Sramana Mitra’s life mission is to help you earn a million dollars.
An established Silicon Valley entrepreneur, Sramana discovered her life’s mission while recovering from a life-threatening surgery.
“As I was recovering from that, I kind of sat there thinking: ‘What if I just died? What is my legacy?’”
Her solution? Create the world’s FIRST global virtual accelerator — One Million by One Million — and help one million entrepreneurs hit $1 Million in revenue, creating a trillion dollars in global GDP and ten million jobs in the process.
“We are trying to create fortune in the middle of the pyramid. We do not believe that excess is a requirement for success.”
On today’s episode of Fierce Feminine Leadership, Sramana joins me to discuss:
- The one key trait you need to build a successful business.
- What “unicorn businesses” are and why you need to stop chasing them.
- The formula you can use to build your profitable business.
- Why 99% of venture capital deals are rejected.
- And MUCH more.
Sramana’s experience and insights shine brightly in this interview. Listen in to learn from a woman who has dedicated her life to helping entrepreneurs and businesses reach their true potential.
Listen here: http://bit.ly/2rKeCHT
Full Podcast Transcript
Eleanor Beaton: You are listening to Fierce Feminine Leadership EP #269 with Silicon Valley tech entrepreneur Sramana Mitra.
Voice Over: Welcome to Fierce Feminine Leadership: The Success Podcast for Women in Business. Each week we feature interviews and advice to help you step into your power and lead your way. Now here’s your host women’s leadership expert Eleanor Beaton
Eleanor Beaton: Hello there fierce ones, Eleanor Beaton here. And welcome back to another episode of a Fierce Feminine Leadership: The Success Podcast for Ambitious Women in Business. This is episode #269 and I am fired up about this one, fierce ones. So listen in. We’re talking about why we need to stop chasing unicorns.
So, for those of you who know the real meaning of a unicorn, which is of course that horse that actually exists with the beautiful horn. My childhood dream was to just see a real life unicorn. In fact, I remember going for walks in the woods behind my house and I would close my eyes and then open my eyes and hope that there would be a unicorn in my path. Not sure if any of you guys did that but that was a big thing for me back in the day.
But of course now, the term unicorn is used to apply to a company. So this is a privately held company that is worth more than one billion dollars. Okay? So privately held companies that are worth more than one billion dollars. This is what Silicon Valley investors and venture capitalists, this is their dream. This is what they’re looking for, and this is why they pour so much money down the toilet.
One of the most colossal wastes of the modern world is the amount of money that venture capitalists spend on companies that are going to go nowhere, because they’re looking for that unicorn. It’s a huge waste of money that’s happening day after day after day.
And I can remember, it was a couple of years ago, talking to this entrepreneur who was serving the women’s market and had received a lot of funding. A lot of venture capital to start up this business. And it’s so funny because this is my market and I knew that the idea wasn’t going to fly because I knew the market. It was, I just knew it. And it was so interesting seeing all this money that was being poured into a company that ultimately went nowhere when the company had to close down operations because, as I predicted, the market just wasn’t there for it. The market had already gone way beyond what this person was offering, the technology that she was creating.
But it just serves to show that, when it comes to building businesses, there are a huge number of businesses out there that are doing 500000, a million, a few million, 10 million dollars per year, that are seen as too small for venture capitalists to invest in, but are actually hiring people, making a meaningful contribution, and these are the businesses that my guest today, Sramana Mitra, is most focused on supporting.
So she is the founder of One Million by One Million, which is a global virtual accelerator that helps to help that aims to help one million entrepreneurs globally to reach a million in revenue and beyond. She’s a Silicon Valley entrepreneur and strategy consultant. She writes the blog Sramana Mitra on Strategy, is the author of the Entrepreneur Journeys book series and Vision India 2020. As an entrepreneur CEO she ran three companies, DAIS, Intarka and Uuma. Sramana has a master’s degree in electrical engineering and computer science from MIT. And today she is our guest on Fierce Feminine Leadership. Here we go. Sramana Mitra, welcome to Fierce Feminine Leadership.
