Posted on

85 Things I learned being a CEO

  1. It is going to be an extremely hard job. No amount of preparation or education is going to prepare you for what it demands.
  2. You will feel like quitting at so many instances. Don’t, just persist.
  3. It’s a lonely job. There will be no one who you can tell everything about your work.
  4. Uncertainty is the hallmark of entrepreneurship. You have no guarantee that you will last a year, at times a month and sometimes even a week. Learn to embrace this uncertainty.
  5. You will wake up crying at times. Don’t fret about it, deal with it.
  6. If you are married, your spouse will play a very crucial role. They are going to be the only person who you can tell everything. They can give you the third-person view to take unbiased decisions. They are going to be your rock when you are the lowest.
  7. Being a CEO is all about transitioning from doing everything in the early days of the company to delegating everything as the company matures.


Key Responsibilities

  1. You are going to make a lot of decisions in the company. If you are overly careful in your decision making you will slow down the growth, if you are too impulsive you will end up taking the wrong decisions.
  2. Setting the vision and talking about it is your responsibility. You cannot crowd-source the vision from your team. You must listen to everyone but at the end you set the vision.
  3. You define the culture and most importantly you guard it. People will ultimately emulate what you do.
  4. As a founder-CEO it’s your number 1 duty to ensure that the company never runs out of money.
  5. CEO should always be involved in the product. You can go away from any other function but not product.
  6. The success of your organization depends on how well your team is equipped. No one comes knowing it all at the job, it’s your responsibility to ensure that you train everyone.

Decision Making

  1. You will never have the complete information that you need to make decisions. Your gut/hunch will play a big role in such situations.
  2. It may sound counter-intuitive but gut-thinking can be developed. Great founders take right decisions not because they have all the information but because they have vast amount of knowledge. That’s what constitutes the gut-thinking.
  3. You will be wrong more often than you will be right. The trick is to detect your mistakes early, learn from them and never repeat them.
  4. You must stand by the wrong decisions you make. People will respect you if you are willing to accept your mistakes.
  5. Take time to explain your decisions. People around you need to know what is the thought process behind your decisions.
  6. Don’t fall in the trap of over-deliberation. Most of the times speed is more important than the right decision. You will always get time for course correction later. Good is better than best.
  7. There will be times when you are going to take decisions that nobody will believe in. If you have 100% confidence in yourself, go forward unabashed, because no one else has the full picture other than you.
  8. When taking strategic decisions, step out of your day-to-day operational work. Decompress completely. Swipe the board clean. Forget everything that’s going on currently. And then think about whatever you want to think. Think, how your future will change if you take this decision and not what benefit your present will get out of it.
  9. There will be some decisions that can significantly alter the direction of the company. You can’t always white-board a conclusion out of them. At times, you need to mull over them, you need to let serendipity happen.
  10. All good decisions seem obvious in hindsight because it’s easier to explain a chain of events, rather than predict one. Don’t mistake yourself in believing that you have found a pattern.
  11. For decisions like letting a misfit go, shutting down a product line etc. it’s always better to do it sooner rather than later.

Culture

  1. You are the guardian of the culture. You define what is to be appreciated and what is not acceptable. If you don’t do it ardently you are fucking up the culture.
  2. It’s always easier to hire people who believe in your culture than to try and convince non-believers. If someone doesn’t fit your culture, don’t hire them no matter how good they are on skills.
  3. You have to speak, shout, repeat, chant, recite and roar about your culture. Culture becomes culture only when it’s spoken about all the time.
  4. There is no definition of what a good culture is. More than being Utopian it has to have universal resonance.
  5. Your culture is never set in stone. The basic tenets will be defined but the shape and form of culture will rapidly evolve as the company grows.
  6. A good culture must breed 2 things — respect for each other’s work and open communication.

Leadership

  1. Soon you will realize the impact you can create through your individual contribution is meaningless when compared to the impact you can create by leading people.
  2. The best way to lead is to lead by example. A good leader tells you how it’s done, a great one shows you how.
  3. As a leader, the biggest thing that you can give your team members is your time. A lot of them will go through a bad phase or will be clueless about what to do. At those times, they need to know you are there.
  4. People will look up to you. At times, even for things in which they are far more skilled than you. You don’t have to take their decisions, just provide them your confidence so that they can take their decisions.
  5. Good leadership is when people are not afraid of bringing bad news to you.
  6. Politics starts at the top, if you start taking sides, everyone else in the company will too.
  7. In no situation can you afford to shout at your people. Things will go wrong, you will loose your calm, you can be stern with them but not disrespectfully shout at them.
  8. People need inspiration. To be a leader you will have to inspire them and it’s best if you do it by story-telling.
  9. Talk to/address the entire team at regular intervals. The format and frequency depends on you. It could be for 30 mins every week or 3 hours every month. I do an ‘All Hands’ every month. It has been 3 years and the All Hands has always had above 80% attendance.
  10. Very few employees are going to critique your decisions, particularly if you are a vocal leader. It’s very easy to get blindsided because you will rarely get a critical feedback. There are two ways to mitigate it a) have a close network of advisers who can say harsh things to your face b) consciously create a culture where people are not afraid of you.

Self-Management

  1. The first thing you need to learn is how to manage your time. Your time is a scarce resource, you must be very protective about it. Say no to anything that doesn’t add value.
  2. Learn to manage emails. No matter what communication tools yor organisation uses, you cannot escape emails. This particular trick has been extremely useful for me in managing my inbox — https://blog.hubspot.com/sales/email-multiple-inboxes#sm.000a54r0d14a2ct5r3d1yoluod5vf
  3. Manage your calendar — every Sunday spend 30 minutes analyzing your calendar for the week.
  4. Learn to manage your cash-flow situation. You need to keep track of the following every month — cash outflow in the month, revenue collected in that month, money spent on salaries and money in the bank. Setup a process so that you receive this information regularly.
  5. Every thing that goes on in the company will come to you. Very soon it becomes over-whelming to manage this information barrage. You need to learn to deal with it.

People Management and HR

  1. Hire a HR early in your company. 30 employees is the right stage to hire a HR.
  2. The sooner you introduce an objective performance management system, the better it is. In the early days you know about what everyone is doing, but as you grow you will loose control. The right stage for introducing a formal process is when you are 40–50 employees.
  3. One on Ones are absolutely critical. Ensure that you do one-on-ones, at least once a month, with everyone who directly reports to you and so do the other leaders in the company. In his book ‘High Output Management’, Andy Grove talks about the right way of doing one on ones.
  4. Set Goals — Every employee needs goals in order to contribute effectively. Most of the time people don’t under-perform because they don’t want to work but because they need direction. A quarter is the right time frame to set goals.
  5. Providing Feedback — Provide both negative and positive feedback with the same demeanor. It’s very important to come prepared when giving feedback. Provide negative feedback not based on your feelings but based on facts. Don’t use the Sandwich Approach, discuss the positives and the negatives as is.
  6. Just providing negative feedback is not enough, it’s your duty to also provide them a direction on how they can improve. If you are feedback is not accompanied by how they can improve then you are wasting their time.
  7. Appreciation — Everyone needs appreciation, do it often. Appreciate people at the time they do well (don’t save it for later) and be genuine when you appreciate.
  8. People don’t leave because they are underpaid, they leave because they feel you haven’t been fair. You are not supposed to compete with the best paymaster out there, but you do the best you can and they need to know that you are being fair.
  9. Setup an on-boarding process. When the company is small it’s easier for people to understand everything happening in the organization. Once you are beyond 30 it can be daunting for a new employee. Setup an on-boarding process where they get introduced to the product and people.
  10. Set a rigorous reporting process: Having access to the maximum amount of information across organization is going to be your biggest asset. As the organization grows you will find extremely hard to get all the information. You need to set up a rigorous process of updates with your direct reportees. Every function head should share updates with you in-person as frequently as every 14 days.

Meetings

  1. Whether you like it or not, you will have to do meetings. The point is how to make sure that your meetings are productive. There are only 2 types of meetings that you should attend — a) where you have to take a decision b) where you get updates/information. The productivity of the first depends solely on you and the latter on how you have trained your team. Step out from any meeting where you are not going to take any decision and you are not getting information you already don’t have.
  2. In his book High Output Management, Andy Grove talks about the concept of ‘Chairman of a meeting’. This is the person who is going to lead the meeting, facilitate discussions and take decisions. You will be the chairman for a lot of meetings as a CEO. If you are not going to prepare for these meetings you will waste everyone’s time. As a rule of thumb for a 1 hour meeting, you must spend at least 30 minutes in preparation.
  3. You don’t have to take charge of every meeting. As founder, you would be tempted to do that in any meeting you are part of. Refrain!
  4. Explicitly ask people if you are needed to be part of a meeting. Wherever you are needed, ask them for an agenda and also ask what is expected from you in the meeting. Else say no.

