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Simplified Incorporation And Documentation Procedure

Simplified Incorporation And Documentation Procedure

Ministry of Corporate Affairs (MCA) has further simplified the ease of doing business in India by introducing SPICe forms to further digitize the company registration process. The form INC 29 was originally used to incorporate companies within a couple of days. Though this form simplified the process of incorporation, key stakeholders and professionals felt that this was a risky form because a rejection in a particular section or subsection would result in the entire form being rejected. It was because of this most promoters/founders (about 65%) used the INC 7 Form to file for incorporation. To fix this drawback, the MCA created Simplified Performa for Incorporating a Company Electronically or SPICe Form.

SPICe Forms

Simplified Performa for Incorporating a Company Electronically (SPICe) form is a single multi-purpose form that handles multiple applications such as reservation of the company name, allotment/application for Director Identification Number (DIN), incorporation of a company, etc. This was launched by the MCA to fast track the Incorporation process for companies in India.

The form INC 32 is similar to INC 29 because it helps fast track the incorporation of a company in India with the only exception, the former form has a provision for name approval, thereby assuring the name, while the latter has no such provision.

How to Incorporate a Company?

There are two ways to incorporate a company, namely:

  1. INC 7, DIR 12 and INC 22
  2. INC 32 or SPICe Form (replacing INC 29)

Types Of Companies That Can Apply Through SPICe

  1. Part 1 Company
  2. Producer Company
  3. Section 8 Company
  4. New Company – One Person Company (OPC), Private or Public Limited Company.

Step-By-Step Process

I. File INC Form 32

INC 32 is the eform used in electronic filing of the Memorandum of Association (MOA) and the Articles of Association (AOA). The Standard format to be followed is Form INC 33 (for MOA) and INC 34 (for AOA). Previously, a company applying for incorporation would use their own format and sent to the Registrar of Companies individually, but since the introduction of SPICe Form, one needs to apply for AOA and MOA with the standard format prescribed. This creates less confusion and a narrow scope for making errors.

Based on the type of company, the following standard templates are used:

Sr.No Type Of Company AOA MOA
1 Company Limited by Shares Table A Table F
2 Company Limited By Guarantee (not having share capital) Table B Table H
3 Company Limited By Guarantee (having share capital) Table C Table G
4 Unlimited Company (not having share capital) Table D Table J
5 Unlimited Company (having share capital) Table E Table I

II. INC 1 or Name Change
Only a single name for the company can be proposed in a form.

III. File DIN
DIN is automatically allocated to directors that do not have a DIN.

IV. Digital Signature Certificate (DSC) is an essential step in this process. Without a DSC, a company cannot file for incorporation through SPICe Form. The Directors, witness/es and a professional will be required to use their DSC on the SPICe Form. The limit is 7 subscribers and 1 witness per incorporation, though accommodation for certain cases that require more than 7 subscribers has been undertaken.

V. Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN) and Employee State Insurance Corporation (ESIC) registration can be done in a single step.

VI. Documents Required

  • Memorandum Of Association
  • Articles Of Association
  • A declaration and affidavit must be filed by the first subscriber/s and director/s.
  • Proof of Office Agreement – Rental Agreement, conveyance, lease deed and rent receipts.
  • A copy of Utility bills lesser than 2 months – phone bill, electricity bill, etc.
  • NOC from the sole proprietor, partners, other associates, etc.
  • Proof of identity and residential address of the subscribers and directors.

VII. Share Capital
The minimum share capital (authorized and subscribed) for a One Person company (OPC) is INR 1, for a Private company INR 2 and for a Public Limited Company is INR 7.

VIII. Declaration by a Professional
The DSC of a professional (Company Secretary, Chartered Accountant, advocate, Cost Accountant) along with the professional’s membership and certificate number is required to file SPICe Form (a declaration that all information provided is accurate and true).

IX. The Form is then processed at the Registrar’s office.

Conclusion

SPICe Form was introduced to replace eForm 29. While drafting the SPICe form, accommodation was made to changes that benefited the stakeholders by reducing timelines and multiplicity of several forms in the process of Incorporation. SPICe will become the standard form and format for all incorporation related purposes.

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How To File Patents In India?

A patent is a form of intellectual property defined as “a government authority or licence conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention.” The purpose of a patent is to protect the intellectual property created by an inventor for a period of time so that the inventor has first rights over how he wishes to use his patent. A patent can be sold, leased, be used in exchange for royalties, equity, etc. A patent holder however, does not become the holder of the invention unless he has invented it first.