Sramana Mitra: Thank you. It’s great to be here.
Eleanor Beaton: So I’m really looking forward to sharing with our audience more about you. I’d like to get started. Tell us a little bit about what you do today.
Sramana Mitra: Well I run One Million by One Million which is the first and only global virtual accelerator for startups. We work with technology and technology enabled services companies. And our mission is to help a million entrepreneurs reach a million dollars and beyond in annual revenue, build a trillion dollars in global GDP and help create ten million jobs.
Eleanor Beaton: Ok. So those are big numbers and I cannot wait to dive in. But I’d like to get started by going back to the beginning. So could you tell us a little bit about where you come from, your upbringing, your childhood? I’d love to hear the path that brought you to where you are today.
Sramana Mitra: Sure. Today I’m based out of Silicon Valley. Absolutely at the heart of Silicon Valley, right off Sand Hill Road where all the venture capital of the world is concentrated.
But my journey begins in Calcutta, India, which is a very large very, very congested, very polluted place. An old city in India, it used to be the capital of British India at one time. And that’s where I grew up in a very large, old family. We used to live in one household with about 50 people in one kind of homestead, where 25 were family members and another 25 staff. So it’s a very different upbringing than what most of you would probably have experienced, but it is a classic old Indian extended family setup. So it was complex, it was interesting, very interesting, at times very much fun because there were a lot of kids to play with.
But it was also very complicated, because it was also in India… you know my upbringing is the 70s and the 80s, which is not the modern India. It was pre-liberalization India. And there was a lot of complex stuff going on, including a lot of chauvinistic stuff, a lot of things that I didn’t necessarily agree with, but I did have a feminist father, so that helped because he really encouraged me to pursue my dreams and helped me actualize my talents.
Eleanor Beaton: Now, when you look back on that upbringing. I can just imagine this big, bustling household. Lots of personalities, lots of things going on. When you look back on that upbringing, what would you say were some of the chief qualities that it forged in you that have helped you in your success as a businesswoman?
I think it was survival and resilience, probably, are some of the major factors that came out of it. It was very political. There was actually a fair bit of abuse as well. Psychological abuse, physical abuse, which all of it you had to survive. And without the help of adults to some extent. So it was a very tough upbringing on some level.
Eleanor Beaton: And of course resilience, it’s the it’s the key success factor.
Sramana Mitra: Resilience is the main factor.
Eleanor Beaton: Exactly. So tell us, how did you get from Calcutta to Menlo Park.
Sramana Mitra: Well, I decided to leave India in 1989 to come to college. I went to Smith College, actually closer to use them to me at this point in Northampton, Massachusetts. And I did my undergraduate in computer science and economics at Smith. I got myself a good scholarship and had a really, really great experience at Smith College. And then I went to MIT. I published my bachelor’s thesis at Smith in computer science and attracted the attention of MIT’s admissions process and later my advisor, Professor Anant Agarwal who today heads edX, which is one of the great platforms for online learning.
So I went to MIT for my grad school. I was in the Ph.D. program, I didn’t complete the Ph.D. I took my masters and I’d already started a company while I was still a graduate student, so I went on to do that full time. My career directly aligns with the beginning of the internet. So in 1994, Netscape goes public. That is considered a milestone event in the commercial internet and the birth and the development of the commercial Internet.
So I started a company in 94. I left MIT 95 with a master’s, and then one after another I did three startups in a row as founder CEO till the end of the decade. And then the dot com market crashed.
I had moved to Silicon Valley at the end of 96. It was a very tough environment. When we look back on that period after the dot com crash we call it the nuclear winter of the 2000s. So at that point I was both very tired and the market was not great, so I started consulting for a few years. I would say a decade of consulting, but also by 2005 I started writing seriously. I started my blog. I started writing for Forbes. I had a column on Forbes by 2008. And then I wrote a bunch of books. 2010 is when I launched One Million by One Million.
