Meet Raj Nanavati, a true force of expertise in the fields of business advisory, consulting, and consumer behaviour. As a mentor and guide, Raj has empowered countless aspiring entrepreneurs to navigate the dynamic and ever-evolving landscape of Canadian and international business. In this insightful interview, we delve into Raj’s remarkable business journey, uncovering the invaluable lessons he has learned along the way. Join us as we explore his insights, strategies, and advice for those ready to embark on their entrepreneurial endeavours in the land of opportunity.


Raj Nanavati Headshot

Tell us About Your Background in Management Consulting and Investments?

Following my MBA, I joined a corporate advisory firm as a management consultant helping leadership teams on strategic issues. It was interesting work, but something was missing. That ‘aha’ moment hit me while reading Warren Buffet’s biography. His observation, “Price is what you pay; value is what you get”, struck a chord. 

I had developed a deep interest in valuation and its critical drivers, and that’s when I realized that my true calling might be in investing. I wanted to combine my skills in consulting and knack for investing and thought Private Equity would be a good fit for me. I found a role with a PE firm, which was the beginning of my journey as a professional investor. Since then, while I’ve moved countries and roles, I’ve remained an active investor in public and private markets. In private markets, I found my sweet spot in early-stage venture capital.


How Was Your Experience in Entrepreneurship, and What Did You Find Most Challenging?

I grew up in Mumbai, India and started off as an entrepreneur there. I ran Lenseco Albums– the leading photo album manufacturing business in the country. It almost seems like another lifetime. For context, this was at a time when photography was still analog – you would print photos and store them in physical albums. We took a lot of pride in the quality of our products and service, catering to a prestigious clientele that included top movie stars, heads of state and names on the Forbes 20 list. 

My experience in entrepreneurship was incredibly enriching, both financially and otherwise. Seeing our ideas come to life, and knowing that so many families were supported through our enterprise was a source of enduring pride and joy then, and something that I will always cherish. However, entrepreneurship is a rollercoaster, and it came with its fair share of challenges. Wearing multiple hats simultaneously became the norm, and at times, it felt like one hat too many. While I enjoyed the perks, it was not all a bed of roses. There’s a song by Queen, that captures well what I and many entrepreneurs have experienced at times: Inside my heart is breakingmy makeup may be flakingbut my smile, still, stays on….because the show must go on….


How Did You Discover Your Passion for Startups and Supporting Entrepreneurs?

It all started back in my childhood when I came across this anonymous saying, “Everything that we see around us today was once just an idea in someone’s mind” Since then, I became a big believer in the power of ideas. I believe that it is the entrepreneurs that take the world forward, through the realization of their ideas. They do this by challenging the status quo, and importantly – putting not only their money, but also their heart and soul, where their mouth is! 

While I was working in Private Equity, and although we were investing in established businesses and not startups, it dawned on me that at the core, our role as investors was to bet on an entrepreneur’s idea and help make it a reality. That’s when my interest in startups was sparked. Fast forward to my time in Australia, where I advised HNIs and investor syndicates on startup investments. Immersed in the startup ecosystem, I interacted with numerous entrepreneurs, reviewed pitches, and witnessed a common struggle—compelling ideas failing to garner investor interest. 

Entrepreneurs started seeking my feedback, which gradually evolved into brainstorming and then advisory sessions. Soon, I found myself consulting them on strategy and investment. And, that’s when I discovered that my mere interest had turned into a passion for startups and supporting the entrepreneurs behind them.


What are Some Upcoming Trends in Consumer Behaviour That You Think Will Explode in Popularity in the Next Few Years?

I prefer looking at broader themes rather than specific trends. Over the past three years, starting with the pandemic and ongoing economic volatility, we’ve collectively experienced some of the most significant changes in our lives. This has led consumers, consciously or not, to question and review their beliefs and values. A dominant theme emerging from this, is a conscious reassessment of what is truly important.

Within this broader theme, the trend of improving health –  not just physical but also mental and spiritual well-being is gaining strength. Another trend that is reaching a tipping point – reduce commuting time. An extension of this theme, if you will, is the divergence of consumer behaviours in paradoxical directions. For instance, consumers are being frugal in some categories while splurging in others. 