The then British Government of India, during the year 1856, tried to encourage and propagate new inventions termed as ‘exclusive privileges’ in the manufacturing sector. The first invention to be granted Intellectual Property Protection in India was by the Government of India under the petition special privileges to George Alfred DePenning for inventing the ‘Efficient Punkah (fan) Pulling Machine.’

The Indian Patents Act, 1970

Patentable Inventions

The list of inventions patentable are:

  • Process, manner, or method of manufacture or Art
  • Machine, apparatus or other articles
  • Product patent for medicines, food, drugs and chemicals
  • A substance should be produced by manufacturing
  • Computer software  used with hardware or with technical application to industry

Inventions Not Patentable (Sec 3)

The following is a list of inventions that cannot be patented:

  • Any invention obviously contradictory to established laws or that is superficial.
  • Any invention that could be used to exploit the population, contrary to morality, public order, or causes prejudice to life or health (of animals, plants, natural resources, humans,etc).
  • The discovery of a scientific principle, any substance occurring naturally (living or nonliving) or any abstract theory.
  • If no new product is formed nor a new reactant is formed using machines or apparatus. The discovery of a new property or new form of a substance.
  • Mere mixture of chemicals.
  • The duplication, rearrangement or arrangement of known devices.
  • A method of horticulture or agriculture.
  • Any surgical, medical, diagnostic, therapeutic, etc. process for the treatment of humans or animals (to render them free from disease).
  • Animals and plants in part or whole (other than microorganisms).
  • Algorithms, computer programmes, business or mathematical methods.
  • Musical, literary, artistic, dramatic, cinematographic (aesthetic productions or works), or television productions.
  • The mental strategy in playing a game, a mental act, rule, method or scheme.
  • Topography of integrated circuits
  • An invention that is traditional knowledge or which is a duplication or aggregate of known components properties.
  • Inventions related to atomic energy cannot be patentable under Sec 20 (1) of the Atomic Energy Act, 1962.

Application For Patents

The person applying for a patent should apply jointly with another person or alone and can be:

  • The first and true inventor of an invention.
  • An assignee can make an application on behalf of the first and true inventor of the invention.
  • The legal representative of a deceased applicant provided that before death, the applicant was entitled to make such an application.

Form Of Application

  • Every application made shall be for one patent only at the patent office in the prescribed form.
  • An international applicant applying for a patent in India under the Patent Cooperation Treaty must file a corresponding application before the Controller in India. No patent is valid for the entire world because patent law is territorial in nature. Filing an application in India enables a person to file for application at convention member countries which makes the application process easier when applying to multiple countries.

Amendments To The Patents Act And Rules

The Indian Patent Act was amended in 1999, 2002 and 2005. The need for patenting marks of patent agent examination, and chemicals and drugs under Trade Related Intellectual Property Rights (TRIPS) brought about the need for an amendment to the Patent Act.

The Indian Patent Rules were amended in 2003, 2005, 2006, 2012, 2013, 2014 and 2016. The rules were amended to include a fixed fee structure, patent agent exam qualification, appointment of the patent office as searching and examining authority, third category for applicants that are small entities.

The Indian Patents Office

The Office of the Controller General of Patents, Design and Trademarks (CGPDTM) administers the Indian Patent Office, which is an Office of the Government of India that is entitled with administering the laws of patents, trademarks and designs. It is important to note the distinction between patents, designs and trademarks.

Patent Duration

The duration of any patent filed in India is valid for a period of 20 years (irrespective of filing with complete or provisional specification) from the date of filing the application. If an applicant wishes to file an application under PCT, then the term of 20 years begins from the date of international patent filing. If an applicant wishes to file a patent in another country, then he must file the patent with the Patent Office of that respective country (through the conventional filing of an application or through the PCT route) since patents granted in India are valid only throughout the territory of India.

How To Get A Patent?

Get an Idea for a Patent

First get an idea of what has to be patented, and the same has to be presented on paper with a description, drawings and sketches (if necessary) explaining the work of the invention.

Patentability Search

Next, an individual must check the list of patentable inventions. The Patent Act (as mentioned above) entails what constitutes a patentable invention and what doesn’t. Only if an idea is patentable can an individual move forward to the next step. It also enables an individual to search for existing patents in case the idea or patent already exists.

