Before proving it to your customers you have to prove the value of your product to your employees, partners and vendors, writes Rahul Joshi After working in a corporate job for close to 12 years I decided to chase the entrepreneur dream hoping to build on the ideas that I and my partners had in mind. It’s been around four years since then and I have been part of a few ventures spread across multiple domains. To briefly sum it up, it is by no means a walk in the park running your own business. You would be hard pressed to find an entrepreneur who says it was easy. For first timers who get into it after being in a job the very first thing that you realize is that there is no such thing as a regular monthly paycheck. However you do worry about ensuring your employees get theirs. A specific role and set of responsibilities become thing of the past. Meeting a customer to try and close a deal, help manage the operations at the office and sit with a developer to discuss a technical issue, all in a single work day is a norm. Finding time on the specific thing you love doing – be it coding, designing, strategizing, marketing or anything else, does not come easily. The pressure of shipping the product or completing the project is driven by how much it costs irrespective of whether you are self-funded or backed by investors. If you cannot afford the tools and resources for the technology you want to build on, one has to look for alternatives while ensuring it still comes out as a viable product. It’s a constant endeavor to maintain a balance between the three key pillars of your business, people, product and process. At the end of the day if you are not able to sell whatever it is you are producing and make up a case as to why they should choose you, one has reached a dead end. As a founder you have to believe in the potential of your product. Before proving it to your customers you have to prove it to your employees, partners and vendors. One of the things that make it tricky is dealing with external factors that are beyond your control. As they say timing is the most important factor that decides the success of your business. The need for your product can be market driven or introduced that you believe helps solve a problem. Although willingness to adapt your product and the availability of the supporting technology required for your product to work should be at its peak. Alternatively one also falls into a trap of assumptions. We came up with a mobile based service few years ago targeted for a specific group of professionals. It was obvious in our mind that the service would make it easier for them to get to the information they need. Turns out for a set of them the existing round about approach was not a big deal while for others they were not comfortable accessing this information in a digital form as they were used to the paper format. In this case the need was for us to identify and fill the trust deficit first before offering the technology based solution. Pricing your product be it software, a service or a retail item is another challenge that you have to deal with. I always thought how hard it could be? Determine how much it costs to build the product, add margin to it as your profit and you have the number. Just considering the cost part is an exercise in itself. Consider Fixed costs, recurring cost, indirect cost, travel and logistics, operations cost to start with a few. How much you value the customer’s business, potential to up sell, support and services desired by customer, volume involved, expected delivery timeline, resource availability on your end, available cash flow to invest up front are few of the other things to account for. Based on the domain you will have more but not less. Then there is competition, current economic environment, and your ability to sustain and scale that further influence your pricing. However not all is gloomy. Had it not been for getting into starting on your own I may have not started my own blog, may have not spoken at a few gatherings, got to travel, get to learn entirely new domains and dare to write, however imperfect it may be. Of course nothing prevented me from doing all this in past jobs as well but now these opportunities came to be more obvious to take up. Sometimes your vision of what is possible becomes limited by what you are exposed to. These ventures forced me to learn aspects like branding or accounting which were way out of my league. I have a new found respect and understanding for disciplines that I had not thought about before and how significant they are in contributing towards the success of any business. I always envied the freedom entrepreneurs enjoyed with their time. Although you can choose your own work hours taking the time out though is hard to come by. There is a certain threshold the business has to cross to free yourselves from the everyday operation and maybe afford a vacation. Until that happens you may have to see your friends post pictures from their outings while you are hunkered down to ensure you meet the basic need of food and paying your kids school fees. But that’s what you signed up for in the first place, didn’t you?The author, Rahul Joshi, is a start-up entrepreneur and founder of nectarfarm.com
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Sanjay Swamy is a start-up veteran. His friends say that his out-of-box thinking has led him to scale up operations of several businesses. In 2006, when he was the CEO of mCheck, Swamy worked with telecom and banking regulators to help build regulations for mobile commerce. Perhaps, he was perhaps the first to scale up this industry. In 2015, Twitter acquired Bengaluru-based mobile marketing and analytics company ZipDial. And the deal enabled Swamy to entirely focus on start-ups. His investment arm called Angel Prime is a $10 million fund which incubates technology companies and youngsters with ideas that can benefit the mobile Indian. They have invested in 8 companies so far. Speaking to BW | Businessworld's Vishal Krishna, Swamy says the company will close at least six deals per year. Excerpts from the interview:Finally, Sebi has come out with listing norms. At least, it would be easier for