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India in 2030’s – Impact of India Stack

The year is 2030. India is a developed, happy democracy. With a population of over 1.5 billion, it has become a role model for other nations, both developed and developing, in putting public digital infrastructure to enable paperless, presence-less, frictionless transactions.

The new generation does not know what a government office looks like and has not encountered government bureaucracy. Instead, what they interact with is an omnipresent, government digital infrastructure that delivers services instantly — from anywhere with no paperwork, only with their consent and their privacy protected.

We describe the typical activities of life as it progresses from the view of two generations.

The story

Radha and Rahim live in a remote village in India and are expecting their first child. The government provides financial assistance to the pregnant mother, Radha, for a healthy diet. The financial assistance is transferred to the Aadhaar-linked bank a/c using the Unified Payment Interface (UPI) infrastructure. Radha can use the money and the UPI system to pay for nutrition in a cashless manner at any shop for supplies. Her pregnancy monitoring medical reports are delivered to her Digital Locker electronically. With her active consent. she can share these reports electronically with other doctors or agencies to assist her in the decision-making process during the pregnancy period. Further, Radha can, again with her active consent, share her anonymised pregnancy reports for data analytics, which will in turn promote the understanding of major medical trends in the neighbourhood, region, state and country.

Soon, Radha and Rahim are now blessed with a beautiful girl. They name her Rani.

When Rani is just about a month old, her parents get her an Aadhaar identity. Since the day Rani started understanding concepts like her name, her identity, etc, she also knew she has a unique identity number, called the Aadhaar number. Even before she could walk, Rani had a bank account. So as she grew up, Rani would provide her Aadhaar number as part of her identity at various interaction points. Be it getting a scholarship in school, her education progress reports, her medical reports, her insurance policies, her bank a/c details, and so on, all these documents are conveniently available in here Aadhaar-linked Digital Locker. Rani can conveniently access and share these documents with her active consent.

In Rani’s mind, there isn’t much difference between a bank a/c and an email account. While one holds and transacts with money, the other holds and transacts with emails. For Rani, her Digital Locker account is the only locker she understands, and this is where she can find and keep her documents safe. She never has to worry about maintaining physical documents or their photocopies as the Digital Locker is a hassle-free system.

Rani, Radha and Rahim visit the local medical centre periodically for routine check-ups and immunization. Their medical progress records get digitally stored in their respective Digital Locker accounts. If during the medical interaction, a new doctor wishes to refer to their historical medical record, the same is available to the doctor after s/he gets active consent from the patient.

Back in the days…

Rani once went to the ‘bank branch’ to open a new a/c. This field trip was part of a ‘museum tour’ for her class to understand how banks used to work in the past. When she stepped inside the branch, she was shocked to see old photographs showing how people would carry papers and files of their identity papers, stand in long queues at the counter and submit photocopies to have a bank account opened, in the past.

In this museum bank branch, she witnessed old cheque leaflets, passbooks and various forms which were used for withdrawing and depositing money in the bank being preserved in glass displays. This was all very strange for Rani because the only physical currency that she had ever seen was in a preserved format at her home. The visit sparked Rani’s curiosity. When she got home that evening, she asked her parents about how her generation’s life differed from theirs.

Rani’s question took Radha and Rahim on a nostalgia trip to the times before 2010, when they struggled to access basic services. They narrated the ordeal they faced, starting from establishing their identity at various government departments for any service delivery, the umpteen number of photocopies of their psuedo-identity papers such as ration card, voter id, etc, that they would need to submit. In addition, since Radha and Rahim were young and would move depending on where they found work, it would be hellish to establish their identity in different cities and towns in the same country. This was so because one state would not recognise an identity document issued by another state.

Life in 2030

Soon, Rani completes her education and is skilled enough to enter the workforce. She shares her credentials with independent agencies, which anonymize her identity and add the data provided by her to the national skill registry. Such a skill registry can assist the government and other agencies to plan for skill development of the nation. Rani shares her credentials from the Digital Locker with her active consent with a prospective employer. This appears seamless now but she recalls her parents’ struggle that in the pre-2010 times, there used to be an entire industry whose job it was to verify credentials submitted by candidates for prospective employers. This so-called industry was so big that scrupulous elements would run scams of procuring fake certificates to enable unqualified job seekers get jobs.

After working for a few years, Rani decides to become an entrepreneur. As an entrepreneur, Rani interacts with various customers and vendors. She uses the UPI framework for seamlessly receiving and making payments across the country instantaneously.

Rahim often jokes about the ease of payments in the current times, describing how difficult it was to send money to his parents in their village. Today, anyone can send money to someone else by simply knowing the person’s mobile or Aadhaar number at near-zero cost and almost instantaneously. But when he was young, he would be charged 5% of the amount to transfer money, and the transfer itself would take upto a week before the money reached his parents.

Rani gets married, she receives her marriage certificate from the government in her Aadhaar-linked Digital Locker electronically. Rani was able to share her marriage certificate electronically with various authorities and agencies to change her name on documents such as her driving license, bank account, passport, etc. This ensured a seamless and hassle-free name change.

With marriage came the onus of investing in life and non-life insurance policies. Being a digital native, Rani acquired these policies using the E-KYC process with UPI framework for payments. These policies were then issued by the insurance companies and directly resided in Rani’s Digital Locker. She can access these policies from any location and at any time. The best part is that she isn’t afraid of losing the paperwork — unlike her mother Radha, who now has a special affinity for the Digital Locker.

Radha had a particularly trying phase in 2005 when a cloud burst in Bombay led to a massive flood in the metropolis. Radha’s ground floor house went under water and she lost all her documents — her identity cards, education certificates, medical reports, insurance policies. She had to run from pillar to post at several agencies and government offices for an entire year after the floods just to obtain a copy of all the washed out documents.

Every time Rani recalls her mother’s tale of ordeal, she feels blessed to be born in the current time.

The safety of the digital locker makes her sleep peacefully without worrying about paper documents, and being able to share these conveniently with consent. The removal of the big payment processing hurdle has ensured that Rani focuses her energy on improving and expanding her business to serve the larger society. Macro data analytic trends helps her plan for what the society needs and be assured that her services will be required in the future.

Conclusion

India Stack is the term given to a bunch of public digital utilities that have been created by the government since 2010. These include:

1) Aadhaar – a biometric-based, unique identity platform, with a facility to authenticate online

2) E-KYC – A service which empowers an Aadhaar-holder to share his/her Know-Your-Customer information electronically with active biometric consent

3) E-Sign – An online electronic signature service, facilitated via E-KYC to digitally sign a document

4) Digital Locker – A mechanism to issue government documents to Aadhaar-holders in electronic format for convenience of storing and sharing when required

5) Unified Payment Interface (UPI) – A payments architecture that enables universal electronic payments that are cashless and promote financial inclusion

In the pre-IndiaStack days, there was much friction in every transaction of routine business. Concepts like data analytics on anonymized records for prediction could not be envisaged. The extensive adoption of IndiaStack makes all these benefits a reality.

Shrikant Karwa

 

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Scalability Vs Sustainability – What should come first for a startup?

In the highly competitive market today, it seems like a trick question on whether a startup should focus on scalability, which seemed to be a trend until last year, or sustainability. Though one might toss for scalability at the very outset, facts speak otherwise.