Hiring

  1. No matter how careful you are, you will make wrong hiring decisions. There is no definitive science for interviewing so don’t beat yourself up for wrong hires.
  2. Add a layer of objectivity in hiring. Every role should have some form of objective evaluation, like a task.
  3. Don’t interview people on what they have done in the past, interview for the role they are coming in for.
  4. Go prepared to interviews — put down a list of questions that you definitely need to ask. You don’t have to ask them in any specific order but you must ask all the questions.
  5. Ask your interviewers to give a Yes, Weak Yes or No. If there is a single No then don’t hire. There should be a majority of Yes in the verdict.
  6. Ask people where they screwed up in the past. Their failures will tell you more about them, than their success.
  7. Set an interview target for yourself — commit to doing at least 15 interviews per week in the first 2 years.
  8. Don’t look for patterns, there are none. Some people are good at giving interviews some are not.
  9. You need to create a circle of people (not necessary everyone in the company) whose loyalty is unshakable. These are the people you will rely on when shit hits the ceiling. Look for this trait when hiring key people.

Fundraising

  1. Whether you like it or not you are always fundraising. Practice the pitch incessantly, so that you can pitch anytime, anywhere.
  2. Fundraising is not a milestone, it’s not an achievement, it’s just a necessary evil.
  3. Fundraising is about story-telling. More than facts, investors are interested in your story.
  4. Choose your investors carefully. These are the folks with whom you are going to take some of the toughest decisions for your company, you want someone you can play with.
  5. Choose friendly terms over extra money. It’s okay to get half a million less in the bank if you can get less restrictive terms.
  6. You don’t raise money when you need it, you raise money in the good times, and as soon as possible.
  7. Raise as much as possible. Your company can fail because of reasons completely out of your control. Having a war chest at that time could be invaluable.
  8. Become immune to rejection. Most of them will turn you down not because you are not good but because they don’t understand what you do. 99 rejections are worth it for that one who says yes.
  9. Don’t let fundraising get over your head. It’s your number 1 duty but not your only job. You can’t compromise with running the company just because you are fundraising.

Things you should do

  1. Read voraciously, set a target to read at least one book a month.
  2. Network — In the early days of the company meet as many people as you can. In the later days of the company, choose who you want to meet and reach out to them.
  3. Take holidays — don’t feel guilty about it, you need it more than anyone else. Take spontaneous and frequent holidays, you will be amazed at the kind of thoughts that will come to you when you are relaxed.
  4. You will have to do a lot of public speaking — internally to your employees and externally to the world. Rather than being forced to do it, do it consciously. Practice before every major speech.
  5. Your job is to protect the downside of the company. The upsides will anyways take care of themselves. You should be constantly sniffing for what can go wrong.
  6. Exercise — Being a CEO will take a massive toll on your mental health. One way to keep your sanity is to exercise. Make it a habit to exercise at least 5 days a week (you can pick a sport).
  7. You are always negotiating — negotiating with your investors, your clients, your employees, prospective hires and everyone else. Master the art of negotiation, at the end it’s all give and take.
  8. Every time you say ‘Yes’ to something, you will be saying ‘No’ to something else. Choose your ‘Yes’ wisely.

Guest Post by Sachin Gupta @ HackerEarth. Original Post can be seen here

Posted on

eKYC – Know Your Customer unassisted using Aadhaar, OTP and Face Biometrics

Context

Know Your Customer (KYC) is essential for obtaining Financial, Healthcare, Insurance, and Telecom services around the world. In the Indian context, until Aadhaar opened up its APIs, KYC was a laborious process costing billions to services providers and inconveniencing customers with a mountain of paper identity documents. The thoughts here are confined to the Banking sector but applies to other sectors equally.

eKYC “assisted”

With the advent of electronic KYC or eKYC using the Aadhaar biometrics platform, things haven’t changed a lot. It certainly has reduced paper documents. However, eKYC is still done in “assisted” mode – meaning either the customer has to be present at the Bank or a Bank Executive has to reach the customer to collect the biometric data. Besides, in most Banks, a paper trail is still maintained despite the biometrics data – reasons best known to themselves. What was costing the Banks earlier is what is costing today – perhaps more with the new biometric devices and the cost to maintain them.

eKYC “unassisted”

The Reserve Bank of India (RBI) took a significant step in December 2016 to allow opening of deposits and borrower accounts using OTP based eKYC, albeit with some restrictions (RBI notification on 08 December 2016, Chapter VI – Customer Due Diligence (CDD) Procedure – Clause 17 and 38 amendments). This has opened up the opportunity to provide this service to customers at the comfort of their homes at a vastly reduced cost to Banks. This would satisfy the two-factor authentication needed by RBI and would suffice to open an Account. However, with increasing volumes (500 million eKYCs projected for 2020 by UIDAI), and the possibility for this service to be abused through third party fraud, this would need additional authentication to ensure that the person completing the transaction is who he really says he is (as close to a physical check).

eKYC “unassisted” with three factor authentication – Aadhaar, OTP and Face Biometrics

To solve this particular problem, FRS Labs rolled out the “Atlas eKYC” solution – fully integrated with Aadhaar – with face biometrics as the third factor of authentication (watch the 60 second video here). While the face is captured by UIDAI as the third biometric element (fingerprints and IRIS being the other two), RBI has not mandated the use of face for biometric authentications – for reasons that face is considered not as unique as fingerprints and certainly not IRIS – and the false acceptance rates (e.g. twins) could be high and that people’s faces change over time – but as always research contradicts this notion and there are plenty of evidence to prove that face is a reliable biometric feature. And it can only get better.

Notwithstanding, RBI has not specified that face could not be used if a commercial organisation wishes to do so as additional factor of authentication to protect their businesses and consumers, so long as the mandatory 2 factor authentication is in force. In a similar tone, RBI has not ruled out authenticating customers using their voice (another biometric element not in Aadhaar). ICICI Bank and Citibank have rolled out voice biometrics to authenticate customers to call centres is a case in point – It is still two factor authentication (the registered mobile phone as the first factor and the consumer’s voice as the second factor of authentication). Therefore, there is a great opportunity here for Banks to provide face biometrics as the third factor of authentication for secure “unassisted” OTP based eKYC without the need for biometric devices. I can only begin to image the convenience for consumers and cost savings for Banks.

Author: P. Shankar – Founder & CEO of FRS Labs.

Posted on

Freemium Model for SaaS – The Good, The Bad, and The In-between

In 1999, Vistaprint, a four-year-old French startup, launched its internet-based printing services in the highly competitive US market.

Going against the popular advice to target the bigger companies (who would spend more money on printing), the Vistaprint team went for the micro businesses (who were then considered as a terrible market, as they were close to impossible to reach).

To tackle that, the Vistaprint team came up with a direct marketing strategy, which turned out to be a runaway success, becoming their core acquisition flywheel in no time.

And, it’s simpler than you think.

Basically, this was their offer: Customers could get 250 full-color business cards (that were being sold for about $85 online and about $200 to $300 offline, in those days) printed for free, and pay just a nominal charge of $5.67 for shipping and processing.

They could place this order as many times as they wanted, and Vistaprint would fulfil it for them, under a few conditions:

● The free cards will be printed only using one of a set of 40 designs

● It will take three weeks to deliver them

The customers who wanted a different card design, or wanted to get their cards delivered faster, would have to pay a premium price.

This strategy, that worked wonders for the printing company (which had about 17 million people individually buy from them by 2009), lies behind the freemium model in the present-day lexicon.

(Note: If you’re new to the freemium concept, head over to this post that outlines what the freemium model is and how it works, and then get back here. We’ll wait for you.)

However, all is not perfect in the freemium fields.

Even though a plethora of SaaS success stories including SurveyMonkey, FreshBooks, and Prezi have managed to make the model dance to their tunes, we can quote an equal number of accounts where businesses have fallen prey to its deceptive allure – Baremetrics, Ning, and Bidsketch, to name a few.

So what’s the deal with this elusive model? What does it take to win over it?

When does the freemium model go wrong?

VistaPrint already had a full-fledged card publishing and manufacturing technology in place, when they started providing business cards for free. Thanks to the economies of scale, the more cards they printed, the lower their manufacturing cost.

As you’d probably know by now, the basic premise that the freemium business model operates on is this:

Several hundred thousands of users sign up for the freemium plan, and then a good cohort of them will convert into paying customers.

“The easiest way to get 1 million people paying is to get 1 billion people using.” – Phil Libin, CEO of Evernote

So for the freemium model to work out, one specific product attribute must already be in place – low marginal distribution and production cost. Only if you can keep the cost as low as possible, an additional free user will cost you nothing more than a database entry.

SourceMicrosoft, in one of their whitepapers, showing how the cost plummets with quantity

Although this is an inherent characteristic of SaaS products (as shown above), if you’re not careful enough, your freemium pricing can still go completely awry.

The number road to failure is pretty straightforward: Keep investing in more and more infrastructure to handle new users, without generating additional revenue (or having a backup plan) to offset the growing cost.

A majority of websites that sell downloadable content fall under this category. These businesses don’t charge their freemium customers and rely solely on ads for revenue. So when they can’t make enough money from the ads, every new freemium user will exert a bit more strain on their existing infrastructure, to ease which, they will have no other option but to augment their resources.

About 11 weeks after having launched their free plan, things were looking positive for the Baremetrics team – over a 1000 free accounts had been created, of which the eligible paying customers sported a conversion rate of about 11.5%.

And over a period of two years, their free users outnumbered their paid customers, and they found themselves grappling with increasing server and performance issues. The result? More dissatisfied customers began leaving them, because of the “down time, delayed data and inaccurate metrics”.