Eleanor Beaton: Now, what prompted you to start One Million by One Million? There were a lot of choices that you had at this stage. You’ve successfully founded multiple startups, you have been successful as a consultant, as a writer, as a leader. What prompted you to start One Million by One Million with its big, hairy audacious agenda?
Sramana Mitra: Two things. In 2009, just a few months before I announced on my 2010 new years resolution that I was going to start One Million by One Million, I had a major surgery. And it was a life threatening surgery and as I was recovering from that, I kind of sat there thinking: ‘What if I just died? What is my legacy?’ And I wanted to do something that was worthy of a legacy. So, it just organically came to me. And what came to me is really what is at the heart of One Million by One Million.
I had by this point, I had been on all sides of the equation. I’d been an entrepreneur,CEO, I’d consulted, I’ve been on the venture capital side of the equation having done tons of due diligence for VCs, etc. I had lots of contacts in the industry. One thing that was clear to me that over 99 percent of the deals of the companies of the entrepreneurs who go and seek financing actually get rejected.
Eleanor Beaton: Over 99 percent?
Sramana Mitra: Over 99 percent.
Eleanor Beaton: Those poor souls.
It’s for good reason, because the venture capital model demands two key parameters in your business that have to be present for VCs to consider you fundable. Those are hyper-fast growth. You have to go from zero to hundred million dollars in annual revenue in seven years.
And the other is very large TAM, Total Available Market. So you’re talking about a very large, billion, multibillion dollar market opportunity. You’re talking about a very fast growth business, hyper-growth business. Neither of those are commonly found characteristics in businesses. So as a result, most companies don’t fit those parameters. Most companies do not deliver to those requirements. Even after getting venture capital funding, actually a lot of companies do not deliver. Only one out of 10 companies that do get venture financing actually succeed to some degree.
So it’s a very strange probability game. And I thought, well, you know, there are tons of companies that I know, because I’ve been writing now for a while at this point. I know tons of companies that build a linear-growth, steady, sustainable, profitable, $5 million, $10 million, $50 million dollar businesses and I consider them a success. So why is everybody chasing venture capital and considering if they failed to raise venture capital, why do they consider that a failure? It’s not a failure, you can build a business in many other ways. Venture capital is an optional tool of building a business.
So that’s what drew me to do something that is completely underserved in the market. All accelerators, all incubators, all accelerators are acting as feeders into the venture capital ecosystem. We don’t. We do work with VCs. We have great relationships with investors and we cater to those companies that “become fundable”. But we also support huge numbers of companies and entrepreneurs who are not fundable, who are or should not be raising money, but should be building businesses, profitable businesses, and we help them as well. And that was the inclusive vision of entrepreneurship that drove One Million by One Million.
Eleanor Beaton: And it’s fascinating to me, because it’s so true that the idea of a company that has successfully been able to score VC, that you’re able to be one of those hyper -growth companies, scaling to $100 million in 7 years. Simply by virtue of trying to fit into those parameters, so few businesses do, that it’s almost as though we’re setting up the vast majority of businesses to be failures when we look at it through that lens.
Sramana Mitra: It’s complete nonsense.
Eleanor Beaton: So, this idea of One Million by One Million in Silicon Valley, that I suspect is potentially controversial. It’s a totally different way of thinking, because one million feels like a very doable, democratic target.
Sramana Mitra: It’s not just in Silicon Valley that it’s controversial. It’s also controversial in other geographies. In India, for example, where we have a very big following, I happen to be very controversial because in India, again, the market is dominated by this VC myth that has been exploded from Silicon Valley. And people don’t like the fact that I’m calling something out, which is akin to the Emperor Has No Clothes. Because there are very few venture-fundable companies coming out of India. And there are hardly any exits. So, it’s not just in Silicon Valley that it’s controversial. It’s controversial period.
Eleanor Beaton: Now, there’s a few things that I want to ask you about One Million by One Million. But I would like to focus for a moment on this idea of challenging the system, of coming out with a controversial opinion, of presenting an alternative framework. How difficult was it for you to do that, to to be a dissenting voice inside the established system?
