Ritesh Agarwal was 19 when he launched an online marketplace for budget hotels branded as OyoRooms. From his vantage point, Agarwal was certain that only professionals from the hospitality industry could help him make a success of his venture.
So he bounced the idea off Vinod Sood, the company’s adviser. “I initially thought industry people would be smarter, execute better, but he (Sood) said it doesn’t mean anything. If you get smart talented, people – even if not from the industry – it’s good as their learning curve will be sharp and without any burden,” says Agarwal, now 21. Struck by that perspective offered by Sood, the managing director and founding member of US-based Hughes Systique which provides software R&D services, Agarwal went on to hire senior managers from sectors as diverse as consulting and technology.
The Oyo Rooms founder is one of several entrepreneurs who are beginning to see value in advisery boards peopled with experts who have not just experience but also knowledge of diverse sectors. In June, Flipkart announced the formation of a four-member advisery board to help manage and direct growth at the sevenyear-old company’s ecommerce platform. It roped in Unilever executive Sudhir Sitapati as the first member of this board, followed by its Chief Technology Officer Amod Malviya, who was moved to an advisery role in the company.
These advisers bring diverse, radical, on-the-ground thinking and act as thinktanks or trouble-shooters for entrepreneurs. Typically, advisers or advisery boards comprise people with diverse backgrounds and no commercial interest or financial stakes in the company they advise.
“Advisery board members that have no vested interest in the company can speak their minds,” said Ganesh Rengaswamy, managing director at Accion’s Frontier, mentor to startups and former venture adviser at Unitus Seed Fund. “Founders can also let their guard down and confide in them with regard to challenges and finding the right solution.” This indeed was the first qualifier for Vishal Bali, cofounder and chairman of Medwell Ventures, when the specialized home health care services company formed its six-member advisery board at inception in March last year. “Only then you become rational and practical and be net-neutral with advice all the time,” said Bali. Despite having a high-profile board of directors from the medical and healthcare fraternity as well as founders of the same pedigree, Bali and team were sure they needed an outside-in perspective while creating the business.
“Typically with enterprises that are created by individuals who’ve spent a long time in the industry, you get narrowed down in thinking,” said Bali. He shared an instance of what he called “new blue sky thinking” by advisers. When the founders were still debating whether Medwell should be a specialized or a generic company, K Jayshankar, who is on the startup’s advisery board, correlated the evolution of the pharmaceutical and nutraceutical world when specialty generics came up, suggesting that the industry was headed towards specialization. “Some of us wanted to look at the bigger piece, but he said stay focused, though it may take more time, and helped crystallize our thought process,” said Bali. Jayshankar is the managing director of Empowered Learning Systems, which focuses on consulting, coaching, training and organisation processes.
Similarly, Sahil Dharia, managing director of Soothe Healthcare, the makers of affordable sanitary napkin brand Paree, was of the assumption that he needed to spend heavily on advertising to amplify the company’s presence. A few sessions in front of a whiteboard with the company’s adviser Anil Gupta challenged his thinking, and Paree increased its retail reach by another 1,000 stores quickly without much additional spending.
“It’s an essential consumer product. Why do you need to always have advertisements to be present?” Dharia recalls Gupta questioning him and offering suggestions on an asset-light deployment model to improve sales velocity. Today, Paree is sold in 3,000 stores in Maharashtra and Kerala, and the threeyear-old company is preparing to enter another region shortly.
“That’s the beauty of having a guy who thinks laterally,” said Dharia, who in June brought Gupta, former president and head of Reliance Infrastructure, on board as an adviser to tap his expertise and network to achieve his larger goal of being present in four million stores and becoming a $100-million company in five years. “We are a David versus Goliath story – two multinational corporations dominate the space and we need big guns to get this scale, fast and quickly,” said Dharia, aiming to capture a significant share of India’s Rs 4,000-crore sanitary napkin market.
Advisers, therefore, by virtue of their engagement are counsellors or life coaches as well, conditioning entrepreneurs with long-term thinking while simultaneously working them back to the present-day situations and challenges. “In a startup everyone gets high on a startup drink. If you have one or two ideas you’re in love with, you forget that there could be other options,” said Jayshankar.
Synergising a company’s board with an advisery board is crucial. For this, experts say, the maturity of individuals sitting on both sides of the table is important in order to run two parallel tracks to optimise intellectual capabilities. It is also crucial to evolve the advisery board as the company grows. “At preinflection and post-inflection points, you need different people as advisers,” said Rengaswamy.