Source“Our free plan was causing our business to slowly implode.” – Josh Pigford, Founder, Baremetrics

Countless such services have gone under because they weren’t able to bear the weight of the overwhelming scale of operations, both financial and infrastructural.1

But, that isn’t the only reason that leads SaaS businesses to succumb to the dark side of the freemium model and shut shop (or pivot, if they’re smart).

Had the Baremetrics team restricted the data import/export for the free users, they could’ve saved up on the server usage, and have in turn strengthened the reason to upgrade.

Here’s our next SaaS example, Bidsketch’s free to paid conversion rate over the weeks:

SourceFrom “Great!” to “Grmph.” to “Grrrr!”

What’s happened here is a textbook example of how the different kinds of adopters operate as per the “Diffusion of innovations” theory.

The real game begins after you move past the Early Majority adopters

Once the Early Majority customers have moved up the pricing ladder, the conversion rate starts tapering down, as the Late Majority and Laggards are more averse to change. The trick is to keep innovating and adding more value to your premium plan, thereby nudging them down the conversion funnel.

Summarizing this section, the main reasons that contributed to the failure of the freemium model in these businesses are:

● Not having a business model that’s cut out for freemium, where every new user puts more pressure on the existing resources. Adding to that – under such circumstances – not having been equipped with a solid strategy to accommodate the growing load.

● Not striking the right balance between your freemium and premium offerings – if the freemium plan isn’t attractive enough, then you won’t attract new users, and if the freemium plan is too heavy, then the new users won’t move to the premium plan.

● Not communicating well to the free users, a straightforward and solid benefit of upgrading to a paid plan.

● Not constantly hitting on the innovation pedal and making your premium product more and more lucrative, to convince the users in the Late Majority and Laggards categories to upgrade.

When does the freemium model pay off?

1. A DIY product/service, where the cost of servicing a new customer is close to nil. These are the businesses that are designed for the freemium model by default.

SaaS examples: Massive Open Online Courses (MOOCs), Webflow.

This business model accommodates the main ingredients that were missing in the previous section – economies of scale, and low marginal cost.

While MOOCs incur an initial significant fixed cost on course development, contrary to a regular classroom, they don’t have a restriction on the number of students. So a $500,000 fixed cost will be brought down to about $5 per student, if 100,000 students enroll for the course.

Also, the marginal cost of serving an additional student can also be brought down to $1 per student, as there’s no personalization of the service, the product doesn’t have a steep learning curve, and a community-based support will suffice.

The premium plans usually consist of certificates from reputed universities, and according to Daphne Koller, Coursera’s co-founder, they’re able to monetize around 20% of the total registrations.

Moreover, a majority of the students drop out mid-way, thus lowering their streaming cost (their biggest marginal cost). Only around 10-20% students make it to the final exam, and they are the ones who will most likely be interested in paying for certificates.

Now these aspects aside, the other deciding factor for the success of your freemium plan is your value metric.

Check out Webflow’s pricing for instance.

An attractive freemium plan + an even more appealing paid offering = a very satisfied cash register + an even more satisfied customer

These guys have nailed it in coming up with a super compelling reason to upgrade – they have used the collaboration feature (they call it the Team Dashboard) – one of the fundamental activities of website building – as the value metric.

This ingenious move set them up for success, and it wasn’t as easy as you think it was.

Only when you have a crystal clear idea about your customers’ Jobs to be Done (JTBD), will you be able to pinpoint the exact feature that will deliver the ultimate value for the price that you’re charging them.

So if they get a freelancer web developer on board, Webflow can either have them in the freemium plan, or they can make a decent sum of money in the Professional plan, and the moment the freelancer grows into a company of at least 2 members, they directly take them to the Team plan and charge them $78 per month.

The product is designed in such a way that it keeps track of the IP addresses; you can’t log in with the same ID more than once, and you won’t be allowed to view the same folder. For a user who is thoroughly impressed with the product, and is looking to collaborate, these enforcements act as a natural motivator to upgrade to the higher tier.

Which highlights the next factor: it all comes down to how irrefutable your offering is to the customer, and how effectively it gets their job done.

2. Businesses which deliberately try to assimilate and absorb the cost of operations, support, and service, to have a freemium model up and running.

Now why would anyone do that, you ask? Well, for one or more of the following reasons:

● When you’re having your freemium plan as a differentiator in the market.

About 75 startups were already operating in the American market when VistaPrint set foot on it. Millions of dollars were being raised by e-printing companies, and the competition was cut-throat. And they counted on their strategy to target a different market and to offer a freemium deal to give them a spotlight.

SaaS example: SALESManago.

This Polish marketing automation startup knows what it’s up against – giants like HubSpot, Pardot, and Eloqua. And that’s precisely why they double downed on nailing their pricing strategy, to stand out from the crowd of Goliaths.

Notice how the 0’s stand out in the collage of screenshots with numbers strewn all over them? There you go.

And they seem to have done a great job at it. This February, they have raised about $6 million, following a 200% growth over the previous year,  2015.

Let’s examine their pricing plans for a moment – clearly segmented free plans, each with their own specific set of benefits, and the introduction of a premium plan only when the customer’s business grows large enough to integrate and automate the marketing activities. Just like Webflow, it is evident that the SALESManago team has a thorough knowledge of their customers’ JTBDs and pain points that they’re solving.

The result? The customers get an offer that they can’t refuse.

● When you’re employing your freemium plan as a free branding tool.

Wait. The VistaPrint team didn’t have just two conditions attached to their freemium offering. There was one more. Apologies for missing it in the introduction.

Yet another tactic of theirs is that all their free cards will have “Business Cards are FREE at VistaPrint.com!” printed in small fonts at the backside bottom. Those customers who wanted to get the line removed, will have to pay.

SourceViral branding at zero cost – Check.

SaaS examples: Zendesk and Typeform

At the time when they had just launched, Twitter was Zendesk’s highest referrer. Zendesk had a freemium tier back then, where they’d brand the Help Center’s URL. So everyone who was on Twitter and had to get in touch with the support team had to do so via twitter.zendesk.com. Easy, free, referral program to earn new customers!

Typeform does that at present. With the “Powered by Typeform” signature on the bottom right corner of the free forms.

SourceWant to replace Typeform’s brand with yours? Become a PRO!

If just by including a line at the bottom or by adding your brand name to the URL, you’re able to generate ample volume of new users through your existing customers, why would you mind giving it away for free? The cost that you incur because of the freemium plan can then be brought down under your marketing costs.

● When you’re having your freemium product to market your paid product

VistaPrint’s objective was clear. They wanted to sell anything and everything that will help their customers to brand their own businesses – brochures, presentation folders, stationery, apparel etc, and printing business cards was the starting point to get there. Give away business cards for free, and use them to market/sell your other paid products.

Even though this particular category doesn’t fit the textbook definition of the freemium model, the underlying intent is very much aligned to that of the model. And the SaaS world has a name for this: Side Projects.

SaaS examples: Crew and Intercom

When the Crew team was running low on money and were desperate to turn the tables, they created Unsplash, a website that curates and gives away hi-resolution stock photographs for free. The results? Unsplash was (and still is) the number one referral source to Crew, that brought in around 5 million unique visitors.

Mikael Cho, Crew’s founder, quotes Jay Baer to back his faith in side projects (they have since developed a truckload of free side projects – 13 to be precise).

“Due to enormous shifts in technology and consumer behavior, customers want a new approach that cuts through the clutter: marketing that is truly, inherently useful.” – Jay Baer, Youtility

Intercom does that too. Their free product? A customer intelligence platform.

In short, businesses that belong to these three categories, spend those extra dollars to sustain their freemium product, because they know that the free users are paying through one medium or the other –

● They will either use the product and allow it to become a part of their workflow, thus pay for it with their mindshare, or

● They will pay for it by marketing the product

How to find out if the freemium model is right for you?

There’s one school of thought that argues that freemium is dead and gone, and businesses must shift to the next big thing to stay afloat. Then there’s another side that vouches for the abundance mindset, where websites like Craigslist let people post ads for free, and still manage to earn $400 million. Both make sense, and both are equally right.

Vistaprint entered the US market just after the infamous dot-com crash, as a result of which they weren’t able to raise much money compared to the other bubble companies. And its founder believes that that situation, in fact, saved them; because they weren’t able to pool in investments, they had to operate leaner, come up with better strategies, and work harder to make a profit. And that set them apart from the rest of the venture-backed companies.

This is also the reason why they were able to go big with free products and over-the-top distribution strategies, which backfired for most of those latter companies; Vistaprint was clear about its customers and what they wanted, and in turn, the right fodder that will fuel its growth.

Ultimately, it all comes down to how well you understand the value that you’re bringing forth to the market, and how well it aligns with the freemium model.

Dan Martell sums it up in four crisp points, and says that you’ll have to get 3 of them right, to evaluate if the freemium model will work for you:

  1. The number of potential users in your market: The more, the better – remember, only around 5% of the free users will eventually end up paying you
  2. The specific market advantage required to win: What do you want the freemium model to win for your business? Is it a competitive advantage? Is it free distribution? Is it getting more referrals? And how realistic is this goal?
  3. The max complexity of your product and how it works: How simple and straightforward is your product? Does your offering set itself apart from the din around? Is it lucrative enough for your customers to ascend the pricing tiers?
  4. The specific cost each additional user can have: Is the marginal cost of serving an additional customer negligible? Can you ramp up your operations without shooting up your cost? Do you have the capacity to handle the exponential escalation in scale?

