In Conversation With Tonmoy Shingal

In 2010, Ketan Kapoor and Tonmoy Shingal founded Mettl, an online assessment SaaS platform. Their vision and idea? Help companies make better hiring decisions. 

From the seed of that idea, Mettl grew, offering complete solutions for companies to track and measure the aptitude as well as technical and psychometric skills of potential and existing employees. We were investors in Mettl and successfully exited last year, making it a win-win for all stakeholders.

I have known Tonmoy for almost a decade, and I have seen him progress from an eager entrepreneur to a mature founder. Having been a part of Mettl’s stupendous growth over the years, I was curious to know his thoughts on his journey as a founder. I sat down with him for a free-ranging conversation over coffee, and we spoke on first-time entrepreneurship, the role of venture capitalists, and more.

Excerpts from the discussion:

“The right investors can make our journey smoother”

There are many nuances to being a first-time entrepreneur, right from starting your own company as a very small garage set-up to going through the journey and being 400-people strong at the time of exit. On this journey, we made many mistakes but also learned so much more, and in the process did a few things right too. Building an enterprise from scratch is a big thing. It requires multiple people, apart from the founders, to pitch in with their expertise and experience. 

I think this is where the right investor can make a significant difference. In the case of Kalaari, having been founders themselves, they could make our journey smoother because they too have been there before. There are a lot of junctures in the entrepreneurial journey where decisiveness is required, and having the right investors helps us understand what will work and what won’t.

“VCs are also in the risk-taking business”

When we were raising money for our Series A round, I remember a number of VC firms would say, “Iska data le ke aao, uska data leke aao.” 

Ours is not a well-tracked industry in terms of market research and market size, and we struggled with producing that data. But with Kalaari, we found that data didn’t matter. 

It didn’t matter if the market size was $500M or $50M as long as the broad points were checked, and we were addressing a need in the market. That’s when I realized that VCs are also in the risk-taking business and not in the risk-averse business.

In Kalaari, we found someone who dared to take risks. I remember this time in 2014 when we were about to run out of the Series A capital raised in 2012. Our deal structure was that we immediately get to raise $2M. Then, we could call for $1M whenever we needed the money. I raised the $2M and also ended up calling for the $1M. However, later, Kalaari added another $1M because we weren’t doing too well. 

Any other investor would have tried to negotiate or would have said the company is not doing well now. Why should I put more money now? But Kalaari backed us! That last financial injection helped us refocus and turned the company around. Within one year, we became profitable, and we haven’t looked back since then.

“Value additions from VCs helped us scale and build a better framework”

Investors who have prior entrepreneurship experience can add a lot of value in a big way. Such investors may not always have the right answers. But they can trigger the right concerns and conversations, and help with the right decision-making framework. There were two huge value additions that Kalaari brought to the table. One, Kalaari really believed in our product and the company. We were struggling as other VCs found it difficult to take the plunge without the necessary data. But Kalaari instantly recognized that there is a need for our products and went ahead with us.

Two, Kalaari gave us the right prompts and triggered the right concerns and conversations to help us form the right decision-making framework. 

Often, Kalaari acted as a counterbalancing force by asking the right questions. For instance, when we had the financial resources to hire for only one position, Kalaari asked us some leading questions like, “How do you want the company to be run? And going by that, do you want to hire a CTO or a Head of Sales?” 

These questions came at a time when we were wavering from our path, helping us scale and build a better framework.

“Setting the right goals and targets”

Kalaari had very high expectations from us! Usually, an entrepreneur is quite happy with 50% growth. But Kalaari pushed us beyond this mental barrier by asking us: “Why just 50%? Why not 500%?”

That was unexpected! It was something that made us dream bigger. 

From this push, we learnt how to set the right goals, expectations, and accountability.

I will give an example. At one point, we were given the goal of achieving 4x growth. It seemed completely unachievable! Yet, the year ended with us achieving 2x growth. We fell way short of the target, but I am sure if our target had been only achieving 2x growth, probably we would have achieved only 1.5x growth! 