Sramana Mitra: So, it takes very very long to establish and promote a descent point, a point that is controversial and counter to the grain of society. And especially, in our case, the entire entrepreneurship media kind of sings the VC tune. They’re all reporting on funding announcements and if you don’t have funding announcements, people will not cover you. So we have actually become the B media outlet where companies that are not subscribing to the raising gobs of VC money and announcing big VC announcements all the time type of businesses, come for coverage.
We operate heavily with case studies. So now you get a view into how I’ve done it. I didn’t just say it myself. I continuously published case studies of successful entrepreneurs and I provided all sides of successful entrepreneurship. We have case studies of companies that have built unicorn ventures. We have over 800 case studies out of which 50+ are unicorn companies. But within unicorn we have provided case studies of unicorns that are venture funded unicrons, but we’ve also provided unicorns that are bootstrapped unicorn.
So if you look at my billion dollar unicorns book, that has a section called bootstrapped unicorns, which you will find in no other unicorn discussion anywhere in the world.
Eleanor Beaton: And to clarify for people who don’t know what unicorns are, perhaps you could define it.
Sramana Mitra: Sure, absolutely. Unicorns are a billion dollar market cap companies. So one of my favorites case studies in the billion dollar Unicorn’s bootstrapped section is Zoho. That is a company that is approaching a billion dollars in revenue, not just valuation. If you’re valuing the company in an open market it would be well above 10 billion in market cap and this is a company that has never raised any outside financing.
Eleanor Beaton: Unbelievable.
Absolutely. So we did have those. We then also covered, in the case studies, we covered 400+ venture funded companies, which is kind of the traditional way people are building businesses. And then recovered over 350 bootstrap companies that are not necessarily unicorns, but they are good, solid, viable companies and they range from $5 million, $10 million, $20 million, $50 million, $100 million -any number of different revenue perimeters. But by all means, these are successful companies at those scales. And I personally, I don’t know if you received my newsletter, but I just wrote in the newsletter today that I interviewed a company called Emtrain recently, and it’s a female entrepreneur who’s built a $5 million dollar a year company. And when I was interviewing her she was apologizing. And I said: ‘Why are you apologizing for building a five million dollar company?’ What kind of a society have we built where somebody who was building 5 million dollars a year profitable company has to apologize? As far as I’m concerned this is a success.
Eleanor Beaton: It is quite a state we’re in if what it takes to build that, given that just a small percentage of companies – period – crack the seven figure mark in sales, that we have people successful entrepreneurs apologizing for employing people, for creating great revenue. It’s crazy.
Sramana Mitra: I think $500,000 a year is success a million dollars a year is success, $2 million dollars a year is a success. This is because all of those are really difficult to do. So building a business is very difficult to do, building a profitable business is very difficult to do. And whatever scale people are comfortable doing it at and are successful doing it that needs to be celebrated. So our philosophy is, exactly as you pointed out, democratizing entrepreneurship, education, incubation, acceleration and we are trying to create fortune in the middle of the pyramid. We do not believe that access is a requirement for success.
Eleanor Beaton: Creating fortune in the middle of the pyramid, I love that. Now, you mentioned earlier that your career has really been built alongside the rise of the internet. You’ve been in Silicon Valley since 1994. What are some of the key changes you’ve seen in Silicon Valley in particular, over that time especially with respect to how we view entrepreneurs and entrepreneurship?
Sramana Mitra: Well, you know in the early days entrepreneurship was not as cool and as pervasive. Entrepreneurs were a rare breed. People still prefered having jobs and secure jobs and so forth. That has changed completely. Nowadays entrepreneurship is very cool. And in certain geographies, even in Silicon Valley for sure, but even Silicon Valley has exported thus elsewhere, entrepreneurs say or people say it’s easier to get a date if you’re an entrepreneur. It definitely was not the case when I started, it was definitely long the case. We were much fewer in number. But in a way that’s a good thing. Taking the stigma to failure. Entrepreneurship has risks obviously, so a lot of people fail. That’s a good thing that in Silicon Valley failure is not considered a big problem. That is one of the biggest trends of Silicon Valley. So the more entrepreneurs are circulating, right now we have about 600, 700 micro VCs that operate in the seed capital ecosystem, which is before VCs come in, before the major VCs come in. And the institutional milestone is Series A financing.
