavya Prudhvi
From Data Science to Deal-Making
I have always had this affinity towards mathematics since I was a kid. Even with an electrical engineering major, I found myself drawn to data and analytics. This interest eventually led me to the offices of Goldman Sachs, where I was part of a small internal team building the nuts and bolts of its consumer lending business in the US for over two years.
I loved understanding the patterns and behaviours of over 10 million consumers through the lens of data. However, after two fulfilling years at Goldman Sachs, I found myself at a crossroads, contemplating the next chapter in my professional life. I wanted to find a path that would help me use pattern-matching skills with the thrill of scaling businesses.
Practically speaking, the options that I contemplated were moving to a startup, going for higher studies or jumping into the coveted world of VC. After months of deliberation, I decided to go after the more coveted world of VC!
The path to the world of VC is, as I discovered, not straightforward. However, Athera Ventures welcomed me with open arms and thus began a transformative odyssey that has redefined my perspective on business, relationships, and personal growth.
The Athera Way
From the moment I stepped into Athera, I was enveloped by a culture that defied the stereotypes of cutthroat competition.
What I have found here is a nurturing ecosystem where mentorship, openness, and humbleness are the defining values. The four partners – Samir, Rutvik, Parag, and Rajiv – embody a rare blend of expertise and humility, always eager to share their knowledge and learn from others.
Samir has taught me the art of patience and the value of thorough due diligence, always emphasizing the importance of depth over speed. Rutvik, a walking encyclopedia, is an astounding example of a mind that never stops learning. Parag's razor-sharp insights about business models across sectors have proven to be extremely helpful when I was faced with the challenges of trying to navigate this VC world. Rajiv, with his years of leadership experience and natural ability to bring in a team culture, has shown me the true essence of building lasting relationships.
Navigating The Surprising Nuances of The VC World
Transitioning from the structured realm of tech to the fluid world of venture capital was like learning a new language.
As a techie, you're often behind a computer, knowing exactly what you're supposed to do and in what order. In VC, however, life is very different. Your days are unpredictable, and you're constantly trying to figure out your next move.
It's not a set plan or structure; instead, you're speaking to as many people as you can – other industry professionals, founders, and peers – to navigate your way through. It is a game of insight arbitrage where you are constantly trying to find the right bit of information to decide where the best founders are, who could be potential LPs, the moves of other funds and other aspects of the ecosystem.
I consider myself a social person, which is why I thought VC would be a good fit. However, the kind of socializing required in this field is very different from what I was used to. It's more professional, and you're judged by everything that comes out of your mouth. This is especially true while speaking to people with more experience which can be intimidating.
Lessons from Life as a Woman in VC
Being the sole female voice in the room has been a recurring theme throughout my journey from college to now in VC. However, in this world of venture capital, this has given me a unique perspective on how the dynamic between founders and investors changes when gender comes into the picture.
I've noticed that male investors tend to build faith more easily with male founders, while female investors often empathize more with female founders due to shared experiences and thought processes. This becomes very crucial when you are in the early stages of fundraising because at such a stage it is all about the people and conviction in the company is based heavily on trust in the founders.
While there are several women at the table today, the ratio is still highly skewed and there is a lot of room for improvement.
Personally, I've found inspiration in female founder and investor communities – a network of passionate and resilient women who uplift and empower each other and provide mentorship and guidance to fellow professionals.
These communities provide a much-needed support system in an industry where female partners are still a rarity.
The Founder-Investor Symbiosis
One of the most profound realizations I've had since joining venture capital is that investors don't have all the answers. We rely heavily on the deep domain expertise and unique insights of the founders we back. Building authentic, trust-based relationships with founders is the cornerstone of early-stage investing.
Through my interactions with extraordinary entrepreneurs, I've developed a deep appreciation for the resilience, ingenuity, and sheer determination that fuels their journey.
I used to think that building a successful startup was as simple as writing a piece of code and selling it. However, I've learned that there's so much more to it – the sacrifice, the grit, and the countless hours of hard work that founders pour into their ventures.
