An Interaction With Subroto Bagchi!

An Interaction With Subroto Bagchi!


5 min read

Yesterday I had the privilege to attend a Q&A Session of Shri Subroto Bagchi at O-Hub, Bhubaneswar organized by Startup Odisha.

He’s widely acclaimed for co-founding the IT giant MindTree & spearheading skill development initiatives through Odisha Skill Development Authority & authoring numerous bestselling books.

His public appearances in press meets during the COVID-19 lockdown period, made him a house known face across the Odisha state. The video clip below belongs to the session of the portion of my interaction with him, followed by a transcript:


Sir! I would like to know your perspective on the popular debate of bootstrapped startup Vs the funded startup?

In the current game of the unicorns the government is promoting them, so how do you see this ?

Because money being a key thing for somebody starting and especially when we are not backed by Rich parents. So how do you see that?

Subroto Bagchi:

I don't know about rich parents. I didn't have Rich parents. But I didn't understand your question. Can you just make it very simple?


This FY22 Zerodha registered a Profit of ₹2,094 Crore versus there are companies who are going IPO making losses.

I have read in your books that it's all about money and entrepreneurs should be profit seeking. So who should be our role models going forward?

Subroto Bagchi:

I think you have to be your own role model! That's what it is!

You talked about being bootstrapped versus being funded. That was a key part of your question.

So back to the first discussion about definition of a startup, you should as long as you can and as much as you, you should be bootstrapped.

Future investors will always value, if you're bootstrapped. They want to know do you have the skin in the game or are you just eyeing my money!

However you need to know that point where you will be perceived as valuable to somebody else because that is where you'll actually get the capital to become big.

Now I must give you my personal example. So my first startup was a failure. My first startup was at the age of 28. I co-founded a company called Project 21 with two older friends and I'm talking about 1985.

Between the two of them they brought in ₹20,000, whatever that value is at that point and it was agreed that I will put in Sweat equity. In 1985 Banks would not give loan to a tech company, as the word didn't exist. So computer company!

People didn't know the difference between a hardware and a software! The company closed down after three years because of lack of working capital.

It had business, but you can't run a company purely on raising the invoice, getting the money, taking care of your expenses & setting aside money for future growth. So working capital was a challenge.

The company got closed down in three years. Now it is a very valuable lesson for me because realize that you need a critical mass of capital. But whose capital?

So when MindTree started, it was conceived in 1998 and we actually launched the company in 1999. There were 10 co-founders.

Before we met the Venture Capitalists, we first liquidated our Provident Fund money and our gratuity money, my personal total Savings and a little bit of stock options that I had in the company I was serving amounted to about ₹56 Lakhs or so.

So between the 10 of us we produced you know, whatever I don't exactly remember the total money. But we said that we are betting our life savings on the table. Now here's a business plan & a business idea. Would you like to come and invest? When you do that, then the angel investors or the VCs take you more seriously.

I find a lot of people who say I need five crores rupees to start a business. Now in today's world if you can't cough up that money from your close surroundings and if you are not able to pledge some piece of your property to raise that money, then it is very difficult that an angel will say you are really worth it!

So bootstrap as much as you can. Show that, you are putting your Blood, Sweat and Tears in a visible manner. People will take you a lot more seriously.

But at that inflection point, you have to decide whether you want to be a boutique organization, where you want to have total control or do you want to scale? There's nothing wrong in being a boutique organization.

Some of the best companies in the world are tiny cute companies & not everybody needs to scale. But if you need to scale you can't bootstrap and hang in there for too long as well.

Because if you don't bring in capital you won't be able to first of all attract good talent. Secondly, you won't be able to invest money in acquiring customers.

So you need to actually be very careful about the timing, so that you have a vertical takeoff. Right? Think of yourself as an aircraft. At some point in time you have to do a vertical takeoff.

So bootstrapping is good, if you think that control is important and scale is not important. Bootstrapping with your money as much as you can is critical. People are not here to blow their money on you. Nobody comes with a guarantee micro coded or barcoded here saying that you know you are going to succeed!

So, it's a show of confidence to say that you know I have liquidated all my money I have. Actually here is my life's savings and there's point of no return for me.

Don't compare yourselves with people who have gone IPO and stuff like that. Because that comparison will not help.

So back to your question you have to be your own role model.