So let’s say, if you have 600, 700 micro VCs operating in seed, we are talking about 100,000 seed financings a year. But the number of people who actually get venture financing is still only 1,200 to 1,500 and that number has not really changed very much. So there is a big gap between seed and Series A, where a lot of people are falling through that gap. Now, my take on this gap is that you need to basically take what you’ve built and if you don’t qualify for venture capital, so what? Go build a real company with real revenues, real customers, real profits and that’s also a success. But that’s where the difference kicks in between real entrepreneurs and pseudo entrepreneurs. There’s a certain kind of entrepreneurs who are entrepreneurs only if they can get funding. Otherwise they don’t have the tenacity or the resilience to actually build something.
Eleanor Beaton: That’s a great point. You know go build a real company, with real customers. I mean, it’s it’s amazing how cash is queen. That ability to find customers, just sell your product, to build it up, to hire your team without infusions of cash that can really obscure the realness of your company.
Now you’ve talked about in your blog, one of the themes that you’ve discussed this about is how tech is becoming an oligarchy. What did you mean by that? And what does that mean for entrepreneurs?
Sramana Mitra: So in certain corners of the technology universe, a few companies have enormous power. If you look at Facebook and social media, Google and search, Apple, Microsoft and Amazon and e-commerce, these are five companies that have an unprecedented level of market clout and market power right now. For a variety of reasons. And as a result they are in online advertising, for instance, both mobile and Web. Facebook and Google basically control the market. There’s very little left for the rest of the market. They are by far the biggest market shareholders.
I think these are becoming markets where it’s very difficult for smaller players to play. If you look at Amazon, any commerce for example, all the large categories Amazon plays, so if you’re an e-commerce company and you’re starting to get some traction in the category you have to watch your back, when is Amazon going to enter the category and put us out of business? So this creates huge problems for smaller companies. And the dynamism, the startup industry dynamism, the startup dynamic, gets tempered in situations like this.
There are other parts of the technology industry that are not like this. For example the cloud software, the service infrastructure, the services, the whole of what we call cloud computing industry, is not like that. It has many, many significant sized players, many, many mid-sized players, just like there are billion dollar companies, many billion dollar companies, there are many hundred million dollar companies there are many 50 million other companies. It’s a much more dynamic, much more democratic system where it’s still possible to compete and not get squashed completely right away by somebody who has so much market clout that you can’t you don’t stand a chance.
Eleanor Beaton: So, are you recommending potentially more oversight or regulation of these “oligarchs”?
Sramana Mitra: I think so. I think at some point we’re going to come to the conclusion that some of these businesses need to be broken out, maybe split up like Amazon has e-commerce. It has e-commerce that is a retail e-commerce, it has Amazon marketplaces, which is you know many of their buyers and sellers transacting, an ebay kind of model, and they also have their Cloud business. They have the whole Alexa stuff. So there’s a lot of different businesses that could be separated out. Same applies for Google. For example, Google has a lot of very diverse businesses that don’t necessarily need to be all together to build this massive conglomerate. So I think those questions have come up in tech earlier when Microsoft became very powerful and kind of like a monopoly. Microsoft monopoly did not last because of the internet. The internet came about and created a lot of other companies and Microsoft for a while became you know a fast follower. It was not the dominant player. Microsoft has revived itself to a very dominant player now, again. So these are not questions that are unfamiliar to the tech industry. We’ll see how it plays out.
Eleanor Beaton: One of the things that I’m curious about and to change gears here a little bit. You have kind of an active day job where you are building One Million by One Million, but one of the things that really sticks out about you is the depth of thought, the reasoning and the degree to which you are thinking about things, theorizing. How do you, in the course of a busy career with all the day to day demands, I would love to hear more about how you make time and feed that intellectual ingredient. How you make time to sit and think, to think about what’s going on and to analyze the trends. What kind of habits you have in place to do that? Because I know that a lot of women are interested and want to do more of it, but sometimes in your day job it can feel like, God, I just don’t have time for this. What kind of practices do you have in place to choose a thought leader?