Another overarching theme gaining ground is the concept of hybrid and its application in newer areas. From investment products to cars to shopping experiences to work…I’m excited to see where the hybrid concept will find its next mass application. I suspect AI will play a significant role in that.  


What Challenges do you Foresee for Startups in the Coming Years?

The landscape for startups is undergoing a significant transformation, and two key themes stand out: Capital and Competition. March 2022 saw a notable shift in the financial markets –  the conclusion of nearly a generation of near-zero interest rates. Since then, central banks have been increasing interest rates and implementing Quantitative Tightening. 

This confluence has not only made borrowing more expensive but has also altered the unit economics for venture capital (VC) investors. With ‘free-money’ no longer available, equity risk premiums, the extra returns investors demand for taking on equity risk, have surged. The consequence is a more cautious approach from VC firms, as the availability of new capital becomes scarcer. 

In a reversal of sorts- capital, once the hunter, now finds itself being hunted. This shift is redefining the startup ecosystem. Early-stage startups, accustomed to a period where their ideas attracted multiple funding offers, are now seeing investor indifference. Meanwhile, later-stage startups, reliant on successive funding rounds for exponential growth targets, are facing burn money blues. Startups across the board are grappling with the reality that during the cheap money era, similar concepts have already been funded, often by the same investors. Typically, as Competition for customers intensifies, value propositions and product-market fits start weakening, jeopardizing growth plans.

In this new reality, where capital has become scarce and competition plentiful, the overarching challenge for startups is aligning with this new normal. It requires a mental reset—an organizational shift that demands strong leadership and grit. Adapting to the scarcity of capital and heightened competition is no small feat. Yet, in this challenge lies an opportunity. A change in perspective can turn this into a transformative phase. Startups that swiftly realign with the new normal and navigate the next few quarters effectively might actually find themselves in a sweet spot amid weakened competition.


What are Key Factors You Look for When Choosing to Invest in Startups?

It may sound cliche, but the most important for me is the founding team. For team quality, I defer to Buffet’s framework of integrity, intelligence and energy, and in that exact order. Character and competence of the team at the helm are foundational.

Next, the idea itself; because in a way it’s a reflection of the founders. Then comes the business model. It needs to make sense. I acknowledge that it may evolve over time, but I want to see that the founders are thinking deeply about how the business is going to earn profits and not just revenue. 

And then, the market attractiveness. Paraphrasing from Benjamin Graham’s Intelligent Investor: Obvious prospects for physical growth in a market do not translate into obvious profits for investors.


How can Startups Become Investor-Ready?

Early-stage startups are like snowflakes – fragile, and no two are the same. Moreover, investors are also a heterogeneous group, so there’s no one-size-fits-all formula here. It’s highly subjective, with the underlying assumption, and let’s not be naïve about this, that both, the founders and the investor, are committed to extracting value only through the success of the business. 

Hence, to bring clarity to the process, I encourage my clients to think about what kind of investor would be right for their startup at the current stage. Someone who can offer just money? Or do they need money and a partner? Honest answers to this question offer an idea about the type of readiness required. It’s crucial to acknowledge that startup investors operate within a more defined exit timeline, unlike their counterparts in the public markets. 

Using that as a base framework to shape the business strategy can increase the startup’s investor attractiveness. Within this framework, structuring and stress-testing the business model becomes critical. Additionally, refining the positioning and articulating a compelling story can help identify and address potential gaps. 

Finally, consider the flip side- ask whether you as a founder are ready for the investor? The relationship, especially with a significant investor, is akin to having a tenant in your home. If expectations continue to align, it’s fantastic; if not, it could be a daily headache. So, becoming investor-ready isn’t just about your business, it’s also about ensuring compatibility and alignment for a mutually beneficial journey. 


How can Startups Create an Effective Market Expansion Strategy?

Market Expansion Strategy is important for any business. In the case of startups, the ‘effective’ part becomes even more important because of their inherently constrained resources. Numerous cautionary case studies exist of unicorns having lost millions of investor dollars and even risking their existence in ill-considered market expansion endeavours. Hence, startups must think deeply about this before formulating a strategy. 