Patent Application

If a patent is at the early stages of its development, then an inventor can file a provisional patent. This enables an inventor to secure a filing date (12 months of time to file complete specification) and it is also lower in cost to file a provisional patent as compared to the cost of filing a complete patent. If an inventor has complete specifications about the invention, then the individual can file for complete specification.

Publication of the Application

After an inventor has filed for complete specification, the application is published 18 months post first filing. If an inventor feels that they cannot wait for the period of 18 months from the date of filing the application, then s(he) can file for an early publication request along with the prescribed fees and the patent would take about a month to be published under an early publication request.

Request for Examination

The controller, upon receiving an RFE request from the applicant, hands over the patent to the patent examiner for examining criteria such as novelty, enabling, inventive step, patentable subject-matter and industrial application. All steps covered till now (from patent application till grant) is termed as patent prosecution. The patent examiner then submits a first examination report to the controller and the applicant which consists of documents of the claimed invention.

Response and Clearing of Objections

Based on the examination report, most patent applicants would receive objections. A patent agent can help create a response to the objections raised in the application. An inventor can communicate to the controller as to why his invention is patentable.

Grant of Patent

After all objects raised in the report are resolved and the patent is deemed to be in order of grant after meeting all criteria requirements, the patent is granted to the applicant as early as possible. The grant of a patent is published in the patent journal.

As we move towards becoming a Product Nation, it is important that companies and individuals own their IP. A Patent can become a competitive advantage in itself and is to be ignored at your own peril!

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3 Key Factors to Increase Revenue for Your SaaS Product

3-key-factors-to-increase-revenue-for-your-saas-product

There are two types of SaaS products.

  1. New innovative product
  2. The commodity products (which is a copy of an innovative product)

The innovative products get sign ups and are able to scale because they have built a very useful and handy USP. They get word of mouth from early users which are enough for them to grow to a considerable size.

However, most SaaS products today fall into the commodity category with no innovative features. For such products, three factors are really important to grow.

saas-product

Pricing

One you have marketed your product well, and have people landing on your website, the first important thing is to get them to Sign up. Here the most important criteria is Pricing. As you are a commodity product, the price point, lower than the market leader will help in getting paying customers. Such a pricing strategy helps you get the price conscious customers to sign up. Remember, pricing is a factor of features. Pricing would be irrelevant without features, and your software needs to provide the features that your competitor is giving at a lower price.

Let’s take the example of Freshdesk. When Freshdesk launched, pricing was their major differentiator from their competitor Zendesk.

Usability, UI, UX

Pricing can get you signups. However, your users need to start using your software to give you their credit card ultimately. If you are not a market leader and want even to become the second best, you will have to focus on the design and usability of the product.

Often the first mover tends to avoid design, as they are competing on their innovative feature and design is where the late movers can compete on. Easy to use design coupled with self-onboarding features will help in getting the customer engaged.

The trials most SaaS products have is for 15/30 days. It is practically impossible to implement the product in the complete organisation in 15 days’ time and try all features of the product. Hence, the usability & design of the product is the most important deciding factor.

As you already have ensured a convincing pricing, there is a very high probability that the user will convert to a paying customer.

Pipedrive is one company which entered the CRM space rather late and still could make it big. This is because Pipedrive focused on the usability of the product. They have taken care of very small things — every time my team cancels a meeting or an appointment, Pipedrive gives an automated pop up which will ask for the next appointment. It reduces the chances of losing a lead in the pile because of not setting up the next activity. I run SoftwareSuggest, and have many friends who run CRM software companies. All of these CRMs are free for us to use, but we still prefer to pay Pipedrive because of its usability.

Customer Service

Converting a user to paid customer is not enough in SaaS. You will need to maximize the lifetime value (LTV) of the customer so that you start making profits. Once the user has converted to a customer, you need to start focusing on ensuring impeccable service quality. Organisations generally don’t prefer to move from one SaaS product to another. It’s a pain. Once they have signed up for a product, they like to stick with it. However, not focusing on customer experience once they have made the first payment will lead to churn. They might even leave before you have recovered your cost of customer acquisition. Hence, you will need to constantly monitor their usage of the product and ensure that the time on the app is increasing. Setting up a customer success team can be a good method. Good service will help in increasing the lifetime value of the customer.

Originally published on LateralPost

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Takeaways from the Second ProductNation Boot Camp #PNCamp #Pune

iSPIRT put together its second Product Nation boot camp for product people, by product people on 8th October 2016 at Persistent Systems’ Office in Pune. It was a day-long coming together of doers: ones who have been there, done that; and ones in the journey of getting there. The format was simple:

takeaways-from-the-second-productnation-boot-camp-pncamp-pune

Successful product entrepreneurs shared details of their journey, interesting hacks and their learning

Teardown session of early stage product startups, who are still looking for product-market fit.