This year, a lot has been written on the high “cash burn rates” of the star online startups and predictions of doom in the areas of growth or funding. This is in stark contrast to last year which was dominated by high valuations, wide ranging expansions, hyper sales and big hiring packages. These high cash burn rates were partly due to investor pressure to scale up, gain market share from the rivals and clock high GMV’s (Is it the right metric anyway?). There was a furious race to achieve this among the top funded companies and a lot of “me too” startups hoping to cash in on the investor gold rush.

However, now this unbridled growth has reached a plateau due to coffers running dry and wavering customer loyalties. So, this frenzy for rapid scalability seems to have come at a cost. The way these companies have been spending cash has raised a big question mark over their long term sustainability. So the moot question is whether it is wise to scale up so fast if it puts your very survival at risk?

A leading Indian brokerage firm made a study of the 22 top Indian e-commerce startups during the financial year 2015 – 16. The prognosis by them was quite grim. In that period, the combined losses grew by 293% to Rs. 7,884 crores on a combined earning of Rs. 16,199 crores. Only one start up, Practo, in the healthcare tech sector, was making more revenues than expenses.

Inspite of the hectic pace of growth, the losses were brought about by ‘below cost’ discount sales to attract customers, big advertising spends across all media, and rapid expansion into smaller cities to achieve scalability. Also, there was a dearth of original ideas or products. Most of them were copycats of each other with similar product offerings. One can’t but be reminded of the egg selling scheme of Milo Minderbinder in Catch 22 of buying high and selling low!

In fact, the first five months of 2016 have witnessed over 18 startups wrapping up operations. Atleast 15 of these startups were funded and just one startup went beyond Series A stage. Not surprisingly, 4 startups were from the food tech space, 4 in the hyper local category and 2 in fashion. They were all crowded landscapes already. Going by a Goldman Sachs report, private equity investments in startups has declined by a whopping 25% as compared to last year. So obviously, focusing on scalability over sustainability may have been a flawed strategy.

High cash burn for scalability and a dependence on investors is not the right survival strategy anymore for Indian startups. Investors too have shifted their focus to startups that have the potential to sustain in the long run rather than those with just high valuations and no ‘real’ returns.

In a way, this year will be the best learning for startups as they are slowly realising the pitfalls of only focusing on scalability. Pepper Tap, the grocery delivery app, had to shut shop in six cities, including the major metros, and still couldn’t survive as it had scaled too fast and were not really prepared with the correct logistics framework to service its customers. It did not spend enough time to gain a stronghold in an already existing market and diversified too fast. Even Grofers, Housing.com, Food Panda and Zomato have scaled down their operations significantly and have shut down or scaled back operations in non- performing cities.

There are quite a few startups like Urban Ladder and Carat Lane that are building world class products and are competing with the top brands in the world. They have managed to organise fragmented markets to create “online” brands with positive unit economics. Oyo rooms and BookMyShow, are examples of such startups which can effectively fill a need in the market and have managed to innovate and grow their market share.

Since 2005, MU Sigma a leading Indian business application software company has been making waves in its respective domain too. It has quietly made a mark in the world without any high valuations or spending sprees because their business has value.

Conclusion

Many lessons have been learnt from startups that have gone bust in the past. Clearly, it is high time that startups start focusing on sustainability first because once a sustainable business model is in place, scalability will automatically follow.

Going forward, only sustainable businesses which are value-driven, with a respect for the bottom line, will draw the attention of the now cautious investors and yield better returns on their investments in the long run as compared to valuation-driven startups. Moreover, only the sustainable business models will be able to scale successfully and prove their real mettle rather than becoming just ‘one-time wonders’. In fact, brick and mortar or e-commerce, the fundamentals don’t change!

 

MN

 

 

An article by Mahesh Nair

Founder at Picsdream

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Google Analytics For Particularly Curious SaaS People

You are what you measure.

This is especially true for SaaS businesses. Our goals and endeavors center on user growth, delivering consistent value, and profitability. This again depends on the efficiency with which customers can be earned, and nurtured.

All this begs a question: how do you know and measure the most crucial KPIs to achieve said goals?

Well, I know this is subjective. Because it depends on where you stand and where your focus lies at any given point in time.

That being said, Google Analytics comes in handy no matter where you are as a company. And that’s precisely what we’ve set out to explore with the help of Dave McClure’s AARRR framework in an in-depth slide deck.

If you are at the helm of a small to medium sized business, Google Analytics just works, as it is a free/standard analytics tool that is easy to configure and maintain.

Although, when I was introduced to Google Analytics, I found it to be quite irksome to grasp for the following reasons:

1) There is a lot of generic material about Google Analytics on the internet, and its scope of use for a SaaS application is difficult to pin down.

2) Lack of actionable resources (what I really required wasn’t just a frame to understand the tool, but real lessons that I could put to test at my end).

Hence, with that in mind, I’ve put together a deck with things that I’ve learned over the last few months, that’ll (hopefully) give beginners a broad perspective on the use of Google Analytics for a SaaS business, and at the same time provide some actionables to get started.

Now, let’s dive into the deck.

Guest Post by By Preethi Shreeya, ChargeBee
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Instant, Automated, Remote: An Introduction to Digital Credit

There is today in many countries a proliferation of new digital credit services. These have been especially prominent in mobile money markets in sub Saharan Africa. The poster child has been M-Shwari out of Kenya; though there are a burgeoning array of new varied services in many places. The signals of deep interest from India are strong and India Stack may well position this market for an exciting ride.

At CGAP we have come to use the term “Digital Credit” to describe this new kind of service; though there may well be other terms. We hold that digital credit has three attributes that distinguish it from conventional credit:

  1. instant – decisions and transactions happen fast from application to disbursement to collections
  2. automated – while lending decisions are carefully calibrated each individual decision happens within a decision tree framework along a set of (evolving) algorithms, and
  3. remote – the services are delivered without relying on in-person interactions.

As we have examined nearly a dozen digital credit deployments in the past year, we saw many exciting innovations but also many early stumbles. To help new entrants get up the learning curve faster we developed, delivered and tested a set of training materials. These materials have been refined thorugh more than half a dozen deliveries with a wide array of banks, fintech firms, analytics firms and mobile money operators. We have put these materials together into An Introduction to Digital Credit. .

The introductory course is available for wide public dissemination and use. We built it around five main sections:

  1. An introductory session describes what digital credit is and distinguishes between two key models. One is new products – like M-Shwari – that are direct to individuals. As contrasted with new digital credit services that are delivered via a merchant or value chain aggregator. These two approaches entail quite different risks and business models.
  2. A second sections covers credit scoring and uses of new alternative data, such as mobile phone call records, are often part of the new innovation in digital credit. There is an introductory session for those new to credit scoring that describes how scoring is developed, how to tell if scorecards work, and an introduction to various kinds of data for scorecard building.
  3. A third section covers some of the product and service design considerations. This includes product details such as tenor, loan size, and initial pricing. There is in particular some very early research on consumer protection concepts pioneered by CGAP – a particularly important issue where given how fast digital credit can be delivered.
  4. A fourth section covers some of the financial considerations. While digital credit can be extremely low on branch and staff costs, often requiring no physical infrastructure to reach clients, it still incurs other costs. This section details a basic financial model for how digital credit business models can be built and highlights some of the unique financial dynamics.
  5. The final section is on partnerships. This is often the biggest source of failure is around partnership and blockage to experimentation. This concluding section on partnership highlights critical roles and provides a basic tool for how interested parties can consider and build out potential partnerships.