“Build the right communication framework”

We have had some great conversations with Kalaari, but there were times when the conversations were unpleasant too. 

However, looking back, I can say these conversations happened in the best interest of everyone concerned. There were a couple of times where we couldn’t execute with the speed and precision that Kalaari expected from us. But with time, we realized that was what was required because as soon as we achieved it, we saw results. In this context, the right communication framework helped us. 

“Exits can be painful”

For founders, their company is, understandably, like a baby. Almost all founders avoid the ‘e’ word as much as possible because it’s painful to even think of parting with something that they have invested so much of themselves in. There’s a lot of emotion at play as they are always focused on how to grow and scale. 

Kalaari was instrumental in getting the discussion started and pushing us to think about an exit strategy. Like any other founder, I resisted, thinking it was not time yet. But later, my team and I realized that it was logical, practical, and beneficial to the company. There really is no best time. You simply have to aim for a good valuation and a win for all stakeholders.

A founder’s advice to venture capitalists

There are a few perspectives that I would love to share as a founder to venture capitalists:

1. It would be great if there are more board meetings! With Mettl, in the beginning, our investors perceived there was more need; they were more hands-on, especially when we were still maturing as a company. Later on, when we became a successful company, the engagement was more formal and less frequent. But it would have helped to have that same continuous involvement and mentoring even then. It helps when someone pushes us to keep the foot on the accelerator constantly. 
2. Kalaari provided us with a very high-quality management bandwidth. I wanted more of that bandwidth for my own personal and professional focus. Probably as a sounding board for both professional and personal issues.
3. An exit requires so many factors to be in place before it actually happens. Just as there are different services that help a startup like legal or compliance, it will help to have a separate arm that focuses solely on the entire exit process from start to finish. It could concentrate on formulating exit strategies, potential buyers, and other management aspects.
4. Even if sometimes entrepreneurs resist advice, my experience is that if someone is authentic, respectful, and consistent in giving feedback, it can influence the founder’s course of thinking. Not enough investors take the time to really build a deep relationship and give that in-depth feedback. If you are authentic, I believe that entrepreneurs will listen. 
5. Show that you understand and respect the journey that founders go through and the emotional and personal toll it takes. Investors want to be heard, and so do founders. But instead of discussing, there might be blame games and finger-pointing, which can be avoided with honest communication. 

The learnings from the entrepreneurial journey

During the last eight years of my journey with Mettl, I have grown a little smarter! If I were to do Mettl again, I could be confident of getting the same outcome within 3-4 years rather than the eight years it took. That’s because our ability to remain focused on the right things, channel money into areas that are most meaningful for the business, and take correct, even if expensive, decisions, have all vastly improved during this time. 

Here are a few points that I can highlight as my key takeaways:

1. Choosing the right market - A sizeable market, amounting to approximately to $200M or $400M, is required for tech startups to be meaningful. 
2. Choosing the right co-founders - Apart from sharing skills and expertise, co-founders have to depend on and trust each other completely through the entire startup journey. What you need is someone who is steadfast and can support you through the good as well as the bad.
3. Ability to find solutions - As founders, we were expected to make decisions in all areas, including technology, product, and hiring where we are not the experts. In such cases, I rely on first principles to make decisions. This means if you can’t understand something, then actively question every assumption and then create new knowledge and solutions from scratch. 
4. Focusing on the primary intent - In the course of a startup’s journey, it’s very easy to get sidetracked and lose yourself in solving multiple problems that might not be ultimately customer-focused. It helps to periodically ask yourself, ‘Whose problem are we solving?’ And if the answer does not include the customer in it, then you know you have to correct yourself.

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Parts of this discussion have been edited for flow and clarity.

Disclaimer: Views represented in this blog are personal and belong solely to the author and do not represent the views of Kstart or Kalaari.