The ONE mistake I will eliminate in my startup 2.0 - Construction(Tech) - the least digitised driver of the economy

This ONE mistake put us in the club of 1% of the startups which had to shut doors after 5 years of successfully achieving product-market-fit and profitability.?

Behind the scene story of the FAILURE of Backpacker Panda (Startup 1.0)

Backpacker Panda is an emotional bit for me, but I cannot discount the learnings and experiences I gained as 27 years old over the next 6 years. I moved to India in mid-2015 from Berlin to start Backpacker Panda and raised a pre-seed/launch round without thorough due diligence and empirical record check of the incoming first investors. Well, there you have it - as you can tell, the red flags kept piling up as we kept trying to bridge the communication and ignore the red flags with a straight line focus on growth and quality of the product build - hoping that such red flags are temporary. What followed was a display of sheer will, intellect, several amazing investors and co-founders, counsels and an incredible team? coming together to build the largest youth stay chain powered with beautiful in-house technologies built for global scalability.

600,000+ bed nights sold, several million dollars in sales, innumerable people finding love and getting married have now shut its doors. I had failed in doing the thorough due diligence of the incoming first investor which became the ONE mistake that we could not ignore or fix. Alas, a good thing came to an end after 6 years of relentless pursuit of growth!?

Well a new beginning power-packed with all the learnings has started taking shape - Startup2.0: Mad Over Buildings (mob)

My ‘Key experiences’ from the red flags

2016 - Key experience 01 - We secured our first $1.1 million term sheet within 10 months of our launch in 2016 but unfortunately deal was axed by the board without a backup plan or path to survive -

KEY TAKEAWAY for startup 2.0: The board decision making is a two-way format, based on validation of the status-quo understanding, opportunity cost mapping of the present options and reasoning backed with a thorough plan of action and contingency plan.?

Pic 01 - 2015-2016 Backpacker Panda: ?Early days leading to $1.1 million term sheet

2017 - Key experience 02 - Competing company and attempts to poach the property staff and key leadership team -

-> KEY TAKEAWAY for startup 2.0: Well, you may say that the poaching attempt was largely unsuccessful. A result of an inclusive and progressive work environment. Apart from the work environment, a good legal opinion on the investor mandate on a non-compete clause in the Share Holders’ Agreement (SHA) has been an indispensable part of the process now. (DM me if you need an introduction for the SHA of your startup)

2017/18 - Key experience 03 - A second term sheet of $1.4 million after a roller-coaster year went through another board hurdle but closed with multiple bridge investors stepping in to validate the funding -?

-> KEY TAKEAWAY for startup 2.0: Fiduciary duty is well understood by good investors. As a litmus test of the type of decision making investors bring to the table, we now have open discussions with the investors and ask them a series of situational questions - for example how they successfully dealt with their other portfolio company when the cash-to-zero date was within weeks.

2018 - Key experience 04 - First extra-large experiential youth stay in India - Backpacker Panda Colaba, Mumbai (3 mins walk from Gateway of India)- The pivot was not taken in good spirits by all stakeholders -

-> KEY TAKEAWAY for startup 2.0: This has been one of the biggest takeaways that pivots are challenging to communicate and to have everyone on board. Sometimes, it is ok that not everyone can understand or is aligned with the founder/s on the pivot. However, the founder's skill to make ‘Validated Decision*’ and constantly communicate with all the stakeholders and answer their questions is what will keep the ship sailing smoothly while being able to execute the pivot.

*’ Validated Decision’ is where the market fit, economic feasibility, operational process and technology integration has been mapped and can be achieved with the resource on board.?

Pic 02 - 2018 Backpacker Panda Colaba, Mumbai: India’s first extra-large youth stay

2019/20 - Key experience 05 - India’s largest and most luxurious youth stay - Backpacker Panda Rishikesh - post the success of the 'Colaba model' for extra-large youth stay, this property sealed Backpacker Panda’s dominance in the youth stay space only to be outcast due to internal capital structure flaw -

-> KEY TAKEAWAY for startup 2.0: ‘Capital Structure*’ of the company is detrimental to fundraising. Higher founders’ equity in the early stage is crucial which will allow more investments to come in for later round and founders' interests are secured until the company is scaling post the product-market fit has been achieved at scale. *’ Capital Structure’ is the shareholding structure of the company. A good capital structure ensures that all the stakeholders' risk to reward position is secured.?

Pic 03 - 2020 Backpacker Panda Rishikesh: Largest and bespoke youth stay in India

Pandemic - The last blow - the ONE mistake that I have eliminated is to do trust-based diligence only -?

-> KEY TAKEAWAY for startup 2.0: Validate, validate and validate everything and then validate again. Validation reduces the risks and improves the confidence to execute.?

NEXT STAGE

Well, with this ONE mistake, the above series of events took a severe toll on my mental, physical and financial health. I hate giving up - the resolve to continue the path of building meaningful products and experiences is absolute. The key to not giving up is to keep moving forward. No matter what.?

Pic 04 - Deterioration - Before and after: Deterioration of physical and mental health (it reflects in an extreme situation)

MOVING FORWARD - The path to self-recovery with YOGA (It’s true, I am a certified 'Yoga Instructor' now)

After stepping out of Backpacker Panda (early 2021) around the time when pandemic related mental issues were on the rise, I took charge of my mental and physical excellence. I took up Yoga in Rishikesh and completed 500 hours of TTC (Teachers Training Course). (write to me in my ‘dm’ if you are interested in knowing how to get into yoga and if it helps).?

Recovery - Yoga - pic 05: Recovery and excellence

GROWTH - A $1 trillion market problem to solve - STARTUP 2.0 BEGINS - Mad Over Buildings (mob)

The hustle, passion to identify and solve problems, validation process, product building, launch, and growth - I am in love with it. Once I was ready, I did not waste time sulking and decided to capitalise on my last 6 years of learning and start working on solving the next big problem.?

Construction is one of the least digitised sectors and it is going to be a US1 trillion-dollar sector by 2025-26. The unreliability issue of the construction industry has kept me awake innumerable nights while growing Backpacker Panda. Shortly after completing the yoga certification, I started exploring the next startup opportunity on a blank canvas and it was a no-brainer that I must explore and validate this segment. After several months of validation and development we are recharged and ready.?

mob is for architects, interior designers, developers and contractors to help build your home or business. Stay tuned on how mob is going to empower you to build your space... (DM me if you have industry expertise and you want to collaborate to build mob)