The Path Ahead
Navigating the ever-evolving landscape of venture capital is not easy, but I'm committed to staying true to Athera’s values of humility, curiosity, and continuous growth.
As I continue to crack the VC code, one deal at a time, I'm filled with gratitude for the lessons learned and the support I've received so far. To all the aspiring VCs out there, especially the women: though the world of venture capital may seem daunting at first, know that with perseverance and a willingness to grow, you'll find your place. And remember, you're not alone – a community of trailblazers is ready to support you every step of the way.
Ecosystem Stories & Discoveries with Srikanth Meenakshi
As the world celebrates the legacy of Daniel Kahneman and his groundbreaking contributions to the field of behavioural economics, we had the privilege of exploring his work and its impact on India with Srikanth Meenakshi, the co-founder of PrimeInvestor and formerly co-founder of FundsIndia.
In a wide-ranging conversation, we delve into how Kahneman's insights have not only helped Srikanth become a better person but also how the principles of behavioural finance and economics have been instrumental in building the wealth of millions of Indians.
Srikanth's perspective is unique in the sense that he understands the peculiarities of the Indian investor and how universal principles of human behaviour and decision-making can effectively guide them towards better financial outcomes.
The Best Way To Play Chess (and Invest): Sit On Your Hands
Athera: How has Daniel Kahneman's work on behavioural economics influenced your personal journey?
Srikanth: In hindsight, I think Kahneman's central premise of System 1 vs System 2 thinking has been a cornerstone of what some of my best teachers have taught me. Kahneman's basic premise is that there are two types of thinking: System 1, which is intuitive, impulsive, quick, and survival-mechanistic, and System 2, which is much more deliberative, thoughtful, patient, analytical, and involves careful decision-making.
I learned an important life lesson about this when I used to play chess at the Mikhail Tal Chess Club at the Russian Cultural Center in Chennai.
One of my teachers taught me that to reign in my impulses and force myself to take a second look at my choices by always putting both hands below my thighs before I make a critical move- that is, literally sit on my hands so that it takes some effort, and hence time, to make the move that I am considering.
This resonates with Kahneman's ideas, teaching me that successful investing requires overriding the instincts of System 1 and engaging the deliberate, analytical power of System 2.
A key takeaway from this for me was that equity investing inherently requires System 2 thinking. Investors must consciously cultivate habits that shift them from impulsive System 1 reactions to more deliberate System 2 analyses. Personally, I try to create a ritual around my investment decisions, using a dedicated space, computer and time for focused analysis.
Nudging A Million Users Towards Smarter Investing
Athera: How have these behavioural insights influenced FundsIndia's product design?
Srikanth: At FundsIndia, we leveraged the power of behavioural nudges– subtle design choices that encourage users to make better decisions while maintaining their freedom of choice.
For example, when users create an account, we would automatically set up goal-based portfolios for common objectives like retirement and tax savings. By presenting these options upfront, we nudge users to think about their investments in the context of long-term goals rather than just short-term gains.
This steers them toward sound, research-backed choices while still giving them the flexibility to explore other options if desired. By having them choose to allocate to goal-based portfolios upfront, we create positive downstream effects, like making them think twice before withdrawing those funds for other purposes down the line.
For example, by putting funds into a portfolio designed as a “Retirement Plan” you will hesitate to take it out from there. You could always ignore them and delete these portfolios, but as Kahneman's work has shown, behavioural nudges can be powerful tools for guiding people towards healthy choices across many domains, not just investing.
The key is to make the good choices the default while still allowing users the freedom to make their own decisions.
The Indian Investor Paradox
Athera: Based on your observations, what are some common behavioural biases exhibited by Indian investors?
Srikanth: One striking paradox I've observed is the tendency for Indian investors to oscillate between extremely low-risk and high-risk investments.
On one hand, many investors are easily swayed by triggers like “guaranteed returns" or "risk-free," leading them to make snap decisions - where they use System 1 impulses and not System 2 thinking - without properly weighing the implications. The allure of certainty, even at the cost of low returns, is a powerful bias in the Indian context.