MailChimp launched their freemium plan after about 8 years of building a “powerful, affordable, profitable, self-serve product,” and after gathering and analyzing “tons of pricing data”, to justify the 10:1 ratio of free to paid users of the freemium model.

“The question to ask yourself is whether or not your “one” is big enough to pay your bills yet. For eight years, our company never thought about freemium. We didn’t even know the concept existed. For eight loooong years, we were focused on nothing but growing profits… … In other words, we’ve been laser-focused on the “1” side of that 10:1 ratio. We’d never consider freemium until our “1” was big enough. Enough to pay for 70+ employees, their health benefits, stash some cash for the future, etc.” Ben Chestnut, Co-founder of MailChimp

Guest post by Sadhana Balaji, ChargeBee. The blog was originally published here

Posted on

The Need for Product Thinking and Successes

“The role of a product manager is to discover a product that is valuable, usable and feasible.” – Marty Cagan, Partner, Silicon Valley Product Group

In a few simple words, this quote capture the essence of what this article is all about.

At a recent conference with several venture capitalists, product managers and executives from both corporates and upcoming start-ups, one of the VCs in the room asked, “212 Indian start-ups did not survive 2016. Investments plunged by 44.3%. VCs have started reviewing their investments closely and are being stingier when it comes to spreading their money too thin. How will you convince us and other stakeholders about your product and ensure that it succeeds?”

The answer lies within the approach to product management. Think about it! The lack of an efficient approach to product management is the root cause of start-up failure. Through a systematic approach, you can detect early enough what projects are likely to succeed in the long-term, and invest your time and money more wisely – as compared to investing in several short-term experimentative projects. This is the strategy employed by successful product companies, and if you look closely, a pattern tends to emerge in the practices employed by the best product managers, and these are:

  • Inside-Out Thinking Is a Big NO-NO
  • Building Long-term Sustainable Vision, Innovation & Roadmap
  • Evidence Or Insight-Based Decision-Making
  • Let’s deep-dive into these practices:
  • Inside-Out Thinking Is a Big NO-NO

Our existing products are a success -> The executives who built these products have an intuition that the new product is the next big thing -> Therefore, customers will definitely like our new product

This the basis of Inside-out thinking where the wrong reasons are used to decide which products should be invested in and developed. Some of the common inside-out situations are intuition that a product will work, pressure from CEOs, the assumption that customers don’t know what they want, the feeling that the product will definitely sell and so on.

It’s a clear violation of what we call the First Law of Product: Customer decide what products they like, not companies.

The best product managers employ customer-informed decision making and see these situations as warning signs when it comes to making product decisions.

Building Long-term Sustainable Vision, Innovation & Roadmap

A great product roadmap is a Product Managers’ secret weapon. Product road-mapping works best when you start with a long-term vision and strategy, prioritize the product itself over the features, and manage ideas smartly.

Not having a long-term visions and strategy is the fastest route to product management failure. All great roadmaps start with a vision and a strategy to achieve that vision, which keeps the various teams invested in the same shared success of the product.

Next is prioritization. One needs to prioritize the product over features. One that’s done, certain features need to be prioritized over others. It’s not that features aren’t important but that they are often secondary to the reason a customer or user buys a product.

Lastly, being able to say “No” is extremely crucial to developing a successful product. The best product managers are excellent at managing new ideas that come from the various stakeholders involved. There is no shortage of new and innovative ideas, and the best product managers know whether these ideas roll up to their product strategy or not. They consider all ideas, rank them against the product strategy, make a decision to employ them or not, and keep everyone informed about the “why” in their decision-making process.

Evidence or Insight-Based Decision-Making

A key component that successful product managers use to drive the product team forward with insights. This is critical because they help validate that the team is pursuing the right course of action. With real-world user data, customer feedback, and metrics on the product, one already has an excellent source of business intelligence to make the best decisions for the product. When asked why you’ve selected one direction over another for the next iteration of the product, your ability to present a compelling explanation backed by real data will go a long way toward earning everyone’s buy-in.

Key Takeaways

  • Every product organization will save significant money by investing at the right time for the right product initiative
  • End-to-end vision, planning and execution processes will differentiate product companies in the market place
  • A systematic approach to product road mapping and management drastically reduces the risk of product failure
  • Gathering valuable intelligence and insights from various stakeholders, customers and the market will go a long way in defining the success of your product.
  • The harsh reality of 2016 might just be the wake-up call that the start-up world needed, and our prediction is that 2017 is going to be a great year for Indian start-ups!

Guest Post by Mr. R.N. Prasad, Consultant at Manipal Global Academy of Information Technology (MGAIT). 

He comes with over 35 years of Enterprise IT experience. He has served various IT giants like Wipro, Satyam, IBM, INNOSOFT and Infosys in leadership positions. In his last corporate engagement, Mr. Prasad was the AVP, Education and Research at Infosys, and was heading the Business Intelligence and Analytics Practice. His other areas of focus and expertise include IT Product Development Management, and IT Strategy Consulting. Mr. Prasad is a Harvard Certified “Teaching for Understanding” practitioner and a Franklin Covey Gold Certified 4DX Coach.

Posted on

Disruption of Chit Funds and the Role of the India Stack.

Disruption of Chit Funds and the Role of the India Stack

Chit Funds are indigenous financial institutions in India. It is a mechanism that combines credit and savings in a single scheme. In a chit fund scheme, a group of individuals come together for a predetermined time period and contribute to a common pool at regular intervals. Every month, up until the end of the tenure of the scheme, the collected pool of money is loaned out internally through a bidding mechanism to the most deserving member. This way, people who are in need of funds and those who want to save are able to meet their requirements. Similar schemes have been known to be popular across the developing world, generally referred to as Rotating Saving and Credit Associations (ROSCA)

An interesting aspect of Chit Funds in India is that the industry is highly regulated and institutionalized. A Chit Fund can be either “registered” or “unregistered”. Registered Chit funds are organized by Chit Fund firms/companies and regulated by the Chit Fund Act. They are in essence impersonal contracts that depend on market forces. Unregistered Chit Funds which exceed Rs. 100 ($2) in chit value are illegal in India, although it is widely known that the unregistered Chit Funds industry is still very popular.

While no official or government estimates of the industry exist, The All India Chit Fund Association estimates that “the size of industry is Rs 35,000 crore, with the unregistered part estimated to be at least 100 times the registered one”

Value to the consumer

Prof Mary Kay Gugerty, in her paper, “You Can’t Save Alone: Commitment in Rotating Savings and Credit Associations in Kenya” argues that, “saving requires self-discipline, and ROSCAS provide a collective mechanism for individual self-control in the presence of time-inconsistent preferences and in the absence of alternative commitment technologies”

This conclusion, although based in data from Kenya, is also supported by the data collected in India, which suggests that 72.1% of consumers participate in chit funds(Estimate of Chit Fund Industry size) to save.  While 95% of these consumers have bank accounts(Reason for Chit participation : Table 3-7), they still prefer chit funds as a saving mechanism due to higher perceived returns, paperless documentation(Banking Details : Table 3-4), familiarity and doorstep service.

While the actual rate of returns (for savers) and cost of borrowing are highly variable based on a given fund, on average(Reason for participating in Chit Funds : Table 3-11) 6%-42% per annum(Rate of return calculated based on the cost of borrowing, assuming 5% commision, 10 people, Rs 10,000 chit fund and 1 borrower plus 9 savers. Cost of borrowing from Table 5-4 Outside Options – Interest Rates for Loans,)

Housewives and Small business owners are the two most prominent cohorts within the chit fund users(Figure 3-1  Frequency of Occupation based on Gender). Daily chits are popular with small business owners, presumably because it allows them to manage their daily cash flow and allows control over their interest rate when the need for a loan arises(Section 9, Chit funds and Small Business, Para 3).

The chit funds are also perceived to be liquid, Most consumers bid to get the pot when they had an emergency need or when an lucrative business investment came about(Reason for participating in Chit Funds : Table 3-11).

Finally 96% of chit members overall think that the Chit Funds they participate in are safe and about 85% of these chit members are loyal to fund company they are participating in.

Legal framework for Chit Funds

The Government of India passed the Chit Fund Act in 1982, with implementation of the Act left to the Registrar of Chit Funds in each state. This Act, it is relevant to note, contains many restrictions like a minimum Capital requirement (Section 8), prohibition of transacting business other than Chit Business (Section 12), a ceiling on the aggregate chit amount which is 10 times of the net-owned funds (Section 13), Utilization of funds (Section 14), security to be given for full value of chit (Section 20), a self-contained machinery for settlement of disputes etc and a number of penal provision for various defaults(All India Chit Funds Association submission to parliamentary committee), etc.. Notably there are stringent requirements on written formalities like notice to the customer, minutes of the meeting, record keeping and audit by certified chartered accountant(6(1), 15, 35, 40-Chit Agreement, 22(2)- Intimation to Registrar of deposits, 26(1), 34(1) Withdrawal of foreman 28(1) Removal of defaulting subscribers 33(1) Demand note 38(1) Minutes of the meeting).