Orchestrated by hand-picked facilitators, there were focused, interactive, deep conversations within small, curated groups. 

I have summarized key learning from the bootcamp below:

ankit-at-adpushupConfirmation Bias

One of the things that stood in the teardown sessions is that more often than not, founders tend to be bogged down with confirmation bias. Despite best intentions, many entrepreneurs look to confirm hypotheses, rather than test them. This is called confirmation bias and may lead to false positives.

Confirmation bias is defined as the tendency to search for and interpret information in a way that confirms one’s own existing preconceptions, beliefs and opinions. Entrepreneurs, generally known to be highly driven people, are intensely focused on their goal and therefore may be extra vulnerable to the destructive effect of confirmation bias

For an entrepreneur, the danger here is obvious: without a clear understanding of the things that might cause your business to fail, it’s impossible to overcome them.

Focus on specifics and go into depth

Another aspect evident from the discussion was that we are often trying to do too many things, and this could be with respect to also adding too many features.

Instead, you want to be the best at one thing your customers want or need. Focus on how that one thing you do best can deliver value to your customers. Become irreplaceable to your customers

To implement even one good idea takes a mountain of work–strategic planning, product development, marketing pushes, financing, administration, human resources, and so much more. Taking one idea to profits is hard. To be successful as an entrepreneur, you have to realize the devil is in the details. Don’t fall into the trap of trying–like so many entrepreneurs–to do too much.

Another benefit of focus for startups is that it enables better marketing. The only way to get mindshare is to have a simple story. It’s hard to be succinct in describing several products. By having a clear and singular focus you can more easily craft a simple story that resonates with customers. This in turn makes it easier to generate PR. And most importantly of all, an easy to describe product and differentiation allows consumers to more easily tell your story and help you create viral growth.

Identify Customer Persona

User Personas are fictional descriptions of a few different profiles of your typical users, based on research and conversations with prospective buyers. They help you understand your users better and are important tools when tailoring the message of your brand. Identifying customer persona helps early can help you in several ways:

Identify your target market – Building a User Persona helps a startup clearly identify and understand its target market

Shape your product or service offering – With this goldmine of information, a startup is uniquely positioned to shape its product or service offering to better cater to the needs of its target buyers. This can, for example, also help you decide the theme for your product landing page, color combination, UX intricacies etc. 

Lead generation – A marketing strategy that is based on well researched user personas, and defined customer decision journeys will result in higher lead generation

Content creation –Once you’ve understood the motivations, goals, challenges and habits of your users and prospective users, you can build content that is designed to address these goals. Your content will now be much more effective and will convert at a higher rate.

How are you divergent?

Suresh from Kissflow showed an interesting slide on how KissFlow was divergent against its contemporaries. Founders need to have clarity on the key criteria their target persona will evaluate before choosing their product. It could be features, price, ease of use etc, and compare it with other players in the market.

Think about this: Why do customers pay for your product or service? What makes it unique and better than that of your competitors?

Your differentiation will stem from the insights you gathered about the problem or the customer which you uniquely believe no one else has.

Rinse and repeat

As an entrepreneur, you need to clearly differentiate between fact and hypothesis. You will make several hypothesis, but you need to test them before making accepting them as a fact. 

The most important element of creating a hypothesis is that it must be “falsifiable.” That means your hypothesis can be rejected after an initial experiment of the hypothesis. 

Second, all hypotheses should be quantifiable. In other words, you must be able to predict, account, and analyze your results. A good hypothesis includes both a question and good methodology to uncover the results. After determining the question and developing your methodology, you should then run a test to analyze the information obtained.

You will be creating hypothesis related to several aspects in your startup journey, viz. product features, customer needs, website, pricing etc. 

Three important rules to keep in mind:

Do not be afraid to test your hypothesis

Be honest with yourself 

Learn from your mistakes.

In the words of Matt Damon in The Martian, “At some point, everything’s gonna go south on you and you’re going to say, this is it. This is how I end. Now you can either accept that, or you can get to work. That’s all it is. You just begin. You do the math. You solve one problem and you solve the next one, and then the next. And If you solve enough problems, you get to come home.”