Whether you are already operating a digital credit service or planning to do one, the course aims to provide a structured high level view based on real deployments. It is a starting place to benefit from others that have tested and tried the idea.

At CGAP, we are excited about the potential of digital credit to expand access and also realistic about what more we need to do to make lending responsible amid the speed new technology. India’s fast moving changes in digital finance will provide a new array of opportunities and we can’t wait to watch and learn from what happens next.

Guest post by Gregory Chen, Regional Lead for Asia at CGAP, a resource center on financial inclusion housed at the World Bank.

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Freedom from fragmentation! Welcome to the ecosystem

The emotions of independence and freedom are flowing around in our hearts; hence it is befitting to discuss the same in a domain where most people haven’t pictured these yet. Let us talk about the product that is eating the whole world – yes, we are talking about the world of ‘Software’ after all. Even the people who are new to this part will notice the sheer amount of change that has come around in the world economy, labour markets, currency valuations and more, solely by the influence and discretion of software prowess. However, what becomes hard to notice for many people is that there is a silent revolution underway in this whole domain. What we are talking about is the shift from a fragmented approach to an integrated one.

Before you start thinking about the questions (like what is the need? Why is a change required?), let us consider a very simple real life example. Take the following phrases and see what comes to mind while thinking about them – ‘Discover what is happening around me’, ‘Chat with my group of friends’, ‘Discuss and plan for a group activity’ & ‘Split and share money with a friend’. If you look closely, these 4 action aspects pretty much sum up your daily social lifestyle, especially considering the complicated lives that we lead nowadays.

 

However, interestingly the legacy platforms and systems that are prevalent have been mostly confined to 1 vertical in each of these cases. For example, you have ~2 apps in your phone for checking out the movies and events running in town, then there would be ~3 different apps for checking the best restaurants to go to and the deals to avail, and furthermore, a plethora of apps to chat with your group of friends. Now, each of these apps perform specific functions suited to their use case, however, in a dynamic and real time social scenario, you will find yourself juggling between multiple apps / web pages, taking screenshots / copying text and then performing the desired intended series of actions. Isn’t it?

Now, think is this really a smart way to go about it? Do we REALLY need so many apps? Keeping the subjective part aside, let us take a look at some hard numbers. Consider this fantastic report compiled by TheNextWeb on the fragmented Android market or this detailed analysis by ContractIQ on the vendors and variety of software suites out there. Well, things get clear, don’t they?

Fragmentation

Welcome the ecosystem approach

In light of the above, ask yourself, why should we remain limited to the old approach and use up more time in juggling between different apps and systems? Why not go for a more advanced ecosystem style approach (something like what Facebook messenger is bringing around now in terms of allowing you to book an Uber and more directly from the chat window). This is the approach that precisely a lot of new age products advocate (including ours) in terms of the complete flow. Not only does this approach help you save time (that we all value so highly) but also maintain just one point of contact in terms of the interacting system (Comp. Science geeks and service guys will understand the enormous value of this).

SweetspotGetting back to the phrases we discussed earlier, let us combine the vertical sections of the app market into 1 and perceive the awesomeness that we get –

  • Discovery of events, activities, restaurants, deals and more
    • Exploring the best movies, events, deals, restaurants and outings around you
    • Also checking out the details required under one neat and seamless flow without jumping between multiple apps
  • Discussing, planning and chatting
    • Choosing whatever activity you want to go for, after checking what’s trending, what is recommended, what do your friends like & much more, all at one place
    • Inviting your group of friends to add them to the group to discuss and plan together. Chatting together to see who is in and who is out
  • Splitting and sharing money from any account
    • Splitting the costs for your activities (whether before or after) and everyone can put in their own share directly using any means linked to their bank account.
    • Avoiding the hassles of making excel sheets / notes and even setting reminders. Letting the single solution handle everything is the ultimate nirvana mode.
    • Not only that, wouldn’t it be wonderful if the app didn’t even require you to share any account details (like account number, IFSC code etc.) with anyone!

I am sure you will find that the old fragmented apps scenario pales in comparison to this integrated solution when it comes to seamlessly navigating your social lifestyle. For those who have not explored yet, come and check out the magic that happens when all these touchpoints come in one trajectory under one roof at Mypoolin – https://mypoolin.com/mobile-app.php

Time to say ‘ahoy’ to freedom and welcome this silent revolution towards an integrated future!

Guest Post by Rohit Taneja, Co-Founder at MyPoolin

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8 tech products from India for the World

India has come a long way since its Independence on 15th August, 1947. One industry that has really shined for India is IT/ITES and that really have put India in a global map. The major contribution has come in the form of Software services with names such as Infosys, TCS, Wipro & HCL being the torch bearers. However, be it due to lack of media attention or for the lack of sheer scale, India is still not looked upon as a Product Nation that has created a global consumer or enterprise facing product such as Google, Facebook, Microsoft, Oracle, SAP and other such marquee names. It is a bit ironical that all these big giants have a size-able number of Indian minds working for them!

So, on the eve of Independence Day of India, let’s give a shout out to few products which are slowly and steadily helping India to become a Product Nation and inspiring many Indian entrepreneurs to dream big for the World!

#TechMadeinIndiaforWorld

Capillary Tech — Any retailer in the world if looking for a customer engagement solution, then Capillary probably will be there in the list of evaluation. That is the brand it has able to create for itself in quick time. It has shown that an industry specific solution can be also scaled up big time!

Crowdfire — It is a social media management app for Instagram and Twitter. Earlier know us ‘just unfollow’, it has really shown that to get users, the focus should be on user need and not on complex problems.

Finacle — Infosys should always be proud of on the success of Finacle. This has helped them take multiple risks in product and platforms space. Finacle has always kept itself up to date owing to change in banking customers’ behavior. The fact that banks are using it in more than 94 countries speaks a lot of its universal applicability. Finacle has shown that despite the parent company being service oriented, products can be created if given independence in execution!

Freshdesk — It started in an industry which already had multiple matured players in the market. But focus on UX, price points and its target customer needs, it has nailed the customer support space. And with its recent hiring, it has shown the importance of right leadership.

Tally — It is almost a synonym for accounting software. And probably the first global product out of India. Again have shown to focus on user problems than anything else.

Web Engage — It has redefined the way how products should engage with customers. Again it operates in a highly competitive space but with its focus on innovative features, has shown how a product should be scaled up.

Wingify — Just look at their main page and you will fell in love with its mission statement. Overlaps with the web engage space to some extent but the mission statement itself separates them out.

Zoho — The perfect example of how to run a product business. In the age where founders chase funding, Zoho has remain bootstrapped and keeps churning out a productivity product for a business problem.

These products inspires us at UX Hack on a daily basis to have the right intent and build for the World!

Guest Post by Nishith Gupta, Founder, UXHack.co

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6 challenges faced by early-stage startups that some effective tools can help you combat

Harbouring an idea in your head is one thing. Taking the leap of faith to execute, nurture and grow the idea is an entirely different ball game.

It calls for a tribe of people that we call Entrepreneurs.

Fortunately, this breed is on the rise. They make this game look deceptively simple.

Apart from the fact that you have to face a fair amount of social ire and family grumpiness, launching your own business and getting it off the ground comes with its unique set of challenges, the foremost of which is the problem of “scarce resources”. Your money tree will take months, sometimes several years to sprout.

One of the most valuable lessons we can learn is that there are several tools and apps for various functions that have grown all over the internet to help us overcome this “limited resource syndrome” that startups acutely suffer from.

