PK Clean featured in Indian Express

During our recent pilot plant trip in Pune, PK Clean was interviewed by the Indian Express. The PK Clean team is now busy working in California at Lightspeed's offices on Sand Hill Road. Come find us today at the Cleantech Open National Investor Conference!

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PK Clean in Boston Herald

On Tuesday, the Massachusetts Institute of Technology narrowed a field of 25 entrants to finalists in four other categories:

 • Clean non-renewables — PK Clean of Cambridge, which has developed a patented process to transform plastic waste into fuel oil...

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Winning Business Plan Competitions

The past few weeks have been an eventful time for PK Clean, with our
team competing in our first two business plan competitions, and
already winning 4 awards. Although I have been involved with PK Clean
for over two years now, I was initially reluctant to enter these
competitions as I feared it would distract from our main operational
goals of fully testing the technology and building our pilot plant. In
hindsight, I am glad we focused on the technical and operational
aspects first, because without a functioning pilot plant our pitches
would have less substance and be mere speculation.

Business plan competitions are not simply about the prize money
(although non-dilutive funding always helps!) but offer many
advantages: networking with mentors and judges, finding passionate
teammates, challenging your business model assumptions, practicing
your investor pitch and giving your business and team momentum. The PK
Clean team is vast at this point - it is not only the efforts of our
MIT student team, but our extremely supportive mentors and advisors,
our dedicated team on the ground in India and years of hard work from
our original inventor, Percy Kean. Being an entrepreneur is filled
with endless ups and downs, and simple wins at a business plan
competition can help encourage everyone on the team to keep working
hard despite the inevitable setbacks.

In addition to dedicating these wins to my immensely supportive
family, our extremely hard working India team and Percy Kean, I would
like to acknowledge the help and inputs of many advisors and
classmates to our team: Avi Goldberg (co-Founder Great Point Energy),
Bill Davis (co-Founder Ze-Gen), Bill Aulet (MIT Entrepreneurship
Center Director), Tod Hynes (co-Founder XL Hybrids), Vanessa Green
(OnChip Power), Ani Vallabhaneni (Sanergy), Kiran Divvela (MIT), Avi
Yaar (TechStars), Alex Loijos (LinkCycle), Prithvi Reddy (MIT), Sudeep
Tandon (MIT), my marvelous Comm Professor Virginia Healey-Tangney,
among many many others have sacrificed their time to offer their help
and expertise. The pictures below are some of Arjun and I presenting
PK Clean at Rice (Rice hosts the largest Business Plan competition in
the world, with > 500 entrants globally and a max of 2 entries allowed
per school - they fortunately made an exception and allowed 3 from MIT
this year). PK Clean won Best Energy Plan and came in 3rd across all
categories - we will be featured in Fortune on May 9, so lookout for
more updates from our team. PK Clean thanks you for your support in
helping bring our technology to market!

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entrepreneur@MIT

The entrepreneurial ecosystem at MIT is incredible, and I believe there are few better places to grow as an entrepreneur. Many Sloan classmates, like me, work on their start-ups alongside taking a full load of classes and extracurriculars. Sounds like a demanding schedule? I won’t lie, it is, but the fantastic thing is that every class and extracurricular directly helps you become a better entrepreneur.

For the benefit of aspiring entrepreneurs in the prospective, incoming and existing MIT community, I’ve compiled the following list of “Best of” entrepreneurship at MIT. These are a culmination of my best experiences at MIT in my first year, and I’m grateful that so many of the lessons learned from here are things which I already incorporate into running PK Clean every day.

Emerging entrepreneurs need hands-on skills, mentors, idea exchange, industry exposure, and a rich community. MIT offers all these things and more:

SKILLS

I was drawn to MIT since Sloan, unlike most leading business schools, has a very hands-on and extremely applied curriculum. Between Labs, E&I classes, SIPs, IAP workshops, you have an entrepreneurial smorgasbord at your fingertips:

IAP: IAP is Independent Activities Period, which takes place in January before the semester begins in February. There are some great entrepreneurship classes, including the The Nuts and Bolts of Business Plans, which is a great way to get a head start for the Business Plan competitions in Spring. I took the class this past January, and as it’s an evening class you can balance the class while working for a full-time externship during the day.