We take a snap System One decision to go towards it without taking a moment to think about where that guarantee is coming from, what is the cost of that guarantee, what are we losing, and if the guarantee is actually true. In many cases, the guarantee is not true.
At the same time, a now-or-never bias drives many investors to chase perceived opportunities out of FOMO, leading to excessive risk-taking in areas like crypto, futures and options trading. The fear of missing out on a potential windfall often overrides rational risk assessment.
I believe this dichotomy often arises from cultural biases and a lack of risk-return calibration across asset classes. Many investors are anchored to conservative choices like fixed deposits, while others are swayed by the promise of quick gains, leading them to take on disproportionate risk. The middle ground of diversified, balanced investing is often neglected.
Building Habits for Deliberate Decision-Making
Athera: How can Indian investors overcome these biases and find that "rational middle path"?
Srikanth: If you go to a person today and ask them why they are not investing in the stock market or mutual funds, a very standard response that you'll get is, “I don't have a Demat account”.
You will seldom hear people say I don't know how to analyze stocks or understand mutual funds. When they talk about starting to invest, they put the procedural aspects of investing first and the knowledge aspect of investing last.
Opening a Demat account, getting your KYC done, and downloading an app are procedural aspects that should be at the end of your investment journey.
The solution for this lies in what I call "Knowledge-First Investing." Building an investment marketplace where learning and deliberate decision-making are the primary principles could be a start.
Athera: Is there a difference between how HNIs and regular people build wealth? Can each group learn from the other in some aspects?
Srikanth: The amount of money that you have, wealth, income, they have nothing to do with how good an investor you are. It is all about your temperament and how you approach the process of investing. I've seen extremely disciplined retail investors and wealthy investors who lack basic investing knowledge.
The key differentiator between seasoned and novice investors is humility. Seasoned investors respect the markets and the role of luck, understanding that even their best-laid plans can go awry, while overconfident novices often underestimate risks.
Pathways
This month in “Pathways”, we’re taking a break from book recommendations. Instead, we have three articles for you- all written with exceptional clarity of thought, each distilling the essence of a hard-to-pin but globally relevant topic in a way that’s immediately accessible and reference-able. We’ve picked the sequence based on how thought-provoking each piece is - but you may choose to read them in any order.
Check out this light read by Julian Lehr, a blog post from March 2020
Julian pitches a different kind of SaaS - in his words, “signalling-as-a-service”. Building on the idea of the social signalling value of say, luxury goods, or effective altruism, Julian explores why there are no “software” equivalents of such physical products and services. The thread of thought seeks to explain the unparalleled value of social networks in amplifying signals en-masse - and how that is at the core of monetization for social media behemoths.
Enjoy this short blog post by the inimitable Paul Graham from 2019, on his “bus ticket theory of genius”
The piece is deceptively short. Without giving too much away, Paul seeks to define (or at least, appreciate) “genius” beyond raw ability and dogged determination. There is a secret, and in his view, a necessary third ingredient: obsession. But the obsession of what nature? Why is it relevant to us? Read on.
End with one of the most quoted “What is Disruptive Innovation?”
Authored by the father of disruption theory Clayton Christensen (along with Michael Raynor and Rory McDonald), this article is from the December 2015 issue of HBR — 20 years after the original piece by Christensen and Bower.
His work on innovation is arguably the most misunderstood and misquoted classics of management literature. There is no better way to put the pertinence of this piece today than how HBR describes it:
…unfortunately, the theory has also been widely misunderstood, and the “disruptive” label has been applied too carelessly anytime a market newcomer shakes up well-established incumbents. In this article, the architect of disruption theory, Clayton M. Christensen, and his coauthors correct some of the misinformation, describe how the thinking on the subject has evolved, and discuss the utility of the theory.
To cut a long story short, a lot of the innovation that we see and admire is perhaps incremental, or radical, but not disruptive - and it is important to understand why making this distinction is practically relevant.