We faced this challenge of limited resources in our early days too. In our experience, here are some of the biggest challenges faced by an early-stage startup that the appropriate tools can help you combat.

Bringing order to your sales pipeline

Sales requires a combination of people skills and product know-how. It also demands that we make sense of what the customer wants, and quickly dive into seeing what they need.

While getting those first few paying customers is about networking and selling within your circle, there comes a time when you have to start casting your net wider.

It is important at this point to have a process and tackle sales in a methodical manner.

While you can make do with Excel sheets for the first few months, they will add to the chaos as your customer base grows. Investing in a CRM tool becomes mandatory at that point.

This simple tool will allow your sales team to focus on selling and not waste time on decoding the sales pipeline and customer information that would be scattered all over the place without a CRM.

Working together as a team

Needless to say, one of the biggest assets for a startup is its people. For an early-stage startup, the people are the company’s only assets.

A startup environment requires people to fill multiple shoes and wear multiple hats. Not to mention that people now consider remote-working a norm – thanks to technology.

Team collaboration tools can help a great deal with keeping the team together and assist the project manager in assigning tasks in a more meaningful manner. It’s easier to keep track of projects and the status of tasks, and come up with contingency plans better.

Plus, it helps keep the sense of purpose alive in the team.

Without a tool to keep track of what the entire team is working on, it is easy to lose sight of the priorities of things that need to get done.

Creating a brand following

In the bygone era, marketing used to mean plonking billboards on the highway or buying TV spots for blaring commercials. Today, marketing means mastering the nuances of social media. It means building an email following. It means adding value through useful content and leveraging SEO.

Typical tools like social media scheduling tools to manage multiple social media accounts, email marketing tools, content management tools and analytics tools that integrate with your website are must-haves to keep your visitors and customers engaged.

This is also a way for the team to measure, analyse and learn from their experiments. Building on what works and scrapping the things that don’t is an important step forward in the growth of the company.

Design

Design is not just about aesthetics anymore. It has become an absolute necessity.

According to research, coloured visuals can increase your audience’s engagement with your offering by 80 percent.

Whether you need a website designed, a blog image or simply an image to go with a social media post, there are several tools to make your life easier – even if you have never been anywhere near a design school in your life.

Managing the monies

Amidst all the high-energy events in a typical startup workday, finance can be the one thing that will be happily relegated as the last priority – only for it to get back at us with a vengeance during those closing days. Not to mention that most startups don’t exactly consider hiring a dedicated accountant at this stage.

Here again, somebody has mercifully created tools for the non-accountants to look up and still smile after “crunching numbers.”

If you have the resources to invest in just one tool, let this be it. Trust us, you’ll thank us for it.

Connecting with your customer

“Your most unhappy customers are your greatest source of learning”- Bill Gates

Understandably, most entrepreneurs seek to meet a critical need in society that can be fulfilled by offering a product or service.  However, the most well-planned startup can fail in the blink of an eye if they lose sync with the customers who use their products and services.

Customers are a huge part of the startup ecosystem and being accessible to them at every turn can define the success of the product or service.

It becomes imperative that we establish, open and maintain channels for valuable dialogue with our customers while making sure we are listening to them. Again, some amazing tools make this a breeze, while also acknowledging that a startup does not have deep pockets.

To sum up, it’s an excellent time to be an entrepreneur. Countless opportunities exist, and more and more free resources are available to entrepreneurs than ever before.

Tapping into these resources and advice effectively can be the thin line between the success and failure of a startup.

For a detailed list of the tools that helped us grow during our early days and our experience with them, download our ebook here. (There’s a lot of tips and some ideas for jugaad as well).

Guest Post by Shivakumar Ganesa(Shivku), Co-Founder and CEO of Exotel, a leading cloud telephony company

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Design Thinking- The UnConference way

Gerard Butler and his army of Spartans walking down the stone corridors of the beautiful and mythical surroundings of IIM-B paint a beautiful picture. It’s really not too hard to picture them there, blending in beautifully with the surroundings too.

Designthinking‘Preparing for glory’- Like the Spartans, Pensaar too is setting stage for the ultimate revolution. The UnConference, Phase-ll of the Design Thinking Summit is gathering traction and building from a 60+ gathering at Phase-l to now include 300+ participants.

Our existence being rooted in Design Thinking the day of reckoning, 26th August is going to be an action packed day covering various topics. It begins with Pecha Kucha and workshops followed by exciting interaction formats like fishbowl, socratic dialog, market place and world café. Tying it all together will be design thinking experts from diverse backgrounds, wielding their own special weapons and skill sets ( Added bonus- they decide to show up in their greek robes. We have sent them the memo)

Embodying the mission to raise awareness about design thinking and its impact we are thrilled to bring to you just that. Join us and our partners IIM-B and Intuit to take advantage of this unique gathering of people, after all it has been designed keeping you in mind.

Click here for registrations: designthinkingsummit.com and help spread the word #DTSummitBLR

Guest Post by Deepa Bachu, Pensaar

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Through the Effectual Looking Glass

I began my entrepreneurial journey in December 2014. The incidents of 2014, when several cases of child molestations were reported in Bangalore’s schools, had spurred me into trying to do “something” about it. The key to keeping children safe in schools is to ensure that the people who work with them have a good track record. In the past, this was ensured by word of mouth. But Indian cities today are teeming with floating populations and there is no easy way of verifying a person’s history and credentials.

The idea was to build a digital platform where schools and their employees would participate in a simple process to build employee history and credibility. This would create a white-list of people who can be trusted to take care of children. The platform would optionally use Aadhaar for identity verification. We called it Staff You Trust.

My initial attempts at trying to get this incubated somewhere came to nought, so I took stock of what I could do with what I had. These were:

  • Time (oodles of it, because I had quit my job)
  • A technical mind that I hoped had not rusted after years in management roles!
  • Access to the wonderful world of open-source software

A friend introduced me to Django, a Python-based web application framework, and I took the plunge. I built a prototype, and got some early feedback from a few schools. There was definitely interest, but the conversations were quite theoretical. I thought that I should build the product and then come back to them. (An experienced entrepreneur would probably have got some commitment from schools first. But that’s hindsight now.)

I talked to a classmate who runs a software development firm, and he arranged for an Android engineer to build the app. I drew wireframes, learnt how to expose REST APIs from the server, how to install and run the server on a Linux VM in the cloud. It was a year of complete bliss. So much so, that I got myself into a new comfort zone that I was reluctant to leave!

For a while, I kept procrastinating, adding a link here and a button there, and telling myself that these were all-important features! The truth was that I was afraid of venturing out and facing rejection.

Around this time I heard about iKen, a bootcamp for early entrepreneurs by entrepreneurs, which could help in my journey. I applied, and got accepted for the batch starting in April 2016. The program doesn’t waste time – the first very assignment teaches you to face rejection. It rips off any band-aids that you may have placed around your ego and forces you to step out of your comfort zone. I had thought that my lack of sales experience would be a handicap. But I was told not to worry about that, because the past is no indication of the future.

My other obstacle was that I knew just a handful of people who had anything to do with schools. By now, I’d done my Bird-in-Hand audit at iKen – that included creating an inventory of ‘Who I am’, ‘What I know’ and ‘Who I know’. I approached friends, and got introductions through them to school owners. At each meeting, I would try to get a few more contacts, and so on. I built a 4-week-4-month plan with goals and metrics and religiously updated that spreadsheet every week, recording the outcomes of this week and planning the appointments for the next.