entrepreneurs to list in their own country?It is a welcome move. Having a friendly vehicle is very important for investors. There are solid start-ups in India and now with the norms being put out, it's only going to increase investment in India. The numbers are here to stay, just take a look at the smartphone penetration and the number of opportunities that it has presented to build technology that can change lives. China was like this in 2007 and they have seen a massive ramp up of start-ups since. But it is still early days because we need to look at the nuts and bolts of the listing norms. What interests you in ideas today?Today people learn from the past mistakes. There are young entrepreneurs who are willing to fail and are ready to work with new ideas. It is interesting to note that Indian companies are now started by boys and girls who are between 21 and 29 years of age. There are older people who are also becoming start-up founders. The last five years has seen Indian entrepreneurs become bolder because of the penetration of smart phones and the sheer population size presents several business opportunities. I have noticed older people join start-ups because they want to back the idea and cash in on the growth upon an ideas success. Where do we come in? We come in at a very early stage as a fund and provide value whenever needed. What we will not do is to make decisions on behalf of entrepreneurs. But one must remember that we spend months evaluating ideas and we are not a fund that invests in a company because we want to be everywhere. We are focused on technology. By that I mean financial technology, payments, security, education technology and internet of things. The ideas we back we hand hold them.How do you evaluate an entrepreneur?First he should know why he wants money. Then he should know who he is taking money from. We are disappointed at times because we close only 1 in 10 engagements that we make. Some deals do not close because the founders have not evaluated the market that they want to serve. It is sometimes compelling to back the opportunity alone. Before raising a fund an entrepreneur should also validate the idea. The idea should have gone through certain iterations. This makes it easier for a fund to invest in. We have a lot of success with start-ups serving business to business companies. Is there a particular reason for the same?Yes the consumer game requires velocity which is why we notice that companies that succeed have such high valuations. In the B2B industry we have seen successful start-ups because there are clients adopting a technology. It may also be because this business does not require scale. It needs paying customers. But the BBC business requires a large understanding of the customers and consumption behaviour. A start-up in either case must understand their target market.We want to back ideas that will not be copied easily. Today capital is no longer a differentiator. Four or five years ago you could raise money and people would talk about you. Today all funds are looking at fundamentals and unit economics is the key. Also in a start-up more things go wrong than good. The competition today is in acquiring teams that can ramp up an idea. I would say that there are challenges to find a company that can disrupt the market with the least capital. That said I get 1000s of ideas in my mail box. It would be interesting to see what business models will succeed. But we are looking at technology and how it can be scaled for enterprises to win more consumers to clients.
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The Pune-based Hinjewadi Industries Association along with Maharashtra Industrial Development Corporation set up a shuttle bus service called MetroZip “Daily 2,50,000 employees come to Hinjewadi to work and this number increases every year by 10-12 per cent,” says Anil Patwardhan, president of the Hinjewadi Industries Association, an industrial association for companies based out of Hinjewadi area of Pune. He adds that there has been no major infrastructural development, road or flyover, in the last five or six years. “There is only one three km long road that leads to the industrial park and it gets highly congested during office hours. Being stuck on that road for two hours every day has become a normal routine,” Patwardhan adds. In September last year, HIA along with Maharashtra Industrial Development Corporation (MIDC) proposed a private transport system to ease the traffic woes of Hinjewadi and the area around it. They got facility management company Supreme Facility Management (SFM) on board to be their transport vendor and did a pilot study last year. They realised that 30 per cent of the employees were using four-wheelers, 35 per cent would use two-wheelers and the rest used company provided buses or other means. The idea was to discourage one-car-one-user practice and get these 65 per cent people using independent transport to start using shuttle service. So, in September 2014 they launched a shuttle bus service called MetroZip. They started with four popular routes in Pune with 13 buses. In the first week of the project 70 people registered on the online portal to use its service, shares Prashant Mohite, Chief Operating Officer of SFM. The popularity of this project grew by leaps and bounds and by December 2014, 700 started using its service daily, he informs. Along with that, SFM kept doing more surveys and realised the need for buses at several more routes. Due to the growing demand in February 2015 they started with 24 more routes with 38 buses. In fact, companies like Tata Technologies have shifted all their 650 employees to use MetroZip, shares Mohite. SFM is also trying to get WiFi and other facilities in the buses to make the commute more attractive and get more and more people to use this service. Presently, they have 48 routes all over the city of Pune with 74 buses and are catering to 3000 people per day. “From these 2,300 are those that have ditched their private vehicles for the bus,” shares Patwardhan, president of the HIA. “Due to MetroZip, more and more companies are applying to become the member of Hinjewadi Industries Association,” he quips.
