Wish for tech winter to last longer: Peak XV’s Shailendra Singh

This article is based on a fireside chat with Shailendra Singh, managing partner at Peak XV Partners, at Tech in Asia Conference 2023. Watch the full video of the session above.

Much has been said about the current funding winter, but very few see it as a “gift” to the global tech ecosystem. That’s exactly what Shailendra Singh called it while speaking at this year’s Tech in Asia Conference.

In fact, the Peak XV Partners managing director wished for this period to last longer. “I know you don’t want to hear that, nobody wants to hear that,” he said, adding that while it’s hard for companies to access outside capital right now, “in nine other ways, [the tech winter] is a great time.”

Singh, a seasoned investor who has led Peak XV (previously known as Sequoia Capital India and Southeast Asia) to invest with more than 400 tech firms so far, said the current climate forces the startup ecosystem to let go of its bad habits.

The 1% mindset

One such bad habit, Singh highlighted, is smaller companies trying to grow quickly by chasing “vanity” metrics like unicorn status.

In trying to speed up growth, businesses tend to be more open to making trade-offs, and these often lead to a lack of focus and lower standards. This also puts companies in a position to make shorter-term decisions.

Only “the ‘1% type’ of company will sustain for decades,” Singh says.

Here, he is referring to a study on all ‌public companies throughout 1990 to 2018. It found that roughly all of the net wealth generated by public companies came from just around the top 1% of them.

He found that startups with this 1% mindset are often those that make long-term decisions, those that will send ripples through their industry decades ahead. He urges founders to develop this mindset by building for the next 20 to 30 years.

This is despite the possibility that investors may not stick around for a long period after an IPO, something Singh has noticed a lot in India and Southeast Asia. That said, one decade is typically too short of a time to be invested in a company, he noted.

Peak XV’s Shailendra Singh on stage during this year’s Tech in Asia Conference / Photo credit: Tech in Asia

A lot of businesses that use their first decade of operations to lay the foundation for the years ahead are those that tend to do “extraordinarily well” in the following decade.

“I’m currently on three boards, which are 12 and a half years, 13 and a half years, and 14 and a half years. So, in many cases, I will stay well beyond a decade,” Singh said. “We will try to help founders think, act long-term, and build enduring companies.”

Customer-first focus