Keep It Simple

And finally an important rule that founders need to imbibe by – Keep It Simple. This applies to your product, it applies to your website, it applies to user onboarding and perhaps almost everything.  The single biggest thing that will attract customers to try you, atleast initially is trust. Trust that you can deliver and trust that what you say is true. Simplicity helps you build this trust. Shy away from unnecessary hype or claims on your website and don’t make it until you make it.

facilitators-at-pncampAll in all, PNcamp is a MUST attend camp for any early stage product startup. It is a unique opportunity to catch the brains of experts and fellow participants through product feedbacks and interactions. What particularly stands out within the iSpirt community and in this even is the candidness of founders and their willingness to share details about their journey.

Guest Post by Rajat Harlalka, Bellurbis Technologies

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The payment gateway friction in cross-border trade of Software products

The payment gateway problem in exporting online from India

It is not easy for Indian Software product companies to export products online and receive payments in India.  This is true for both the downloadable Software product or Software as a Service (SaaS).

Experts say there is no legal or policy hurdle from RBI. Yet, there is friction. An Indian payment gateway service provider denies foreign currency cross-border transactions from India to a startups or small company.  Only exceptions could be some large companies.

the-payment-gateway-friction-in-cross-border-trade-of-software-products

As part of ‘PolicyHacks’ at iSPIRT, we attempted to attend to the issue of recurring billing in a previous blog here. This blog is another continued effort in this direction. It is based on a discussion with experts from payment solution companies. Embedded below is a video discussion with Krish Subramanian, Cofounder of Chargebee and Kiran Jain of Razorpay.

The options available and adopted by most small Software product companies’ today are:

  1. Use a foreign payment gateway like PayPal, 2 Checkout, Skrill etc. Or
  2. Setup a branch office or a subsidiary in a foreign country
  3. Incorporate in a foreign country and sell globally from there including India

The option #1 above of using international payment providers comes with a heavy transaction cost. The services are not of same order as one can avail being in US or Europe.

So, option #2 and #3 becomes much attractive. This leads to exodus of Indian Software product company’s to USA, Singapore or Europe etc. India stands to lose in the game.

Krish mentions that, “the Indian companies are forced to move abroad to seek the frictionless experience in the payment part, where they allow month on month and do seamless upgrades and downgrades”. He further adds up, “Indian companies being in India do not get the level playing field, even when the strengths of product are very similar to a foreign product. Even using a solution like 2Checkout being in India does not provide seamless upgrade and downgrade. Hence, many companies go and incorporate outside”.

This problem, therefore, is one of the ‘biggest hurdle’ to the ‘stay-in-India’ concept for startups. It is vital that policy makers pay attention and remove friction to this problem for startups to believe in ‘India Story’.

Kiran Jain of Razorpay mentioned that the added attraction for Indian Software product company to move abroad is that, “an Indian company selling on international payment gateway from outside India does not have to comply with service tax”.

This is another level playing field problem. Being in India the Software product sales online is subject to service tax. On other hand being a foreign incorporated company and selling a B2C product the service tax is totally exempted. This is so in current policy framework and is going to stay same in the proposed GST framework.

Although, this is not directly related to the payment gateway problem, it does add-up to the exodus of Startups problem. This issue has been covered in an earlier blog here. It is a policy agenda item on list of taxation issues (of iSPIRT) to be addressed by Government of India and also an item on Stay-in-India checklist.

The cross-border online trade of Software product is directly a Payment Gateway issue. Let us further understand what are the underlying causes, policy issues, possible resolutions and suggestions.

Is there a regulatory hurdle? If not, then what is the cause of problem?

Kiran says, “RBI came up with OPGSP guidelines in 2014”. And, “this policy allows the operation of International payment gateways”, that can facilitate both the foreign currency cross-border transactions and recurring billing. According to Kiran, many Indian banks have capability to provide platform which can accept international cards and multi-currency systems. Few banks support up to 17 different foreign currencies, though the settlement is all done in US dollars.

Why are banks not giving it? Kiran said that in last one year in USA, out of $28.33 trillion online transactions, $16.33 billion were classified as frauds. Indian banking system does not have a capability to incur such losses, “that is the threat to Indian banks”. This threat is the result of ‘returns’ or ‘charge-back’.

In case of delivery of downloadable Software product, at least there is a trail of transaction that can establish that the Software was really downloaded and if unsuccessful the Software can be delivered again. However, in case of services it may be difficult to handle the consumption trail at least in B2C transactions. In B2B transactions, such problems normally do not arise.