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In the science fiction blockbuster, StarWars, the Dark Star is a loathed spacecraft that has the power to destroy planets. Its conquest of space is halted by a band of rebels who believe that the universe has to be freed from the wrath of dictatorship. Such is the scene that one witnesses, in the consumer internet world, that it is a battle royale for the mobile universe and advertising 'space'. The adversaries are Google and Facebook, on one side, versus a "federation" of smaller adtechnology companies. These wars often go unnoticed and need to be looked at from the context of opportuntiy. Publicis, the advertising giant, says that mobile ad spends will grow to $45 billion in 2016 from a mere $13.5 billion in 2013.Giant KillersThese adtech companies or startups represent the little guys, millions of app developers and media houses, who cannot afford to advertise on Google or Facebook. There is new hope seeding in the industry. It has taken root in the form of mobile app advertising; a 3.0 version powered by InMobi. Its platform called Miip is going to make publishers not just access advertising, but it also enables advertisers to get personal with their target audience, by engaging them with creative pop-ups, and will ultimately make them buy services. The platform is breath of fresh air to the already struggling adtech ecosystem.However, one must be aware that Google and Facebook have begun offering micro stores, of retailers, within their apps. The only problem is that neither Google nor Facebook have invested in tracking consumer habits and have no way of telling what happens when consumers move from one app to the other, which is InMobi's big bet on taking on these internet giants. The two years of hard work has taken shape in the form of the Death Star destroyer. The timing, of this platform, is a perfect media run for InMobi.It also believes that Miip can bring 1 billion consumers worldwide which will create a substantial business for InMobi, which is a direct $300 million business that can go in to its top line in 2 years. The company does not confirm this number, it obviously has a billion dollar business in its mind. But just when some of us wrote off adtechnology, as a business, it seems that there is a force out there, after all, that can stop the oligopoly of the mobile app economy.Unfortunately, for these startups, today Google and Facebook have, along with Twitter and LinkedIn, captured 80 percent of the mobile ad-space. There are a clutch of Indian startups like Adnear, InMobi, VServ and Vizury that believe personal and engaging advertisements are the future of the mobile app economy. Like all small companies they have made their fair share of mistakes and are now becoming data-led companies.Advertisers first wanted something that could measure consumer intent and there began the creation of adtechnology 2.0, which offered data analytics on user habits in apps. These platforms helped app developers understand their users and in the process offered personal banner ads to consumers. There was an intrinsic problem in this model for adtech companies. While there was a revelation that a data oriented approach could be the next best thing, it was not inducing customers to close transactions. Companies were placing ads on real time bidding platforms with intelligence and advertisers began forcing their hand and doubting the merits of the 2.0 technology.But what is the use of measuring when there is no incentive provided to transact. There was speculation that the adtechnology industry would eventually collapse or merge into one or two entities. This is precisely why InMobi's Miip is going to be a game changer for publishers and advertisers. The platform itself promises to create multiple business models beyond just impression-based payments. For retailers it will allow them to target users even when they move from one app to the other. Say a customer is browsing between a grocery shopping app and a movie app, the platform can help advertisers, in this case the movie and the grocery app, to make an offer to the customer for product gratification. This will change mobile app advertising forever, which means the Miip platform is open to anyone with an intention of capturing and converting an audience. People have called this phenomenon of tracking customers between apps deep linking. Flipkart and Snapdeal are working on a similar model to target consumers. Who knows they may make a splash with InMobi in the months to come.The question is will this 3.0 version of adtech companies work? BW Businessworld observes that this platform can be used by the likes of Walmart, Ford, General Motors, Fox News and the like. These are companies that have missed the consumer mobile internet revolution and are in serious need of engaging their consumers on the mobile. By the way Miip also reminds us of the "road runner" cartoon, courtesy Warner Brothers, where the bird, which outwits the wily Coyote every time he plans to trap it, announces its arrival and getaway with the famous call "meep-meep". But are these adtech companies fast enough to catch the Dark Star? Over the next 18 months we will either see adtechnology companies collapse or they will rise as the new Republic of the ad-space with several private equity and venture capital funds backing them to battle Google or a Facebook.