The regulatory hurdles that the chit companies face due to the stringent rules proposed by the Government progressively, have been a setback to the growth of the industry. The effect of the increased costs of operations for the registered chit companies has been to push these companies ’underground’. Many companies have, in the recent past, either folded up or shifted their operations entirely to the informal arena becoming an ’unregistered’ chit fund(Chit Funds Boon to Small Enterprise).

Economics of running a Chit Fund

Apart from the capital and compliance requirements highlighted above, the key risk of running a chit fund is default. The default rates in the chit industry hover around a meager 1-2%. This is because the chit members are, in most cases, personally known to the chit managers(Section 5, Defaults How are they handled ? – Chit Funds Boon to Small Enterprises). Also,  Defaulters are sanctioned socially as well as being prevented from any further participation(Page 794, Paragraph 2, Economics of Rotating Saving and Credit Associations).

The key source of revenue for a Chit fund manager is commission which is capped at 5%. Alternatively the chit fund managers take the first installment in full. The chit manager can also generate revenue from float interest charges i.e. by disbursing the loan a month after the money is collected, he can earn the interest on the full amount(Section 7 : Sources of Income to the Chit Manager) 

Role of the India Stack

With the size and scope of the chit fund industry, as outlined above, it is clear that there is a large addressable market for innovators. What makes this opportunity more lucrative is the presence of India Stack. India Stack is set of technologies (primarily Aadhaar authentication, e-KYC, e-Sign, Digital locker and UPI) that together dramatically reduce the cost of transactions. For example, an analysis on the Mutual funds business indicated that by use of India stack, the  average transaction cost would drop from Rs 50 to Rs 2, making it viable for Mutual funds to go after the small ticket business.

Opportunities for Start Ups

Given the background above, following is the most promising opportunity for startups:

Organize the unregistered chit fund companies

  1. Hypothesis: With the recent crackdown on black money and tax evasion, it will become more difficult to run unregistered chit funds circumventing the law. This will give the unregistered chit funds incentive to become registered and follow the law
  2. Product: An easy platform that allows management of chit funds through mobile phone app/apps and make it compliant with the law
  3. Key Customers :  Unregistered chit funds
  4. Key Stakeholders : State Government, Unregistered Chit Funds, Users of chit funds
  5. Key activities:
    1. Build technology based on India Stack to meet KYC requirements, sign chit agreements using e-sign, transfer money between people using UPI and keep an account.
    2. Strong sales network to bring the chit funds onboard
    3. Product and legal expertise to liaison with the state governments and registered chit funds to build products that meets all requirements
  6. Need for funding:
    1. Initial product could be built with a relatively small investment
    2. Scaling with scale will likely need venture investments (but no access to large capital should be needed)
  7. Revenue generating activity:
    1. Pay per instance or per user from the funds
    2. Lead generation for Chartered Accountants
    3. Aggregate data reports could be sold
    4. Could also build a government facing interface for monitoring
  8. Competitive Advantage:
    1. No real competition at this point
    2. Network effects could become significant advantage
    3. Implicit or explicit endorsement from Government agencies
  9. Key Risks:
    1. Product adoption risk: The success of the idea is hinged on pressure from government creating the need, which drives adoption. In the absence which it will be significantly harder to move people from the familiar. The risk is somewhat contained because of a supreme court order directing government to act on this.
    2. Regulation risk: A parliamentary committee has recommended that the government revise the regulation. This means that government could do away with a number of provisions, making compliance much easier of chit funds thus eliminating the need for such a company. Again this is low likelihood event given the scrutiny on this sector
    3. Reputation risk: The company will have to be careful not to associate with chit funds with malicious intents. Being associated could result in penalties and damage to reputation.

Guest Post by Kunal Kashyap, IIT KGP graduate, Spent 8 years at Capital One, a US based Fortune 100 Fintech company. Volunteer for iSPIRT.  

Posted on

Strategies for MNCs Engaging with Start-ups in Emerging Markets

Strategies for MNCs Engaging with Start-ups in Emerging Markets

For large global companies, forging effective partnerships with high-potential start-ups is easier said than done. The very traits that make such start-ups potentially complementary as partners also make it difficult for large companies to engage with them in the first place. Multinational corporations often struggle event to identify promising potential start-up partners, while start-ups find it difficult to identify and reach the relevant decision makers within the often-confusing hierarchies of giant multinationals. The challenge is even greater for both sides in emerging markets.

To understand how multinational companies have partnered successfully with start-ups in emerging markets, CEIBS Associate Professor of International Business & Strategy Shameen Prashantham has co-authored a research study in three major emerging market economies: India, China and South Africa. The study focussed on non-equity partnering through start-up engagement programmes such as Microsoft’s BizSpark, IBM’s Global Entrepreneur Programme, and SAP’s Start-up Focus programme.

The research uncovered four key factors that multinational companies confront in such partnerships in emerging markets, and corresponding strategies that can help multinationals engage with start-ups in  emerging markets. The challenges and the strategies to address them are as follows:

Immature Entrepreneurial Ecosystem → Compensate for Deficiencies

Appetite for Entrepreneurship → Commit Resources to tapping the Entrepreneurial Energy

Outsider Status of Western Multinationals → Work with Local Groups

Access to Novel Innovations → Co-innovate with Start-ups

The findings also highlight the importance for Western multinationals to recognize differences among emerging markets. Different emerging markets have distinct national priorities, regulations, and differing scales of economic activity and entrepreneurship which will affect the strategies of multinationals. These things must also be taken into account if multinational companies are to succeed in creating mutual value for themselves and their start-up partners.

The results of the study are featured in the Winter 2017 edition of MIT Sloan Management Review which Prof. Prashantham co-authored with Prof. George S. Yip of Imperial College Business School in London. Read the article here.

Posted on

Action For India’s 6th Annual Forum invites FinTech startups

Action For India’s 6th Annual Forum invites FinTech startups
Just about two months ago, the nation attempted the massive ‘demonetization’ initiative at an unprecedented scale to clean-up illicit money and move towards greater economic equity and justice. As a consequence, the realm of digital money management and transactions saw a burgeoning growth and needless to say, this accelerated the vision of ‘Digital India’, the India where technology and digitization makes every facet of life for a common man, easy and empowering. This is becoming a global phenomenon as a recent report from Accenture found that global investment in FinTech has skyrocketed from $930 million back in 2008 to over $12 billion by the beginning of 2015.
Alongside digital payments, the nation also takes pride in harboring FinTech initiatives working wonders on the ground, in the areas of banking for the unbanked, micro-loans, credit-free schemes, micro asset-management, and a portmanteau of other technology-powered solutions/models that are serving the unreached. Recognizing these FinTech entrepreneurs, the 6th edition of Action For India Forum, is on a mission to help Indian social innovators overcome barriers to scale and achieve greater impact.
Though this exclusive invite-only event (taking place on January 24th & 25th, 2017 in New Delhi) that brings together 100 leading social innovators (with FinTech as one of the six sectors of focus) along with 100 “influencers” (from the realms of impact investment, philanthropy, government, technology and public policy), it aims to bring together a stellar set of handpicked start-ups and provide them with a platform to further partnerships, investment and growth. The applications to be a part of the esteemed Forum, are still open for all the promising FinTech startups.
The form can be found here: goo.gl/9xdqfn
It is at this event that the most promising social entrepreneurs are selected to be a part of a two-week all-expense- paid trip to Silicon Valley through the Silicon Valley Challenge (SVC).
You can find a post-event update on AFI’s 5th Annual Forum here: http://bit.ly/1U35zdE & details of the upcoming AFI Forum 2017 here: http://actionforindia.org/afi-forum-2017/.
You can reach AFI via email at afiforum2017@actionforindia.org or call +91-72040-24529.

 

Posted on

PAY-IT-FORWARD PARADOX… The More You Give, The More You Receive

PAY-IT-FORWARD PARADOX… The More You Give, The More You Receive

Ever noticed how the busiest of people are often the ones that find time more easily than others?

It is about making the time versus having the time!

When you make time despite busy schedules and packed days to share your experience and perspectives it helps so many people, definitely more than you could individually imagine. In the process though, you get so much back, more than you could individually imagine. And, I am not just talking about the ego boost you get from your audience, it is the whole process. Deciding what to share allows you to spend time reflecting, perhaps even researching. You learn and remind yourself of what you knew and could have forgotten. The prep certainly helps you articulate and verbalize your thoughts. When you hear your audiences’ perspectives, another learning opportunity. When you get asked a question you couldn’t answer at first, yeah, another learning opportunity. It is the gift that keeps on giving. You very quickly see that making the time to share your thoughts and experiences is a really good way to learn.

At Pensaar, we are crazy biased towards design thinking as a mind set and a process to innovate.

We are practitioners and have used design thinking in our own jobs to innovate and are able to share war stories, trials and tribulations from our experiences. Being less than 6 months old, this August we took on the arduous task of putting together the Design Thinking Summit. The first draft was a vision more than a plan. Here’s what was serendipitous… as we shared our vision, many good people came to support our vision.

NSRCEL-IIM Bangalore, Intuit, iSPIRT and YourStory gave us their support. Many friends and fellow practitioners gave us their time, ideas and mentorship. What was the result? 70+ people went through a 3-day experience of applying design thinking to a real problem and 250+ people spent 1-day in large discussion formats learning about design thinking from each other.