Gradually, I overcame my discomfort of doing ‘sales calls’ and started thinking of them as relationship-building conversations. And there were many wonderful conversations – with people (mainly women) who are passionate about education and have started their own preschools in pursuit of this vocation. Whether or not they agreed to sign-up on my platform immediately, my network was growing.

One day, I was surfing the web, looking for information on preschools in my neighbourhood, when I came across an article by Shweta Sharan, a content developer at the Buzzing Bubs publication, a digital publication targeted at parents. She is also the Founder of the Bangalore Schools Facebook Community that has more than 11000 members. I reached out to her over LinkedIn. A couple of days later, I received an enthusiastic response, with a request for a meeting.

We met in a café in HSR Layout on a Thursday, and I showed her my app. She was super-excited and filled a page from her notebook with a list of schools where she had contacts. Sitting opposite her, I felt exhilarated – I didn’t have to do this alone!

By that evening, I had joined the Facebook forum, and emailed her a blurb about my product, asking for beta trial customers. On Friday morning, she posted it, and vigorously set about tagging parents and school owners. She called/emailed school owners to arrange meetings for me. Those emails are still coming in.

On Friday afternoon, I got a call from Sarayu Srinivasan, a journalist at The News Minute, asking for an interview. On Saturday morning, Sarayu and I met and talked for over an hour. She reviewed the app in depth, asked a lot of questions, examined different scenarios, and asked for some screenshots. The next morning, the article was live, and being shared in different fora! Sarayu has also promised to introduce me to other people who might be able to help.

This was the principle of Crazy Quilt in action! You reach out to people, and when new connections are forged, you suddenly have more means at your disposal. It was now going to be about ‘Who we are’, ‘What we know’ and ‘Who we know’.

My plan now is to run pilots in schools of different sizes and categories – stand-alone preschools, preschool chains, large schools, child activity centres – and iterate based on user feedback. We need to quickly scale the user base across Bangalore’s schools so as to build a sustainable solution for a very pressing social problem. This should then be taken to other cities and regions, so that in the future, if an employee moves from Kolkata to Bangalore or Chennai to Chandigarh, his/her reputation travels intact.

Tanuka Dutta has an extensive background in computer networking, having worked at Cisco Systems and Motorola in various engineering and management roles. In her last role at Cisco, she was Director of an 80-member engineering team. She is currently on her first entrepreneurial journey, working toward increasing safety measures in schools and pre-schools. Tanuka holds a B.Tech in Electronics & Communication and M.Tech in Telecommunication Systems from IIT Kharagpur.

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UPI – The Revolution in Payment Industry

Japan introduced ‘Zengin’, a real-time money transfer mechanism in 1973. Thirty Seven years later, NPCI (National Payments Corporation of India) introduced IMPS (Immediate Payment Service) in 2010 as the first real-time 24*7 money transfer mechanism in the country.

In-between PayPal launched money transfer by just knowing a person’s email ID in 1999 and now in 2016, India is about to make UPI (Unified Payment Interface) live in few weeks. It will enable real-time transfer of money 24*7 just by knowing a person’s virtual address.

These two comparisons above need to be looked at with different lenses, one from the laying of groundwork and the other ease of usage. It took some time but NPCI setup IMPS which has performed very well with IMPS transactions growing at a staggering pace, over 100% every year. In May 2016 alone, USD 3.4 Billion were transferred on it.

However, these transactions have not really been very easy to carry out for Indian consumers. Whether with account numbers and IFSC codes or with MMID, the friction has curtailed the full potential of this behemoth on rise. This is where UPI comes in, abstracting the payments on top of existing robust IMPS to the degree that Indian consumers can now carry out transactions in few taps with just a virtual address. It is India’s PayPal moment for consumer payments bringing it to that parity in terms of end user convenience that will only lead to further digitisation of cash in the country.

This moment is also an inflexion point for us. Bill Gates recently said that “India will lead the world in digital financial inclusion”.

Few key things have led to this point.

The Indian consumer has adopted smartphones and internet very well. In 2015, the internet user-base in India recorded an impressive 40% growth over the past year and the smartphone shipments in India is estimated to grow by 29% in 2016. Stepping few years back, it has been a remarkable journey starting with paying for a train ticket on IRCTC website to small mobile recharges to e-commerce payments, Indian consumer got a taste of online payments and got comfortable with it and now slowly like it panned out in West, the demarcation of high touch and low touch products is diminishing with users now purchasing anything online.

Consumer trends aside, policy-making and the work of bodies such as RBI, NPCI, iSPIRT (Indian Software Product Industry Round Table), IAMAI and many more has helped in information collection, dissemination and laying of frameworks to provide a solid ground to build up Indian mobile payments story.

Apart from peer to peer payments, IMPS can now carry out PULL based transactions as well so that a user can now make merchant payments seamlessly with just an MPIN in a ‘Single Touch, 2 Factor Authentication’ method where a user’s device ID is being treated as the first factor of authentication.

Like any new system, it will take some time to set up and grow. The merchants will have to come on-board quickly to accept payments with UPI and users will need to be educated. For merchants, it will have a low TDR (Transaction Discount Rate), comparable to low Debit Card rates and higher conversion in transactions as multiple intermediaries and hops for an online payment to take place successfully will get out of the way. For the paying customer, it will allow payments in one tap and money will get debited directly from their bank account.

In past, we have seen many financial systems and methods take years before going mainstream but we believe that UPI will get adopted at a faster pace than what we have seen in the past. A lot of macro-trends and unique Indian payments landscape in which masses skipped credit cards altogether and many had a mobile smartphone as their first internet device indicates that things will play out differently here.

That brings us to the question that amidst all of these changes in the ecosystem with all of the above playing their crucial part, what role do we, the startups have? Answer is that as young entrepreneurs, it is our obligation to take this story forward.

Just like Uber used GPS, Google Maps and different facets of established or emerging pieces of technology, we have to use UPI to provide Indian consumers with great experience and delightful products.

In doing so, we will have to educate Indian consumers about what UPI is – what a virtual address is, how safe and secure it is, how they can have a virtual address issued by a bank when they don’t even have a bank account with the bank application (Payment Service Provider) issuing that virtual address and more.

The experience of on-boarding them onto UPI will have to be very simple and delightful.

The old ‘Goldilocks effect’ will have to be brought in where a user should not get too wary of the new yet understand that the whole payments paradigm has changed for good.

We at Mypoolin have spent a great amount of time acquiring tacit knowledge in how consumer payments are made and users behave in various social contexts and settings when it comes to payments. We are of the strong view that UPI brings the great convenience required for payments to be made smoothly and we will build great value on top of it for Indian consumers. We have begun playing our role by education our existing users and more with a UPI specific website and other channels about UPI which has helped us gauge market response to it and get valuable feedback that we can share with the ecosystem at large for the benefit of the market.

The applications of UPI are in many different use-cases and it is upon us startups to recognise it and take it to market.

We can’t blame it on anyone – the system or the current economic downturn to not do our job – UPI is one of the many enablers to follow that will help us build great technology products to make India a ‘Product Nation’

The true mettle of Indian founders to build great products will be tested and it will change the mindset as well to build India specific New from the scratch and set a trend the country needs for future entrepreneurs to follow.

This is our pivotal moment and we must not let it slip away.

Guest post By Ankit Singh, Co-Founder, Mypoolin

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#SaaSx3 has made a huge difference for Syscon.

