Tag: Startups

  • Founder lessons from the classroom

    Founder lessons from the classroom

    I was interviewing a student from VIT Bhopal for an internship. Somewhere in the conversation, she mentioned a course called Technology Entrepreneurship. I asked her to show me the syllabus.

    It read like a list of things I wish someone had told me three decades back.

    I finished my engineering degree knowing electronics and how to write code. I did not know how to read a balance sheet. A profit and loss statement made no sense to me either. Taxation was worse. So I read what books I could find and worked it out as I went. There was no other way to run a company. I have written about this in my book, The Founder Catalyst.

    What stayed with me was not the mistakes I made while catching up. It was the time it took. Every hour I spent understanding the numbers was an hour I did not spend on the product. I was an engineer who wanted to solve problems, and a good part of my energy went into things nobody had taught me.

    Her syllabus talks about customers and whether they really want what you are building. It talks about protecting what you build. It talks about money, about incubators and government support, and about selling across borders. I learnt each of these the hard way.

    A large client once came to us because of a small tool we had built. They were using it in ways I had never imagined. About twenty years ago, we built a content management system for news and media companies. We charged a licence fee on top of our services. The market did not like it. We ended up giving the system away as part of the service. I found out what customers would pay for only after the product was built.

    My first product was EasyPass, a shareware security tool that found buyers in over fifty countries. One of my early collaborators took a copy of the code and began selling it as his own. I learnt of it only afterwards. No one had taught me anything about intellectual property before that day.

    Around 2007, I expanded into the US and the UK at the same time, and I borrowed to do it. Growth came before the reserves. It was a close call. Today’s founders step into a far more supportive ecosystem than the one I began in. Incubators, angel networks and government schemes exist now. That support helps only a founder who knows about it.

    Let me be fair to the classroom. It is not the field. Forty-five hours of lectures cannot teach what a first customer saying no will teach. Students will still learn the hardest parts by doing them. But there is a difference between meeting these ideas cold and meeting them as old acquaintances.

    These are the engineers who will join your teams over the next few years. A college like VIT Bhopal now teaches this in a full semester course. They will arrive with cash flow, customers, patents and markets already in their vocabulary. I expect the questions in your review meetings to get better.

    Founders have something to offer here. Internships and mentoring hours give students the practice a lecture hall cannot. I head the mentoring programme at TiE Chennai. We see young startups welcoming the initiative and finding it useful. I suspect students would feel the same.

    An engineer’s attention is the scarcest thing a young company has. I spent a good part of mine catching up on basics. If a classroom can spare the next generation that effort, they can put it into the problems they care about. I learnt these words by making mistakes. They will learn the words first, and spend their mistakes on harder problems.

  • A Lesson for Founders Who’ve Been Cheated

    A Lesson for Founders Who’ve Been Cheated

    I watched a short video of Frank Abagnale recently. It stayed with me longer than I expected. 

    (Video attached at the end)

    Frank Abagnale is best known as the real-life inspiration behind the movie “Catch Me If You Can“, played by Leonardo DiCaprio. But this two-minute clip has nothing to do with glamour or clever cons. It is about a quiet, painful reality that many founders face but rarely talk about.

    Every business owner, at some point, encounters theft or fraud from within.

    An employee lies. Someone manipulates accounts. Company assets quietly disappear.

    In a large organisation, this is absorbed by process. HR steps in. Finance handles it. Lawyers do their work. The founder signs papers and moves on.

    In a startup, it is very different.

    A small theft can be fatal. Cash flow is thin. Margins are fragile. More than the money, the emotional damage is deep. Almost every founder I have met who has gone through this carries that pain for years. The feeling of being cheated. The sense of having trusted the wrong person. The embarrassment of feeling foolish. This does not fade easily.

    In the video, Frank Abagnale talks about a pattern he sees almost every day. Small business owners write to him after an employee steals money. They do everything “right”. Police complaint. Court case. Trial. Depositions. And after years, they get nothing back. No restitution. Just exhaustion.

    His advice, in the US context, is pragmatic and slightly ruthless. He suggests using the tax system. Since stolen money is considered taxable income in the US, he advises filing a 1099 with the IRS. This gives the victim a tax write-off and puts the burden on the offender through the tax authorities, who have far more power than a criminal court in recovering money.

    This specific solution does not apply to most of the world. Certainly not in India. So I am not suggesting founders copy this approach.

    What struck me was the lesson beneath the advice.

    To me, the real message of the video is not about the IRS. It is about how a founder should respond after being cheated.

    • First, acknowledge the fraud honestly. No denial. No rationalising. No self-blame. Accept that it happened.
    • Second, fix the system, not the past. Put processes in place so it does not happen again. Separation of duties. Basic controls. Regular reviews. This is unglamorous work, but essential.
    • Third, stop obsessing over punishment. This is the hardest part. Wanting justice is natural. Wanting revenge is human. But chasing punishment rarely brings the money back. Worse, it steals your most valuable asset. Your time and mental energy. Time that should be spent rebuilding the business and creating future income.
    • Fourth, be brutally realistic and move on. Some losses will never be recovered. Accepting this is not weakness. It is survival.

    Frank Abagnale delivers this lesson calmly, without drama. That is what makes it powerful.

    So, thank you Mr Frank Abagnale, for a lesson many founders learn only after it hurts deeply.

    Sometimes, wisdom is not about winning. It is about knowing when to stop bleeding and start walking forward again.

    This strategy is from Frank Abagnale’s 2013 talk for Nevada State Bank. While US tax law does treat stolen funds as taxable income, using it as a recovery tool is a legal “gray area” and is shared here as a strategic insight, not formal advice. Consult a professional before application.

    Here’s the video:

    Short summary of the video transcript:

    Frank Abagnale explains that many small business owners write to him after employees steal money. They pursue police cases and court trials, but usually recover nothing. He says that in the US, stolen money is taxable income, so filing a 1099 with the IRS allows the victim to claim a tax deduction and shifts enforcement to the tax authorities, who have stronger powers than criminal courts. He believes the threat of tax consequences is often more effective than sending someone to jail.

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