It was truly inspiring and motivating to see so many people pay it forward, we were blessed to have that kind of support. Gave us more passion and energy to realize our vision to spread the awareness and application of design thinking.

Paying-it-forward is wonderful but then you imagine doing that for a bunch of people you have no vested interest in, it is pure humility.

The magnanimity with which they approach knowledge sharing is humbling. There is recognition of the notion that there are millions out there waiting to interact and hear their encouraging and inspirational stories. We asked a few design do-gooders we have had the honour of working with about why they work pro-bono. Here is what they had to say… we are indeed grateful to all the pay-it-forward individuals, makes us want to do more!

“One of the most wonderful experiences in life is to see an idea evolve into a feature or a product and then into business. There are a great many ideas out there that are ready to take this journey. Helping others navigate and experience this journey is what addressing larger audiences is all about” Tridib Roy Chowdhury, GM | Sr Director Products, Adobe

“I do it to pay it forward to peers, practitioners, designers & society at large for better ways to solve problems by design thinking. It is great to be part of something, where it is not driven by the idea of an individual but as a collaborative effort for change.I also get to be part of a platform where I can exchange idea/thoughts/ methodologies and more importantly learn, since there is no single right/wrong way to do design thinking” Harshit Desai, Design Thinker | Digital Transformation Lead | User Experience Strategist, KPMG India

“I see two extremes in the practice of Design Thinking. One pretty serious and offering the best for innovating for better lives. The other is lighter and sometimes belittling the practice. I am a pure play Design thinking practitioner and like to spread the message that for some DT is life changing and for some it betters lives. I have been part of such experiences. It is inspirational! Whether it is pro-bono or not I have been doing this for some years and will continue to do so, to reduce the negativity about design thinking to my best possible ability” Lakshman P Seshadri | Strategy | Innovation & Design, SAP

“Success for individuals or organizations is about what we can do for others as well. I consider it valuable to make the time to share knowledge. Empowering outfits and individuals is just as important. Pensaar’s mission to evangelise and spread design thinking at a nascent stage ties into my belief of sharing is learning” Venkat Kotamaraju | Growth & Strategy Leader, Pensaar

The joy in knowing that that they are changing lives is what makes evangelizing the methodology so important. Also, it triggers a beautiful snowball effect of only inspiring others to do the same.

Guest Post by Deepa Bachu, Pensaar 

Posted on

BHIM (Android/*99#) & AadhaarPay

bhim-aadhaarpay

This afternoon the Prime Minister unveiled BHIM – an Android app from NPCI with an equivalent USSD-based *99# service.

Additionally, recently one of the banks launched AadhaarPay – a capability that allows merchants to collect payments from consumers with their Aadhaar# and fingerprint.

There has been a bit of confusion about the role of Aadhaar in BHIM – so this blog clarifies.

BHIM/SmartPhone – the Android and soon iOS app – is a UPI app – no different from PhonePe or any other bank applications. It has been developed by NPCI and is a common application across all banks. As with ALL UPI apps, BHIM has NO connection to Aadhaar – the customer is authenticated by his issuing bank using his Mobile# and MPIN and nothing else. Of course this app conforms to all the security-standards of any UPI application and has gone through the rigorous certification process.

*99# is merely a USSD front-end to the same capabilities. It does exactly what BHIM does but can be accessed on all phones – SmartPhones and Feature-Phones.

Aadhaar itself has NO direct role to play in BHIM – whether on Android or USSD/*99#.

So what is AadhaarPay?

AadhaarPay – leverages the Aadhaar-linked bank accounts to allow payments to a retailer. The payer need not provide anything more than an Aadhaar number and their biometric to the payee. The retailer receiving a payment needs to have a SmartPhone with an Aadhaar-approved secure Biometric Sensor and a certified AadhaarPay application. In this case the security-standards for customer data and biometric must comply both with UPI’s transaction level security and Aadhaar’s biometric security. In the case of AadhaarPay – ONLY Authentication is performed by Aadhaar/UIDAI – the transaction details are never sent to Aadhaar. Think of it as Authentication is done by Aadhaar and Authorization by NPCI/Banks.

One instance of AadhaarPay was released last week by IDFCBank and over time one may see a common AadhaarPay app that at the front-end uses Aadhaar for authentication and the BHIM/UPI back-end for authorization for users who don’t have a mobile phone.

National Pride Moment

The UPI platform, BHIM, *99# and AadhaarPay are great state-of-the-art platforms and applications that are a boon to all Indians. 2016 has been a great year in Payments progress worldwide – and India is leading the way!

With BHIM, *99# and AadhaarPay, the entire 1Billion plus population is now covered with a state-of-the-art real-time payments system. Those who have Smartphones will get the rich-app experience, those who have feature phones will use the USSD interface and the rest will merely need Aadhaar# and their fingerprint/IRIS biometric for to make payments.

3-Cheers to NPCI and the government for blazing such a fabulous trail! The new Twitter handle @NPCI_BHIM is a great way to stay informed about future developments regarding BHIM!

Guest Post by Sanjay Swamy, Entrepreneur & Early-Stage VC! IndiaStack Evangelist

I wish all readers a happy end of 2016 and an awesome year in 2017 – Payments geeks will indeed have a lot of fun working on UPI and the new world of interoperable, secure and universal payments!

 

Posted on

InnoFest 2016 – Innovation celebrated in Bangalore, and how…

Robots, Drones, Electric Bikes, 3D printers, Modular Homes – It’s all Happening in India – #IndiaInnovates

if-1

 

The Indian Software Product Industry Roundtable (iSPIRT), a think tank dedicated to the cause of the Indian Product Industry, held its flagship event InnoFest 2016 in Bengaluru. This unique event was inaugurated by Mr. Mohandas Pai, Chairman of the Board, Manipal Global Education. The one day long festival focused on hardware innovation encompassed inspirational talks by industry leaders, sessions by key innovators, a panel discussion, a product showcase, workshops, a DIY pavilion and makerspaces. Mr. Mohandas Pai and Vijay Shekhar Sharma, Co Founder Paytm, delivered the  opening address.

if2

 

if5

 

InnoFest 2016 had over 1200 registered participants and showcased 150 products and innovations. The event featured 10 Workshops, 12 DIY Pavilion participants and 2 Community projects, wherein the audience could actively participate. Over 35 Speakers addressed the huge gathering of budding innovators, manufacturers, techies, entrepreneurs, students, professors, researchers and representatives from the financial sector. A significant number of participants were women entrepreneurs and innovators.

In his keynote and inaugural address Mr. Mohandas Pai, said, “More often than you think, innovations are stemmed from an idea that provides a solution to recurring and nagging problems that you may face personally. To translate that idea into a product and a business, requires an eco-system to support it and reach-out to the markets. InnoFest provides that platform and unlocks a plethora of opportunities. It is imperative that successful innovators need to foster other innovators and harvest benefits collectively. I’m elated to say that InnoFest is turning out to be a hub for innovation led entrepreneurs.”

InnoFest 2016 showcased exciting innovations such as a Sumo wrestling Robot, electric bikes, modular portable micro housing units, a 3D selfie maker, digital microscopy, 3D printers, pop up makerspace, farming tools, healthcare devices, education products, green energy equipment, environment related products were just the tip of the iceberg.

if4

InnoFest also had a host of mentors who were available throughout the day to have a one-on-one discussion with participants. A workshop focused on providing a clear understanding of Entrepreneurship for early entrepreneurs and novice entrepreneurs was a runaway hit.

A key element that innovators grapple with is Funding, InnoFest featured a session on funding resources for early stage Hardware Entrepreneurs, Crowd Funding, Challenges in obtaining Grants and Equity Funding.

With the Make in India movement gaining momentum a session on Building Hardware Businesses in India/from India, enlighten the participants.

Mr. Sharad Sharma, Co-Founder of iSPIRT and Convenor of InnoFest, said, “India is on the cusp of a business revolution. We are going to see a spurt in the manufacturing sector addressing basic human needs air, water and food. Today’s innovators are going to be the leaders tomorrow. Events such as InnoFest will be pivotal in providing a jump-start to budding entrepreneurs.”

The Patrons of this event were Mr. Amitabh Kant CEO, NITI Aayog; Mr. Jayant Sinha, Minister of State for Civil Aviation, Government of India; Mr. Nandan Nilekani, Former Chairman of Infosys and Former Chairman of UIDAI; Mrs. Kiran Mazumdar Shaw, Chairman and Managing Director of Biocon and Mr. Mohandas Pai, Chairman of the Board, Manipal Global Education.

InnoFest was concieved as a day-long festival of ideas and inspiration that will exponentially multiply innovation across the country and make India into a Product Nation. Our research shows that there is a need for a strong support ecosystem for hardware innovators similar to that available to software innovators. InnoFest seeks to bring together the multitude of partners needed to build such platform that encourages and supports grassroots innovators from ideation to realization to growth. iSPIRT strongly believes that a robust product ecosystem is the key to rapid growth across the country.