Step-by-step secrets of deciphering the digital world.

We are an ERP product company. Our ERP solution, Syscon Cronus is targeted for manufacturing industries. We have all along for the last 20 years were been following traditional marketing route, out-bound. Though being an IT company, may be due to my manufacturing background and our Customers are from the same segment, we never put our stake in digital marketing. We always believed in Outbound rather than Inbound marketing.

SaaS x3 has completely changed my perspective. It was such a power packed digital Sales event. But the real beauty was the way it was structured. Every step was explained in detail that a dummy like was able to understand and implement it.

I really would thank the great guys like Girish, Suresh Sambandam, Pallav Nadhani & Shekhar Kirani who had taken their time-out and make it a point to hand-hold the eco system. Also wish to put my learning as a gesture to them, though many of this information will be available in a much better way in public domain.

Basics of Digital Marketing

Google Adwords:

Efforts:

  • It is all google Adwords, Analytics.
  • If google does not have a category for your business better do not waste your time (or) you can still run your business a life style one.
  • Having identified your business category, Google might provide its key words suggestion. Make sure that you pick the generic ones.
  • Also spend time in identifying your own key words. After the key words are just the way you think that your customers are searching for your product or service.
  • It may not be wise to use the competitors name / brand as your key words. It may fetch more as impressions and clicks but may not conversions.
  • Make sure that you remove the negative key words at least once a week.
  • You have to spend money on Adwords and but decide how much is feasible for you.

Results: In last 2 months we have generated close to 25 inbound enquiries and closed 4 orders

Website:

Efforts:

  • The first day after completing the above the bounce rate of my website was 99.9%. I never scored good marks in my education and I was happy to see that at least my website was doing better.
  • Later I came to know that it is real bad news for the bounce rate being high.
  • What is bounce rate? Bounce rate is an indicator that shows as to how long the visitor spent time on your site.
  • We then spent time in fine tuning the site performance of home page and other page information.
  • We have recruited a full time digital marketing guy who worked on SEO. After 2 months you know now the bounce rate is between 2 – 6%
  • Most important learning was, Call for Action (CFA). When a visitor comes to your site what you want them to do. So the first image in your site has to tell what you do and now what you want them to do. If this is not addresses well traffic will not lead to conversion.

Results: The bounce rate has reduced from 99% to 5 % which has resulted in 70% increase in organic traffic.

Content on Social media

Efforts:

  • It is important that you need to write original interesting content about your product and business.
  • Earlier I use to write articles in Linkedin. But I never thought that it was to be connected to my site. Now I post 3/4 of the article and for balance article it is linked to our site.
  • Presence in Twitter, Facebook and Linkedin is important.
  • We have been making at least 2 posts per week.

Results: This has created traffic from social media 40%.

Make the Customer as your marketing engine.

Effort:

Pallav’s presentation was so impressive. Soon after the event, we have implemented one small thing. In all outbound documents like Invoice, Purchase order, Offer etc., we have just added in the right bottom “Powered by Syscon Cronus” This was delivered with our latest patch.

Result: We have already received 4 enquiries through this.

The product tear down session by Suresh Sambandam was too good and very detail in highlighting the missing parts of our website from the visitor / prospective client perspective.

But the $1 million to $5 million was an ultimate-one by Girish – Freshdesk. In today’s dirty world, no one wish to give out so much of critical business information. I could also see the openness of the Investor – Shekhar Kirani, Accel Partners.

After this SaaS X3, our business dynamics has completely changed. All of us have developed detail eyes in the company. With so much of activity even our development and testing teams have become more agile. Every time when we make a new version release, there will be at least 1 or 2 critical bugs and 5 -6 non-critical bugs. But surprisingly, this time there were no bugs. Our team has become more conscious.

I wish to thank each and every one behind SaaSX, especially to Girish Mathrubootham, Suresh Sambandam, Pallav Nadhani & Shekhar Kirani for their self-less efforts in creating strong SaaS eco system.

Good karma by iSPIRT

Contributed By S.Vijay Venkatesh – CEO, Syscon Solutions Private limited, Hyderabad

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How we incorporated Deducely, Inc in the USA using Stripe Atlas

In our first blogpost, I’d like to talk about how we incorporated in US from outside the USA.

This is a version 3.0 post that is inspired from V 1.0 by my former boss Girish Mathrubootham and V 2.0 by Suresh Sambandam, CEO of KiSSFLOW.

This article can not be considered Legal advise, please consult a lawyer and/or accountant before incorporating.

US Incorporation 101

The US has one of the most mature banking and financial systems in the world. Owing to this many internet businesses prefer to incorporate in the US. In India the reserve bank of India does not allow businesses to automatically charge user’s credit/debit card’s; explicit user consent is expected via a second factor authentication like an OTP or a password. This hampers the smooth functioning of subscription businesses that charge users every month.

However A US based company can store its user’s credit cards and charge them automatically in a recurring fashion seamlessly. For the convenience of auto-charging credit cards many ‘Subscription As A Service’ (SaaS) companies based out of India have their headquartered in the US.

Deducely being a SaaS product, we wanted the ability to charge our user’s cards every month automatically without asking them to input their card number every month. Since we operate from India our options were very limited

We had 3 options in hand, but we had apprehensions too:

  1. Incorporate in a foreign country – Too costly, close to $2000
  2. Use 2Checkout or FastSpring – About 10% to be paid as commissions
  3. Use Paypal subscriptions – Developer un-friendly, average customer support

Enter The Atlas Program Stripe Atlas

Stripe atlas is a bento box for businesses to get up and running. Stripe Atlas grants the following for a flat fee of $500:

  1. US company registration (A Delaware C corp).
  2. Registering with the IRS for taxation purposes.
  3. A Zero balance US bank account in Silicon valley bank.
  4. Access to Legal and Tax consultation from PwC, Orrick and UpCounsel.
  5. $15,000 in Amazon Web Services Credits.
  6. A Stripe account ready to accept payments.

We were skeptical about this program, We even felt it was too good to be true but when we approached Avinash Raghava of iSPIRT and Suresh Sambandam of KiSSFLOW for expert opinion, we were advised to go ahead and incorporate via Stripe Atlas. It was totally worthwhile.

How to incorporate a Delaware C Corp in the USA through the Stripe Atlas program?

Step 1: Get an invite to the Atlas program

This is the most difficult part, as of now the stripe atlas program is invite only, you could try requesting an invite on the website or via their twitter account. Once you are successfully invited you’d get an email with a link that can be used to register an account at Stripe Atlas. Now You’d be required to create a new Stripe account.

Step 2: Enter detailed information about your business

Once you have signed up for the Stripe account you would be presented with the following overview screen :

stripe starting page

When we click on get started we are presented with a screen that asks a few details about the product and the business:

business details page

Step 3: Enter how you’d like to structure your company

There are two ways to structure your company when your business is not physically present in the US. This is a very crucial decision and should be taken after thorough deliberation.

  1. Setting up a US headquartered company with an Indian (or other non US country) subsidiary:Freshdesk’s model
  2. Setting up a US subsidiary for a non US parent company: KiSSFLOW’s model

Company incorporation screen

We had not incorporated anywhere yet and we went ahead with Freshdesk’s model , so we were asked to enter our company’s desired name, while entering the desired name please ensure that the name is not registered by any other entity, a simple google search could help you out.