Let’s dissect this term ‘Market Expansion Strategy’ into its components, starting with ‘Market’. Delving into the fundamental questions—what, how, when, and why—regarding the market is crucial for expansion. While startups often address the what, when, and how adequately, they sometimes neglect the why.  And by this I do not mean the ‘why’ from the startups’s perspective. That’s obvious. I mean the ‘why’ from the market’s perspective. Why should the market care about you? That is a question that demands thoughtful consideration. 

Moving on to ‘Expansion’, which can be broadly classified into four types: Vertical (think products), Horizontal (more about sales), Diagonal (technologically-driven), and concentric (capability-driven). Figure out which one suits your game plan. 

And then there’s ‘Strategy’. Entrepreneurs often favour execution over strategy, an understandable focus for a young business. However, an overemphasis on execution over strategy can become a stumbling block. To borrow from a Japanese proverb: Strategy without execution is a dream; but execution without strategy is a nightmare.  

Effective is, what works. While no strategy can guarantee success, asking the right kind of questions can help in formulating a strategy where the odds are stacked in your favour.


What Should Startups be Researching to Create a Powerful Pitch for International Expansion

When it comes to international expansion, let’s get one thing straight- it’s going to be a different ball game. So, the first order of business is understanding and aligning with the rules of this new game. Depending on the industry and country, the differences may be driven by various tangible factors like political, regulatory or economic. However, a facet that is often underestimated, yet pivotal, is culture. I cannot stress this enough. Culture is an intangible yet omnipresent force that permeates every aspect of society, affecting business conduct. 

Assuming the basic market analysis and USPs are in place, culture is the next big thing to research. It’s the intangible force that can make or break your international gig. Work-life balance, transactional vs. relationship-focused cultures—these things matter, and they vary from country to country. Take China’s guanxi, for instance. It serves as an illustrative example of the latter. 

Second, is competition. One may be a big deal back home, but don’t underestimate the competition on the new turf. CEOs might say they love competition for PR, but I don’t buy it. Millions of years of evolution tell us that as a species we don’t like competition. Hence, when you’re eyeing international expansion, it’s imperative to understand how the game is played through culture and who your opponents are through competitor analysis. It’s like studying the playbook and scouting the competition before a big game—only this game is in the international business arena. It pays to know the field and the players inside out.


Why Did You Decide to Become a Mentor With BHive and TBDC?

To echo Winston Churchill’s sentiment, “ We make a living by what we get, but we make a life by what we give”.  I’ve always believed in making a difference through contributing to the ecosystem. My mentoring journey began in the Australian startup ecosystem out of passion. That journey continued when I moved back to Mumbai, and mentored at Rise Mumbai, which is a Barclays-backed accelerator. 

Fast forward to Toronto, and I found myself drawn to the startup ecosystem here. I was inspired by the initiatives of TBDC and later BHive, under the leadership of Vik Khurana, to energize the Canadian startup ecosystem. So, when I was offered to mentor at TBDC & Bhive, I accepted with enthusiasm.  


What is Your Advice to Entrepreneurs Looking to Come to Canada?

Welcome! Canada as a whole, is a very welcoming place, except at times, its weather! I believe that the tone of an economic environment is set by the government through its policies. And in that, Canada is doing it right. It’s setting a welcoming and inclusive tone for entrepreneurs, which is creating multiple tailwinds. These currents are likely to propel it into a higher economic orbit in the coming decade; naturally creating conditions for the phenomenon of ‘rising tides lift all boats’. 

Moreover, Canada has an increasingly multicultural and importantly, educated immigrant population. Historically, that signals huge opportunities in creating and capturing new and untapped niche market segments. Further, I would encourage entrepreneurs to look at Canada, not just for its own market, but also as a base from where they can have easier access to the expansive US and Latin American markets. Finally, a tip about the work culture. Politeness and relationships are big here. If you’re used to quick transactions, you might need to adjust. Patience is key; take the time to build those relationships. It’s a bit different, but it works.


Grow with BHive

We hope you enjoyed this interview with the incredible Raj Nanavati, and that his insights and wisdom will stick with you as you navigate the unpredictable waters of entrepreneurship. We are excited to have such esteemed mentors in the BHive community, and we extend our gratitude to Raj for sharing his time and expertise with us. If you’re eager to connect with Raj and other fantastic mentors, check out the Global Entrepreneur Incubation Program offered exclusively through the BHive. Together, we can continue to learn and grow as a community of innovative and forward-thinking leaders.