 

#IndiaInnovates

Posted on

Industry 4.0: The New Normal

In case you are a manufacturing company beginning to explore how investment into Artificial Intelligence and Internet of Things could help your top and bottom lines, you may already have fallen behind. The fourth industrial revolution or the ‘Industry 4.0’ is already upon us and the opportunities to completely transform the way we carry out production are limitless. Industry 4.0 may be broadly defined as a collective term for a number of contemporary automation, data exchange and manufacturing technologies. It is characterised by a diminishing boundary between the cyber and physical systems to enhance productivity and reduce costs. ‘Smart’ and ‘Connected’ are two of the most important keywords in the new industry universe. Smart takes us into the domain of Artificial Intelligence (AI) while ‘Connected’ is more a purview of ‘Internet of Things’ (IoT).

screen-shot-2016-12-08-at-4-26-39-pm

‘Smart’ – A detour into Artificial Intelligence

AI finds its roots way back in 1956 when the name ‘Artificial Intelligence’ was adopted or even further back with Alan Turing in 1950 or in 1943 when McCulloch & Pitts introduced the Boolean circuit model of brain. It’s still however, a little difficult to settle on one universal definition of AI. For our purpose we may define AI as the development of computer systems able to perform tasks normally requiring human intelligence. These may include (but are not limited to) visual perception, speech recognition, decision-making, and translation between languages. More passionate people define AI as the ability to ‘solve new problems’.

The lack of one single definition has not detracted investors from recognizing the potential of AI and they have been pouring in money like never before. As per Zinnov Consulting, in the last 5 years alone, investments in AI have grown ten-fold from USD 94 million in 2011 to USD 1billion in 2016. As per CB Insights, the equity investments in AI were North of USD 2 billion in both 2014 and 2015. We may attribute different ways of defining AI to different investment figures, however we can agree that investments have sky rocketed. While, Venture capital firms have obviously been at the forefront in backing early stage companies, the high corporate interest in acquiring AI start-ups has also led to a buzz in the M&A markets. Some of the biggest acquirers in AI include Google, Apple, Salesforce, Amazon, Microsoft, Intel and IBM.

India is holding its own in terms of AI related action. As per Zinnov, India has emerged as the 3rd largest AI ecosystem in the world with 170 start-ups. Niki.ai, SnapShopr, YANA, HealthNextGen, Aindra Systems, Hire Alchemy are some of the notable firms trying to disrupt the value chain across sectors. Global technology companies have acquired more than half-a-dozen India based AI start-ups in the last 18 months. It’s not all one way traffic. Indian IT services firms like Infosys (UNSILO, Cloudyn, TidalScale) and Wipro (Vicarious, Vectra Ventures) have been looking for targets abroad to augment their AI capabilities.

Table 1: AI use cases across sectors

screen-shot-2016-12-08-at-4-26-58-pm


‘Connected’ – the Industrial IoT

The Industrial Internet of Things refers to the network of equipment which includes a very large volume of sensors, devices and “things” that produce information and add value to the manufacturing processes. This information or data acts a feed to the AI systems. As per Cisco, 50 billion devices will be connected by 2020 and 500 billion by 2030. McKinsey projects that IoT will generate 11% of global GDP by 2025. This is driven by optimising industry performance and cost efficiencies.

 

IIoT on the Factory Floor

The global IIoT spending is estimated at USD 250 billion and is expected to reach USD 575 billion by 2020. The key components of the IIoT ecosystem include sensors/modules, connectivity, customisation, and platform/IoT cloud/applications.

As per NASSCOM, The Indian IoT market is expected to reach USD 15 billion with 2.7 billion units by 2020 from the current USD 5.6 billion and 200 million connected units. This is expected to be largely driven by applications in manufacturing, automotive and transportation and logistics.

In India, the IIoT segment has caught the attention of the largest manufacturers. In November 2016, Reliance and GE announced a partnership to work together to build applications for GE’s Predix platform. The partnership will provide industrial IoT solutions to customers in industries such as oil and gas, fertilizers, power, healthcare and telecom. Mahindra & Mahindra’s uses bots to build car body frames at its Nashik plant. Plants operated by Godrej and Welspun use the Intelligent Plant Framework provided by Covacis Technologies to run their factory floors.

Industry 4.0 is an exciting phase and the possibilities seem limitless. The Indian government is trying to play its part through the Digital India mission. It is positively driving various government projects such as smart cities, smart transportation, smart grids, etc. which are also expected to further propel the use of IoT technology. It is imperative for the promoters and companies in the manufacturing segment to find their place in the new digital world order through organic or inorganic investment.

arvind-yadav

 

 

 

This is a guest post by Arvind Yadav,

Principal at Aurum Equity Partners LLP.

 

Posted on

FirstHive @PNGrowth2016

‘Omwana ni wa bhone’ – a famous African proverb meaning: “ Regardless of a child’s biological parents, its upbringing belongs to the community”

A cold November morning, we drove down to Devanhalli on the outskirts of Bangalore, having blocked three days to be a part of PNGrowth2016. Reading about the previous version of PNGrowth & the regular updates  coming in from Avinash, we could not wait to be there. We were hungry to learn from the journeys of Indian products that traversed the same path successfully.

We reached the venue around 9 am and it could not have been a better start – a cup of hot tea, networking with the other founders from across the sub continent and some french cricket to break the ice (more so when we won our match! :)). The formal sessions kicked off with Shankar / Aneesh / Pallav / Shekhar / Girish setting up the context and inspiring to see the passion from Sharad for achieving iSpirit’s vision. It was already clear what mammoth effort must have gone into bringing together such stellar leaders from the the Indian Product startup space in a single room. I realised that while our asses might get kicked in these three days by this group, we were definitely going back with actionable learnings to help us grow 10X!

FirstHive was part of the Global SMB cohort with 12 other founders. With Girish (FreshDesk) and Suresh (KissFlow) as our coaches, we could not have asked for anyone better! Shankar and Aneesh took us through this session by filling in the framework for their business with generous inputs from Girish. “Bullshit!” – this word resonated many a times in the conference room that first session in various cohorts but it was accompanied by sharp inputs & perspective by the respective cohort mentors! I loved this concept so much, we are using it @FirstHive in our meetings 🙂  (hopefully we will slowly not have to use it that often!).  The frameworks given to succinctly define our value prop stumped many of us, led to much introspection among most founders.

As we got past the critical “Who Am I?” question, Girish and Aneesh took to the stage and walked us through what does 10X scale look like. They challenged us to imagine and define this for our respective products. Metrics and mistakes shared with respect to their growth stories made this session very relatable and actionable. The insights on the Top of the Funnel drops (TOFU), Middle of Funnel leakages (MOFU), and closure challenges, including delving into sales challenges, team structures, compensation best practices were invaluable. For us at FirstHive, this session could not have come at a better time as our internal goal was to scale 3X in 2017!
_mg_7876-1
Manav and Shekhar sessions following this on sizing your market was interesting, because it gave us two different ways to look at the market, product expansion, TAM and how success can be achieved. The impact of market size on the size of your business was a recurring lesson and the important of defensibility forced us to evaluate the ‘hard to replicate’ levers for our business. There was also the quintessential point on timing that Shekhar went into and how different companies dealt with this. The learnings from Aneesh on how he created his sales plan and achieved success in new markets with Capillary, Girish speaking of the challenges faced in scaling Freshdesk, and Suresh sharing the sales process that worked for him at KissFlow, Shekhar walking us through how a VC potentially looks at businesses or sectors, Pallav walking us through everything including factors that aid the result oriented culture at FusionCharts were invaluable.

Nags (24/7) and Raghu (Taxi4Sure) walked us through their respective successes and a good glimpse into what rapid scaling could mean. Phani (RedBus) spoke to culture, defensibility of a low margin business, speaking of how and his team travelled in buses (to ensure they eat their own dog food at RedBus) and Sanjay Anandram’s story of passion to coming back to India to ignite the nascent startup industry and Sanjay Deshpande’s journey in deep tech were inspirational. Mohit’s story of how Carwale happened and culture was absolutely amazing and how important culture was to building an organisation from an idea. Pallav helped our cohort with his examples of product / market choices and culture and we found comfort in his point that sometimes good choices are retrospectively self-evident. But most founders were probably in a similar state as us – optimistic, a little confused but above all, very hungry to succeed that led to innovation & jugaad.

The whole event was wrapped up with each of the founders presenting a curated pitch to their respective cohorts which was followed by a peer review. Some of us including FirstHive were given the opportunity to  present in front of all the cohorts which helped us get some more feedback. But my note will be incomplete without a mention of the fantastic after event party where everyone hung out, loads of informal interaction & some collaboration opportunities were identified. It also would not have been easy for everyone to take three days off from their businesses & families to  spend time grooming potential future success stories like FirstHive and for this we shall remain indebted to them.