Sramana Mitra: I, as you know, I read a lot and I write a lot. So it’s one of the easiest ways for me to process something that I read that captured my attention. For example, one of the sources that is my influence source is the Economist magazine, which I think they do a fabulous job of dealing with big issues in depth.
Eleanor Beaton: It’s my favorite magazine. I’ve signed a subscription for years, it’s great.
Sramana Mitra: So I would say, frankly I was introduced to the habit of reading the Economist back in college because my second major was economics and Professor Roger Kaufman, I remember still, said that you should start reading the Economist. So I started reading The Economist and I kept up that habit all along and I find that as one of the major trigger points for broader issues. And the show that I watch on television regularly religiously is, Fareed Zakaria’s GPS. I think he does a fabulous job of thinking about really deep issues. So those are two external sources that I use quite extensively.
And then the other thing that I’ve done, which I also encourage you all to do, is surround yourselves with smart people who are deep thinkers. So you know, I’m not a young, youthful pup at this point. I’ve been around. So I have very, very deep network and I’m very snobbish about who I spend time with. I spend time with people who can be additive to my process of thinking and advancing my thought process and so forth. And this is not just in the domain of technology and business. I also lead a literary group. I love literature and I think literature, philosophy, life, society, these are topics of great interest to me.
Maybe one day I will have time to write something that is in the realm of literary fiction but I have’t got there, I don’t have time to do that right now, but I do nurture that passion and I think literature is very insightful. If you have that passion for literature, you will look at technology and business probably a bit differently and more holistically than the single minded, nerdy mindset, of I need to make the maximum money. And whatever the hell be the consequences of that.
Eleanor Beaton: I think this idea of broad influence is so powerful when it comes to thinking deeply and also becoming more skilled at expressing your ideas. And I love the very practical advice. Reading publications that are going to give you a broad view of what’s happening in the world. I too have subscribed to The Economist for years. What I love about it is that, when you pick up the newspaper, you read a lot of news and information that is not necessarily helpful. When you read The Economist, all of those articles can be extremely helpful in terms of helping to inform a world view. And then also of course this idea of, it doesn’t have to be just work related. Broaden that scope with literature, with music. It’s almost like stepping back into a renaissance type education.
Sramana Mitra: Yeah. This is the philosophy of liberal arts education in America, right? I went to a liberal arts college. I did go to Smith College, so I did not go to technology school or technical school for undergraduate.
So I think that’s a good thing. The other point that I would make is, multicultural and international viewpoints. I think, given what is going on in America today, there is a shrinkage of thought, of intellectual thought and that’s terrible. When I arrived in 1989 at Washburn House, which was the dorm I lived in for four years at Smith College, it was a small New England house where 40 of us lived. And these were women from all over the world. There were international students from Morocco, from Ghana, definitely from India, from China, from Vietnam.
And it was fascinating as a young 18 year old, to have that kind of immersive multicultural experience, and that has never left me. It is ingrained in who I am and the friends circle that I have built, that I feel the most comfortable with, is that kind of an intellectual, multicultural environment. I don’t feel very comfortable in ethnically homogeneous environments.
Eleanor Beaton: I so agree. It’s really part, again, of what can help to create that deep thinking. It’s been such a pleasure having you with us on the show. Thank you so much for joining us.
Sramana Mitra: My pleasure. Thank you for having me.
Voice Over: Fierce Feminine Leadership is executive produced and hosted by Eleanor Beaton. Technical producer is Kate Astrakhan. Content producers are Adrianne Alexander and Marie Hanifen. Special thanks to Kelly Filman and Amy Bleser. Find Eleanor on LinkedIn, Twitter and Instagram @ Eleanor Beaton. Thank you for listening. Stay fierce.