Although we could have entered our local non US address, we went ahead and purchased a physical address in the US through virtual post mail for $10/month; virtualpostmail.com scan the physical mail that we get and email it to us. We received our ETPS(Electronic tax payment system) credentials through our physical address. Though the US address wouldn’t be of any other use in the immediate future, we wanted Deducely to be global and hence we invested in a US physical address.

We got a US phone number for free through Google Voice and entered that as our phone number, to get a Google voice number you need to know someone with a US phone number from a major carrier like Verizon, AT&T, T-Mobile or Sprint. Once the google voice setup is done you will be able to make and receive calls from your US google voice number through the Hangouts dialer app . You could enter your local number here as well.

If you choose to set up a US subsidiary with a Non US company as the parent you would be asked to present the Non US company’s tax ID and registration certificate. Please consult your local lawyer and accountant for any regulatory compliances that need to be met.

Step 4: Enter the details about the people in the company

In this page you’d be prompted to enter the personal details of all the people who would have more than 25% stakes in the company. Please have a scanned copy of your passport or any other government issued IDs.

Personal details about the founders

Now, in the same page, you will also be asked to select the company’s president, secretary, incorporator and directors.

Board of directors

Step 5: Enter the bank account administrator details and pay:

Getting a US bank account is the most difficult part for any non US entrepreneur , You either have to be physically present in the US or know someone in the US who could introduce you to the bank. These banks tend to have high maintenance fees and high minimum balances associated with them. However stripe atlas has partnered with Silicon Valley Bank(SVB). SVB provides a zero balance account with no maintenance fee for 2 years. In the following screen you will get an option to select the administrator for the SVB account

SVB administrator

Step 6: Enter your credit/debit card details:

You will be presented with a stripe checkout popup where you can enter your card details. You will we charged $500 USD only after the successful incorporation of your company. After the payment you’d get a prompt saying that your incorporation would be complete in one week.

Since Deducely was one of the initial pilot companies to be incorporated via the Stripe Atlas program we did not have to spend a dime to get up and running with a US company and bank account! Thanks a tonne Patrick, we owe you one!

Step 7: The application review process:

I am not sure if this is step would be applicable for everyone. A couple of days after we had submitted our application we received an email from stripe requesting us to furnish details like our estimated timeline, screenshots, Terms of service etc… and we showed them our screenshots and git account; after a few anxious days our application was accepted. I feel this is necessary steps to prevent abuse of this program.

Step 9: Digitally sign the incorporation documents:

After the review process is done and dusted, all the associated people in step 4 would receive an email with a link to a Docusign document. You can read the documents and sign. We would be able to proceed to the next step only when all the associated people have completed signing the documents.

Step 10: The AWS activate account:

After signing all the documents you’d get an email with a link to activate your AWS goodies. You’d get:

  • $15,00 in AWS credits valid for 2 years.
  • Access to AWS web based training (worth $600).
  • Access to AWS business support (worth $5000).
  • Access to AWS solution architects.

Step 11: Receive your incorporation documents:

After you digitally sign all the incorporation documents , wait for around 5-7 days to get your Delaware C corp incorporation certificate and your Tax ID(Employer Identification Number) from the IRS.

Step 12: Opening the SVB account:

Since we had given a PO box address in the US we were asked to give the physical address where our business is present. We emailed this to SVB and after 1 week we were granted access to SVB online banking.

This is the end of the incorporation procedure, here a few things to be done next

Next Steps:

1) Signing the stock plans: Stripe would email you a draft of a Stock agreements, get it signed by your board of directors. Stripe would also schedule a free 30 minute call with upcounsel – a law firm for clarifying any queries.

2) Sending funds to the SVB account: Ideally you can wire funds into your SVB account, but this is a tedious process involving a lot of waiting. We found square cash to be a convenient way to send cash into our SVB account. It takes 2 working days for the cash to show up in your bank account.

3) Getting a credit / debit card : You have funds in your SVB account and you want to pay for your hosting and other subscriptions, there are two options that I am aware of, the first method would be to apply get a business credit/debit card from SVB and get it delivered to your address. The second method is signing up at privacy.com. Privacy.com is a new age fin tech company that links with your bank account, through this service you can generate virtual VISA cards with fixed spending limits and close them whenever you want. We use privacy.com to generate virtual credit cards and track our spending. This service is free!

4) The Unofficial Stripe entrepreneurs Facebook group: If you are not based in the US and have a US based company , we have created an unofficial stripe atlas entrepreneurs group in Facebook . You are not alone here, if you run into any issues or need help you can ask other fellow atlas entrepreneurs for help.

Overall our experience with Stripe atlas was exemplary. Their support team always had our back; I’d like to give a huge shoutout to Anita from the Stripe atlas team, she was not only very knowledgeable but also very patient in replying to the barrage of queries that we raised every day! Ideally a service like this would cost you at least 800$ without the bank account and $15,000 in AWS credits. Stripe Atlas = A happy meal for company incorporation!

If you need any help or have any queries related to this post please reach out to me at aswin <at> deducely <dot> com

Guest Post by Aswin Vayiravan, Deducely

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India can’t afford the comforts technology provides. Here’s why

There’s a belief globally that we have a burgeoning middle class in India — and we’re following in the footsteps of China’s massive change from immense poverty to a stable middle class.

But that’s really not the case. There was a very interesting article onScrollsome time back explaining this.

According to the article, “China…saw its middle-income proportion go up from 3% in 2001 to 18% in 2011.” This growth in disposable income, coupled with technology, fueled growth in consumption, most probably with some visibility of profitability for businesses in the country.

In India this hasn’t happened.

“All those stories about India’s burgeoning middle-class have little to do with reality: India is, as it has always been, woefully poor.”

Instead, it seems that the major shift that’s happened is the really really poor are now just poor. And no where close to being determined middle class by any definition. The article does a good job of showing how middle class globally is defined.

Here are a couple of charts showing this move.

We don’t know how fast this low income bracket will start moving into middle income, but my guess is quite slowly. There is a lack of education, lack of opportunities, and lack of incentive for anyone in a position of power to do anything drastic about it. And even if we were motivated, these things take much more time in multi-party democracies like India vs countries like China.

If this is the reality, it’s going to be tougher and tougher for transactional business dealing with consumers (like ecommerce) that make money on delivery/logistics to grow in spite of this long term. Here’s why.

Today, the average take rate (the percentage of each transaction companies make to run their businesses) isn’t sufficient to cover costs related to the transaction. Yet, the take rate as a percentage of the cost of any one item is so high that it’s difficult to imagine most companies being able to increase it. On average companies charge a 10/15% take rate. How realistic is it that any consumer will be willing to pay 25/30/40% extra on top of the cost of an item? Probably not that realistic.

More woes

Photo credit: Lord Enfield

It gets worse. Logistics costs are going up. Believe it or not, ecommerce players have been lucky with overall delivery costs so far. They have spent on everything except their front line. And that’s showing. We’ve seen the repercussions of this at Flipkart already, and things are going to change really fast — starting with delivery staff salaries. So, even increasing take rates (as unrealistic as that sounds) will only help maintain present losses.

Seems like an impossible problem to crack, right? Well, it gets worse because scale doesn’t solve the problem. All these businesses need a substantial offline operational capability. As a result, they get little benefit from growing because they keep needing to add people, delivery centers and other logistics related costs.

And now, to top it off, they’ve been marketing to a middle class that is significantly smaller than was originally imagined. Most people can’t afford as much as online companies need them to — meaning the size of every transaction is only going to get smaller. And since take rates mostly work as a percentage, they’re going to reduce. In fact, it’s very possible that the take rate percentage itself will be under pressure to reduce. And all the while, customer expectations on quality service and delivery will remain the same.