Growth Hacking after PNgrowth

We left the venue very very tired (less than 8 hours of sleep in 3 days) but our hearts were pounding & our minds were brimming with ideas – thanks to a wealth of new information, learnings that we had to internalise and apply to our business. We had to put together a 45 day GrowthHack plan for FirstHive incorporating as many ideas as we could from PNGrowth! So we set out three days of sessions with our leadership – our VP Engineering, VP Products and our VP Sales. We did similar exercises, used the frameworks, shouted out BullShit many times and eventually got to a plan for FirstHive! We are now pursuing a master list of 8 initiatives across the company: Our singular goal – get ready for 3X growth in 2017!

iSPIRT’s  mission is to transform India into a nation where the best of breed global products will germinate from and with PNGrowth they have truly provided us at FirstHive and all the others who were there, with the tools to go ahead & take “ pandas  in the global marketplace. We  hope to say our thanks by making FirstHive a leader in the B2C Cross Channel Marketing space. If there is one thing that was exceptional about PNGrowth, to me it was True learning – No halos, no facades, no bullshit! Honest dialogues with real examples from folks who traversed the same path which were are on today. The willingness of these founders to openly share their internal growth numbers and metrics that can help us benchmark our business, sharing with us mistakes made to ensure that we do not repeat those – this was truly ‘Omwana ni wa bhone’ in practice.
Posted on

How UPI is more convenient & secure than what most people think

A phenomenon that has been pretty popular recently in the news goes by the name of UPI (Unified Payments Interface). However, most people have not been able to experience the revolution and the magic moment that comes along when paying via it. Part of that stems from the myths that keep floating around, regarding how it might not be that secure and worthwhile. Well, allow me to put all of these doubts at ease through this post.

Let us take all the salient features of UPI one by one – 

Bye-bye long account numbers and IFSC codes

Convenience factor

Now, there is no need to ask anyone for their account numbers or IFSC codes when sending or receiving money. Apart from the fact that remembering long account numbers and IFSC codes is cumbersome, entering those on a small screen / app is painful (especially considering that the user experience of banking websites and apps is mostly terrible). 

Of course, the question is now what replaces these 2 if they are not in the picture any more. Say hello to virtual address (which looks like sunnyrohit@ybl where the first part is a unique ID set by you and the second part is determined by the bank/app which processes your payments). This virtual address is automatically mapped to your bank account by NPCI when you register for the first time.

Security factor

The first thing to observe is that since you no longer need to share your account details (Number and IFSC code) with anyone, hence they are completely hidden from everyone else.

Secondly, what this process does is that it takes your user level identification to a more abstract level where the virtual address (or in our case – mobile number) becomes the key information to know or share with anyone. And sharing it is completely harmless as a common person cannot extract any info from that.

Send and receive money instantly, 24*7 and even on a holiday

Convenience factor

Needless to say that this is a game changer, especially in this new economy where demonetization has brought cash to a near standstill and banks/ATMs are clogged up. Not to mention that when sending / receiving money, we don’t even need to think what day and time it may be.

Security factor

Actually, UPI is built on the existing layer of IMPS (Immediate payment service) which has been running smoothly since 2010. Hence, the key thing to note here is that the basic security concepts have stood the test of time for 6 years now. Not to mention that they have improved along the way and many more locks as well as checks have been added on top.

Linked exclusively to your mobile device

Convenience factor

This is a no brainer as everybody has their personal mobile with them 24×7. And it is also the first device that we think of nowadays when receiving / sharing anything on a speedy basis.

Also not to worry, you can link multiple bank accounts as well with the same virtual address. As well as un-link / delete account at any point of time.

Security factor

Firstly, it is important to remember that your virtual address gets mapped to your device exclusively. Now couple this with the fact that for making any payment (peer to peer and peer to merchant), you need to enter your M-pin (a secure 6 digit pin set by you for the first time), and then you can see how it is a perfect closed loop.

Even if anybody gets hold of your device, they cannot do anything until or unless they have your M-pin. Similarly, for resetting your M-pin, you would need your debit card details (completely separate from your device information for security reasons)

No minimum amount. A single user can do 5 transactions totalling up to Rs. 1 Lac daily

Convenience factor

Taking all common scenarios, a total amount of Rs. 1 lac is good enough to cover all your daily needs be it online / offline. And again the number of transactions can easily be covered within the limit of 5 per person. Hence, yay to good lifestyle needs!

Security factor

These velocity checks also ensure that nobody can wipe out or cause any major havoc in anyone’s bank account (although as we discussed, the chances of any data compromise are next to nothing).

Also, remember that all these aspects and features are valid for non-banking UPI apps (like ours) that have partnered with a bank or individual bank’s UPI apps as well

In today’s age of lightning speed information and open access, keep no room for confusions or myths in your life. It is time to embrace the change and be a part of a much more awesome and well-built economic infrastructure via UPI.

Guest Post by Rohit Taneja, Mypoolin, @sunnyboyrohit

Posted on

India Inc Version 2: Disruptive, Agile, Confident and… ready to Go Global

The growing internet penetration has fuelled India’s start-up ecosystem, which is now the third biggest in the world. US-based Compass (Startup Genome), in its 2015 report, puts Bangalore as the world’s second fastest growing start-up ecosystem. There is a massive opportunity within the $2 trillion Indian economy owing to the consumption fuelled by 1.3 billion Indians and a good number of Indian start-ups are focusing on that. In fact, 7 of the 9 Indian unicorns are focusing on the domestic consumption story.

However the $150bn Indian IT services industry tells us that it is very important to look outside of your home market to create a world leading organization. Most large Indian IT companies derive 75% of their revenue from the US and Europe; and that allows them to create industry leading best practices besides scale, maturity and an innovative edge to enter the top global league. The new generation Indian tech product companies need to take a leaf out of these successful Indian enterprises.

Here are some of examples of how Indian product technology companies are challenging their global peers –

“Made in India, Made for the World” Zoho has over 20 million users across the globe, and is gunning to reach the 100 million users mark currently..

RateGain works with 12,000 hotels worldwide to help them enhance their revenue and optimize their inventory.

Chennai-based Indix has the world’s largest product database now – 50,000 brands and over 700 million products.

Mumbai-based fintech and cybersecurity company, Seclore, has created one of the most secure enterprise rights management systems in the world.

300x250-mpuIndia Emerging Twenty (IE20) aims to discover the next 20 most promising Indian companies to go global and provide them the visibility and platform to help them make a mark in the global arena. This unique programme is led by London & Partners, the Mayor of London’s inward investment company which has a proven track record working with over 2000 international businesses.

IE20 – Catapulting businesses to the global stage

Last year, 222 Indian companies nominated themselves for the inaugural edition of the IE20. Winners included companies of all shapes and sizes – from organisations turning over a few hundred thousand in top-line ($$ of course), to others touching $100 million. From IT services companies employing thousands of staff, to lean and mean start-ups growing  into adouble digit head count. Many of the winners (including Seclore, RateGain and Indix) are already pioneers in their space; while others are positioning themselves to challenge their global peers. From “Battle-tested Cybersecurity solutions” to companies collaborating with global universities to discover the next big thing in genomics, these companies reflect the new wave of a global technology ecosystem – disruptive technologies that will transform our lives and the way we do our business.

The programme is supported by BDO, Newland Chase, Santander UK plc, Lalit Hotels and the UK’s Department for International Trade.

Program qualifiers

Companies registered in India OR those registered outside of India having a majority Indian management.

Companies should have worked with global clients, and/ or have products suited for global markets. Having an international presence isn’t necessary.

Established after year 2000 and should have global ambitions.

Selection process and benefits

The selection process, spanning over a period of 20 weeks, will assess companies on the basis of three broad parameters – global scalability, innovation and differentiation and performance. Companies need to nominate themselves for the programme using the application form (link). ValueNotes, the knowledge partner, will use their 3-stage assessment framework and a robust rating model to ensure a high quality selection of the top 50 companies. These companies will be invited to make a brief presentation before a panel of business experts, who will then select the final top-20. . The panel round will be held in Mumbai, Bangalore and Delhi in late January/early February 2017..

The selected 20 companies will be felicitated and awarded, which will help them gain international recognition – critical to global expansion. The awards programme will also offer opportunities to network with investors, business heads, thought leaders and mentors of global repute. Courtesy of Air India, all 20 companies will be flown to London to participate in a high impact business programme during London Technology Week, in June 2017.

The nomination process has already begun and the last date to send in your nomination is 16th December 2016. For more details, visit www.indiaemerging20.com

Guest post by Gautam Sehgal, Chief Representative, India, London & Partners International

Posted on

Story of an iSPIRT Volunteer.

I am Taron Mohan, CEO of NextGen Tele and an iSPIRT Volunteer. I usually meet many CXOs of Banks for selling mobile-SIM-overlay based financial inclusion solutions. This one time I was on an email thread with the CEO of a big Public Sector Bank with other iSPIRTers. The discussion was about India-Stack. In my entrepreneurial zeal, I pitched my NextGen Tele SIM-based solution. I quickly realized that this was a mistake. I knew instinctively that I should not use an iSPIRT session to further my own private self-interests. iSPIRT’s credibility comes from Volunteers like me putting India first. While working for iSPIRT we set aside our personal gains for a larger cause of building a Product Nation.

I’m now an advocate for all of us Volunteers signing a Volunteer Code-of-Ethics that sets clear expectations from all of us. This would help us maintain the high standard that we all hold ourselves to. So, working with the iSPIRT Fellows Council we drafted the Volunteer Code-of-Ethics. I have signed it and will abide by it. I plan to even assert my iSPIRT Volunteer Code-of-Ethics in my email signature.

iSPIRT Volunteer Code-of-Ethics
As an iSPIRT Volunteer, I am committed to making India a Product Nation. At no point in time, I shall use my iSPIRT Volunteer status to further my private or business interests. I hope to set a high ethical standard and be an example to others.

On Behalf of the Fellows Council –
Manjunath Nanjaiah, Thiyagarajan(Rajan) & Sharad.