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Rahul Yadav, the ex-CEO, of Housing.com, announced on Facebook that he will be back with his new venture in a month. Sources said the new venture could be in the real estate sector. While it is still too early to know who are his investors this time, the innate brilliance of Yadav cannot be undermined but this time around, investors are sure to want to know how he would scale it, build his team, and do more due-diligence around it. In 2012, Yadav, along with his batchmates from IIT, co-founded Housing.com. Investors had bet big on it and pumped in $121 million in four rounds.Meanwhile Yadav posted on his FB profile these words:"If the path is smooth, dig your own holes. If no challenges, create them on your own.'Just for the sake of practice. Just to push yourself to the extreme. Just to become stronger. Just to make things interesting. Just to make things fun.I'll be back...this time with 100x.... [10x of last formula (10x)]30 days to go.Is the world ready?" Yadav was sacked by the Housing.com board on July 1 for his behaviour with investors and media. “The board believes his behaviour is not befitting of a CEO and is detrimental to the company, known for its innovative approach to product development, market expansion and brand building,” the company had said.Last week, Housing.com appointed Rishabh Gupta as the interim CEO of the realty portal. Search for an interim chief executive is underway.
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Mumbai-based crowdfunding platform for social, personal and creative projects, Ketto has raised $700,000 in funding led by Pradyumna Dalmia, deal champion of Calcutta Angels and Sudhir Rao, deal champion of The Chennai Angels & co-founder of IndusAge Partners.The other investors in the round includes - Singapore angel network, Anupam Mittal, Indian Internet Fund, Letsventure, Chennai Angels, Calcutta Angels, Intellecap Impact Investment Network (I3N), Ah Ventures, & Project Guerrilla. With the infused funds, the startup plans to double its technology and business development team with an aim to reach $100m in volumes via crowdfunding. Ketto also plans to expand operations in Singapore, Indonesia, Malaysia, and other South-East Asian countries.Varun Sheth, Co-founder & CEO, Ketto said, “The fresh round of funds will be used to build a world class platform which will facilitate users to raise funds across multiple categories for any project of their choice.”With global crowdfunding market estimated to reach $96 billion by 2025 and Asia being the key growth driver, Ketto is uniquely positioned to amass maximum support for any projects – be it disaster, social, technology, creative or personal.Sudhir Rao, the Chennai Angels and co-founder of IndusAge Partners said, “It is creating a platform where everyone has an equal chance to raise funds for any project: be it social or commercial.”Founded in October, 2012 by Varun Sheth, Bollywood actor Kunal Kapoor and Zaheer Adenwala, Ketto is Asia’s largest crowdfunding platform for social, personal and creative projects in Asia according to crowdsurfer.com. The company has witnessed a growth of 3000% year-on-year basis in terms of volumes, and in the past few months, has been crowdfunding close to a crore monthlyIn the last 12 months, multiple celebrities & corporates have backed various projects by raising funds on Ketto, The list includes names like - Hritik Roshan, Amitabh Bachchan, Anuskha Sharma, Myntra, StarSports, among others. Recently, Ketto has created first-of-its-kind partnership with Lakme Fashion Week - to provide a platform to the seven Gen Next designers to garner funds to launch their label at the upcoming showcase in August, 2015 in Mumbai.(BW Online Bureau)
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The Small Industries Development Bank of India (Sidbi) signed a Memorandum of Understanding with Snapdeal, an e-commerce major in India, to provide financial support to its MSME vendors. The MoU was signed by Dr Kshatrapati Shivaji, CMD, Sidbi and Kunal Bahl, CEO, Snapdeal on July 14, 2015 at Sidbi office in Mumbai.E-commerce is the buzz word in the global as well as domestic market. The MSMEs find e-commerce platforms like Snapdeal as a promising ground for increasing their business opportunities. The e-commerce sector in India has become four times its size, from $3.8 billion in 2009 to $17 billion in 2014, growing at a CAGR of 37 per cent. The sector