SIP: SIP is Sloan Innovation Period, which is one week in the middle of the semester where instead of taking regular classes you register for short workshops. Many of these are related to entrepreneurship, and this past year I took several helpful and practical SIPs including IP Strategy, Women and Entrepreneurship, and even one on designing employee contracts.

Classes: Since Sloan allows you to choose electives for 3 out of your 4 semesters, you can take full advantage of Sloan’s best classes for entrepreneurs such as New Enterprises, Technology Sales, Early Stage Capital, Managing in Adversity, and ventures classes such as Media Ventures (collaboration with Media Lab) and Energy Ventures (energy-focus). These are all classes I either took this past semester or am registered for this upcoming semester, and all come highly recommended.

Labs: Sloan offers several “Lab” classes where you work on a project for a real-world company. For entrepreneurs, G-Lab offers the opportunity to work with a start-up globally, whereas E-Lab allows students to do this locally. I’ll be taking one of these Lab’s next semester, and would also recommend iTeams, which is an opportunity to work on a commercialization strategy for a promising MIT technology out of a lab. I worked on this great water technology.

MENTORS

You can find a lot of great mentors on-campus through faculty, E&I staff, and the E-Center’s Entrepreneur-in-Residence program. There are also formal mentoring programs through MIT’s Venture Mentoring Service and through competitions such as the 100K and Clean Energy Prize. Various clubs also have their own mentorship programs – this year I had two mentor’s through MIT’s Energy Club.

IDEA EXCHANGE

Some fellow 2011 classmates really enhanced the idea flow at MIT this year with Erdin Beshimov and Rob Lemis founding MIT’s Entrepreneurship Review and Adam Blake, Morgan Blake and Slava Menn founding IdeaStorm. I highly recommend students getting involved with both – I’ve both pitched and moderated at IdeaStorm and gained a lot of insights. There are also events fostering idea exchange hosted by the E-Club and TechLink on-campus, as well as many interest groups in the area which host some great idea exchanging events such as WebInno, PEHub and TiE throughout the year depending on your interests. I’ve been involved with or attended events hosted by each of these groups throughout the past year, and they’re all great forums to keep on your radar.

INDUSTRY EXPOSURE

As great as the MIT campus bubble is, entrepreneurs also need to be constantly engaged with “the real world” and networking with people across industries. One great way to do this is through conferences. Some of MIT’s best conferences which I was part of this year include the MIT Energy Conference and Venture Capital Conference, and there are also many great non-MIT conferences which you can attend as a student volunteer such as the Cleantech Forum Boston and others depending on your area of interest. The VC/PE Club also offers great events for entrepreneurs, and the treks are a fabulous way to get out into the real world. Another great opportunity is MIT’s Externship program - I worked at a VC in Boston and learned a tremendous amount about how investors evaluate entrepreneurs and the ins-and-outs of funding. Other local groups with events to look out for are the MIT Club and MIT Forum.

COMMUNITY

If all these forums haven’t already given you a sense of how strong the community around entrepreneurship is at MIT, Sloan students can also be part of the Entrepreneurship & Innovation Track during their 2 years. The track entails an introductory course in the Fall, which familiarizes students with entrepreneurial resources on campus such as The Licensing Office and Legatum Center, and includes a weekly dinner speaker series. The highlight of the program is the Silicon Valley Trek in early January, where all the E&I students bond closely. Finally, depending on your area of interest – whether it be media, development, energy or anything else – there is a Sloan community for you. For instance, I’m on the board of Sloan’s Energy & Environment Club, focused on entrepreneurial events. I have also been interested in creating a closer community of women entrepreneur's on campus during my time here, and together with classmate Erica Dhawan we're putting together a Women Entrepreneurship Seminar for the Fall - I'm sure more on this in future posts!