So how do you make up the income? Ad revenue? How realistic is that ad spend in the country will go up any more than marginally anytime soon? How realistic is it that any ancillary revenue streams will make up enough of the short fall? Seems far fetched to me.

It’s actually really unfortunate. There are so many businesses that we truly need in India, but the majority of us can’t afford for them to be as efficient as they are today. How long will this gap in affordability and convenience be funded by private equity? My guess is — not long enough. (But as a consumers, I’m going to enjoy it while it lasts.)

From what I can tell, as bad as the margins are for these businesses, this is the best they will ever be. And that’s scary.

Guest Post by Sid Talwar, Partner at LightBox Ventures

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5 Signs you need a SaaS based Cloud Payroll Software for your Startup

Startups are natural transgressors, but payroll and HR is one area where a startup simply cannot afford to break rules. Entrepreneurs of startups may have to come up with disruptive ideas if they want their enterprises to be listed in Fortune 1000, but there is one particular area, where entrepreneurs of startups certainly would not want to break the rules: HR and payroll.

5-Signs-you-need-a-SaaS-based-Cloud-Payroll-Software-for-your-StartupStartups that fail to comply or neglect HR and payroll laws are often slapped with stringent financial and legal consequences. In fact, some penalties are so stringent that they can throw the entire business off track. With that being said, here are five common yet biggest HR and payroll mistakes that startups commit and why it’s time to embrace a mobile payroll app or cloud-SaaS based payroll software.

Mixing Business and Personal Finances

During the initial days, a business banking account may seem pointless for a startup. This is because a startup in its initial days hardly makes any money and for most of the entrepreneurs of newly launched startups, it is pointless to pretend that they are paying their employees with the company and not from their personal pockets.

Such a thinking in particular can have grave consequences in the long run. Eventually, a startup would need to separate all the expenses and repay taxes.

In case the startup is audited or sued, the blurry discrepancy of business and personal finances can render the entrepreneur’s personal assets vulnerable to seizure by the court. To make it worse, the startup might even lose its corporate status. Unfortunately, most of the startup founders are of the notion that this won’t happen to them, but it does and quite often.

Thus, to keep away from legal hassles during such untoward incidents, payroll software for startups is your best bet.

Relegating Employees as Independent Workers

Treating or misclassifying your employees as independent contractors or workers when in fact they ought to be legally regarded as employees is one of the gravest mistakes that startups commit these days. The major reason of doing this is that they don’t have to pay insurance, overtime or taxes for independent contractors. Also, they don’t have to bear other contractor benefits.

Misclassifying is quite common among startups, where several entrepreneurs practice the “try before buy” recruitment technique. It is one of the biggest human resource management mistakes that owners of many startups commit resulting in increased employee turnover rates.

Nevertheless, if you are still relegating employees as independent workers, then it’s advisable to have an automated SaaS based mobile payroll app or cloud based payroll software for startups that can sort out or distinguish payroll and all other independent contractor benefits from what is offered to employees in your company.

Attempting to Manage Compliance and Payroll through Spreadsheets

Payroll undoubtedly is a complex and tricky process, most of the businesses especially startups screw at it often only to be penalized for compliance violations by using spreadsheets. This is the reason many businesses resort to employing some or the other kind of payroll service.

However, startups require compliance such as compensation, healthcare, employment insurance, etc. These are mandatory in almost every state. Compliance overheads even in a freshly launched startup can escalate quite fast.

Thus, many tech-savvy startups make use of cloud based HRMS and payroll software for startups instead of spreadsheets to manage their payroll and compliance. A mobile payroll app helps to manage payroll for a startup including a range of taxes whilst ensuring compliance with all the necessary insurance and other stuffs as well as reporting.

Over/Under Paying Employee Benefits

With the startup competition getting fierce with each passing day, recruiting and retaining best talents has turned a lot more difficult and challenging. Thus, you must offer amazing employee benefits to retain the best talent pool that can drive your startup.

A cloud payroll software for startups can be of great help here, because a mobile payroll app with its excellent automation functionalities computes accurate figures to be administered as benefits thus, ruling out odds of human errors paving way for redundant and error-free benefits payouts.

Being SaaS based makes it scalable thus, startups don’t have to spend a fortune making it budget-friendly. It eliminates the cumbersome paperwork that goes into filings and benefits administration for your HR and payroll department saving them time and efforts.

Frustrating their Employees with Endless Paperwork

No one likes paperwork and startups are no exception. Yet, a number of businesses are still stuck in ice-age, as they use outdated HR practices or legacy software.

As we are living in the 21st century, gone are the days of asking your employees to filling out forms and email or fax them to the respective departments. Several businesses are making use of payroll software for startups to automate this entire process making it easy for both HRs as well as employees. A mobile payroll app helps a startup to go paperless when it comes to carrying out payroll and other key HR processes.

So these are five signs a startup needs to shun those legacy HR/payroll software or practices and embrace a cloud and SaaS based payroll software now.

Guest post by Anwar Shaikh writes about HRMS solutions and Payroll Software. A self-made, reared-up writer, Anwar is a wannabe Cloud evangelist and has a great penchant for cloud SaaS and automation technologies, SMAC, CRM, ERP and human resources. 

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How IndiaStack can bridge country’s digital divide

IndiaStack can enable the government, the citizens and entrepreneurs to interact with each other through an open digital platform.

At a time when financial technology is changing the face of Indian banking, the government is looking to bridge the digital divide.

The biggest hurdle here is paper-based authentication and approvals. To bridge this gap iSpirt is working with various government agencies to develop IndiaStack.

What is IndiaStack?

IndiaStack is a paperless and cashless service delivery system being conceived by a digital think tank iSpirt. It can enable the government, the citizens and entrepreneurs to interact with each other through an open digital platform. It is the largest application programming interface that is being developed in order to enable 1.2 billion Indians to get access to goods and services digitally.

When was it started?

It was conceived by the government of India in 2012 when they realised, in order to help services reach the last mile of the Indian population, it needed private technology solutions to be built on the Aadhaar database. The project is being pedalled forward by Nandan Nilekani the ex-chief of Unique Identification Database Authority of India, who describes it as the “Whatsapp moment for Indian banking”.

Why is it essential?

The government has been striving for a less cash economy to prevent pilferages and last mile connectivity of financial services. While the Aadhaar database allows users to complete all KYC requirements, there is still a gap in getting approvals because of the need for a signature on paper.

IndiaStack will be able to bridge that gap through its digital lockers which will allow for digital signatures and seamless API (Application programming interface) integration for authentication through eKYC.

How will it be designed?

IndiaStack is conceived as a pyramidal structure based on the Aadhaar database as the base and unified payments interface (UPI) that is being developed by NPCI (National Payments Corporation of India) as the top. The two middle stacks comprise digital signatures and eKYC.

Nilekani has explained that with the help of digital signatures customers will not need to actually sign a paper document, instead it can digitally sign it by using a smartphone. eKYC will also enable the identity of the customer to be determined digitally as well.

How will it be beneficial?

The biggest benefits could be completely digital payments through the UPI infrastructure for a less cash economy. Also, loan approval through eKYC and digital signatures could be done faster in a paperless fashion. Both these steps can bring people without access to digital payments to come within the digital fold.

Republished from ETTech