is expected to cross the $100 billion mark within the next five years, contributing over 4% to India’s GDP.Small Industries Development Bank of India (SIDBI), set up under an Act of Parliament, has been consistently promoting, financing and developing the Micro, Small & Medium Enterprise (MSME) sector since its inception on April 02, 1990. SIDBI continued its business model aimed at addressing the financial and non-financial gaps in the MSME eco-system. Some niche financial gaps addressed by the Bank are equity / risk capital, receivable finance, sustainable finance which includes energy efficiency (EE)/ clean production (CP) technology and services sector financing.Over the years, Sidbi has pioneered a number of innovative financial products and set up new institutions to cater to the diverse credit and non-credit needs of MSMEs. In its efforts to include larger number of MSMEs in its fold, Sidbi tied up with a number of intermediaries to increase its outreach. MoU with e-commerce giant ‘Snapdeal’ is one such effort in this direction.The innovative financial products are growth capital / risk capital, receivable financing / reverse factoring, energy efficiency financing, micro finance etc. Snapdeal promoted by Kunal Bahl along with Rohit Bansal, is one of the India’s most impactful digital commerce ecosystem, that creates life changing experiences for buyers and sellers. In its journey till now, Snapdeal has partnered with several global investors and individuals such as Softbank, Blackrock, Temasek and eBay Inc., Premji Invest, Intel Capital, Ratan Tata, etcFor addressing the problem of lack of required financial assistance, Sidbi and Snapdeal have joined hands to enable latter’s MSME vendors to scale up their online business through financial support from Sidbi.
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Funding to be deployed for multi-city expansion and brand management activitiesBoxMySpace, a Mumbai-based unique storage solution provider which uses technology to enable clutter free homes and office spaces, has raised Rs 1.92 crore from a consortium of investors led by Farooq Oomerbhoy, who was one of the co-founders of the early stage fund Orios Venture Partners. Ritesh Veera and Singapore Angel Networks also participated in the funding round.The funding will be deployed for expanding operations in metros including Pune, Bangalore and Delhi and undertaking key marketing efforts. BoxMySpace also plans to launch other innovative storage solutions in the future and partner with online retailers and SMEs to streamline their need for an efficient storage solution for their goods.Established in January 2015 by Pratyush Jalan, BoxMySpace was formed with an aim to bring the same convenience of cloud storage to the physical goods of a consumer’s home. The consumer can effortlessly avail on-demand storage service for their household goods at their doorstep either through the web or mobile application across Android and iOS platforms for monthly fee starting at Rs 99. BoxMySpace delivers high quality storage boxes to customer’s homes/offices wherein they can pack their belongings in the boxes, thereafter BoxMySpace collects it and stores it safely for them! It also provides spaces for larger storage items through it’s 4x4 and 6x6 packages. BoxMySpace leverages the unused spaces in large warehouses and plugs the gap to provide a technology backed solution to retail customers. It also provides the consumer with their storage dashboard to create a visual catalog of all their stored items and a unique code to each item/box to enable recall within 12 to 24 hours.Commenting on the investment, Farooq A Oomerbhoy, said “We are delighted to partner with BoxMySpace which is poised to lead the innovation forray within the storage industry in India. Shrinking living spaces, dynamic work patterns have resulted in people adopting a transient way of life, necessitating the need for storage solutions. Certain problems which plague consumers but do not consciously warrant attention unless a solution is bought forward for them, (for eg Ola/Uber) and BmS is one of them. Once consumers realise storage is no longer a hassle and expensive, BmS will become their preferred choice. We are working closely with BmS to introduce this solution to not only Indian consumer, but given the scalable nature of the business will be looking to expand in other part of Asia very soon. ”
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