Venture Capital in India: Waiting for Exits

India has a thriving entrepreneurial culture, high-single digits growth, strong talent, and is flush with money ready to put to work. Shouldn’t this naturally make it a venture capitalists’ heaven? Not necessarily.

The Playing Field

Venture Capital in India is still at a very nascent stage. The industry consists of roughly half a dozen active firms – most of which are U.S. based. The firms we met included Helion, DFJ, Accel, and I also separately met with Nexus. There are other firms we didn’t get to such as Sequoia, Canaan, and IDG Ventures (the latter which was interestingly co-founded by a Sloanie). Some other firms are present – but invest at a much later stage than pure venture – firms like Bessemer, Battery, Norwest and Matrix. Venture Capital has been around in India for a while, but roughly 10 years ago it morphed into PE. Various players such as ICICI Venture and Carlyle realized that with so much cash, PE was a much better model for them, so switched their strategy. The latest pure VCs to crop up have only done so in the past couple of years.

Are there Exits?

Since the firms have only been around for a few years, VC is still not a proven model in India. Until India gets its 20x’s, the main question on the lips of every firm we met with was ‘are there exits?’  This year should be an interesting year since there are about 100 IPOs lined up, including a sizeable number which are VC funded. However, until some major headline exits happen, VC lacks the reputation and still remains an unproven model in India.

Growth Garbed as Venture

Given its early stage as an industry, the VC happening in India tends to be more risk averse than traditional VC. There are still inhibitions around backing very young companies, so VCs prefer companies which are cash flow positive and use more PE-type criteria in evaluating companies - leading one firm to describe investments as “growth garbed as venture”. While this may be a less risky approach, on the flip-side, this also lowers the return potential. Since Indian VC investments tend to be oriented towards service companies rather than technology companies, while less capital is required and less risk is involved (since they don’t have to prove the technologies), there is also no exponential hockey stick growth that comes with tech plays. Service businesses are instead an execution play, and the time it takes to build out the business is a slower and more gradual process – which makes it tough to ensure that exits take place within a suitable horizon which is shorter than the 10-year fund life.

Where are the Angels?

There is still not much of an angel landscape in India – there are 2-3 well-known angels, but even these have a mixed reputation. However, fortunately the “friends & family” investing sphere is very significant – not surprising given India’s rich heritage of family-owned businesses. Hence, usually there is no trouble in getting early investments of around $100k to $200k. The only active VC making serious investments under $1 million is Accel, with the others mostly staying in the $2m - $10m investment range. Anything greater than $10m becomes very competitive, with companies with revenues to warrant large investment sizes automatically becoming hot property, sending valuations through the roof.

Sectors: Searching for Scalability

Most of the funds we spoke with had a sector agnostic view to their investments. The general theme we heard was there is rarely IP or new ideas coming out of India, and most start-ups are merely replicating and adapting foreign ideas for the Indian context. The one exception to this is mobile, where India is leading trends internationally largely because of the unique set of regulatory and socioeconomic conditions pushing this sector in India. Areas such as internet are still struggling in India, since it is hard to monetize websites if there is no E-commerce. E-commerce is still yet to take off in India since it requires logistics both through distribution and online payment, which are not yet in place. Cleantech is also a relatively new area, with only DFJ and Nexus seriously focusing on it, with some others starting to look at the space more closely. Generally the mantra on everyone’s lips when considering investments was ‘scalability’.

Where does this leave the Entrepreneur?

Interestingly, we heard that 95% of entrepreneurs in India are first-time entrepreneurs. Historically, businesses spawned out of family enterprises, so there was never a need for external funds, but now a new set of professionals is emerging. Other than the regular requisites of having a passion and stomach for start-ups, entrepreneurs in India also need to have a much longer time horizon. In the west, it is sometimes common to think in terms of a 3-4 year time horizon when make a decision to found a start-up, however we in India 10 rather than 5 years is the magic number.

So is it better to be an entrepreneur or investor in India? Chances are that in the early years at least, investors will get hurt more than entrepreneurs. It will take a few stellar exits to prove the model, but when it is proven, it could be the beginning of a very exciting era for Indian business.