Hence, handling the risk of returns and charge-backs is the problem to solved. Solving this will encourage India banking systems to offer free and fair cross-border international payment gateway services.

What is the solution to problem?

Large players by virtue of volume or by offering a risk covering instruments can easily avail the service from banks themselves.

Small and Medium players can use payment aggregators. PayPal and 2Checkout are nothing but aggregators. Thy have infrastructure built in USA. In India they provide services under OPGSP guidelines. Their relationships with issuing banks in USA enables them to provide services in India.

Kiran says, “as on date we have many aggregators in India”. But, “we have not seen any Indian aggregator moving to US and partnering with banks like Wells Fargo or Worldpay”, who could build “an infrastructure trail in US and bring it to India and start providing cross-border payments”.

This will be a powerful option according to Kiran. This option can be used to ease out cross-border multi-currency payment system aggregation. This will give exporters alternative to PayPal and 2Checkout etc.. This will also reduce transaction costs by at least 30%. Now, an Indian merchant pays 4 to 6% plus the currency conversion costs as a compared to the 2.9% + 30 cents per transaction in USA.

The other advantage of Indian aggregator with US infrastructure will be the better understanding of the Indian merchants and the risks involved. Hence, better placed to manage the risks. “Today PayPal looks at every merchant as risky merchant”, says Kiran. The Indian players can have option of either aggregating the merchants on PayPal model. Or offer facility directly to mid and large players.  In later case the entire risk engine is managed by the aggregator. The risk engine will take care of detecting the fraud cards, stolen cards, charge-backs cards as these will not be the capability of a merchant.

In the aggregator model, it is possible to play on volumes by on boarding a large number of small and mid-size merchants. This way an aggregator can easily go to a bank and say my charge-back to sales ratio is just about 1.76%.

Kiran further adds that as an alternative risk mitigation mechanism an Industry body could register small and mid-size Software product companies (merchants) and provide some kind of a certified credit rating. This could help banks and aggregators to assess the risk associated with the individual merchant.

Krish feels, a Govt. body like MSME could build a registration system of merchants with past history, people involved etc. (this could be like extending the Performance and Credit rating scheme of MSME). “This could act as a KYC”, says Krish for the aggregator, payment gateways and banks.

Are there Indian Aggregators offering such services?

As mentioned above, banks offer services in a limited way to large merchants. Aggregators like RazorPay also provide services but again with conditions attached.

Kiran says,“Razorpay provides the services on selective basis. We do not offer the option of card details to be held by merchants”. He further informed that merchant account with many charge-backs are suspended and that cases with one-off charge types may be allowed.

So, there is conditional availability of Indian service providers of cross-border online payment gateways.

Concluding remarks and iSPIRT views

“It is a crying shame if many startups still incorporate outside India just to get a level playing field”, says Krish Subramanian. He also listed following observations:

  • there is an option that is emerging (in terms of aggregators);
  • there are no regulatory hurdles per say;
  • it is more about risk mitigation;
  • the risk mitigation is about creating awareness by closely working with banks;
  • it is also about creating awareness amongst merchants themselves to be able to understand reasons why banks act in certain way and about clarity on pricing, return and refund policy etc.
  • creating overall awareness in eco-system

iSPIRT views on the overall situation on the given problem and present policy status are as follows:

  1. For India to be a Software product nation, Indian resident companies should be able to carry out cross-border trade and receive foreign currency payments onlineseamlessly without opting for incorporating a subsidiary outside India
  2. For a healthy Software product ecosystem, it is vital that Software product companies have access to several options of payment gateway service providers with differing service offerings
  3. RBI alone cannot solve this problem.RBI policy of OPGSP allows the payment gateway players to provide services in India. The inherent risk does not encourage service providers to offer cross-border payment services. RBI may have to become more reformative in encouraging Indian international payment gateway providers.
  4. Government of India needs to intervene and devise an integrative policy that:
  5. promotes an ecosystem of Indian cross-border payment providers
  6. build a mechanism that helps banks and OPGSPs to mitigate their risk without hurting consumer interest
  7. support Software product companies in their cross-border trade by a proactive policy

MeitY can incorporate enabling policy measures in National Software product policy and offer an Indian Software product company registry that has an inbuilt mechanism to ascertain and certify a Software product company’s credibility. Also financial instrument like an Industry corpus fund could provide a common bank guarantee, that can be backup with surety bonds from individual product companies for a defined threshold.

In a digital world order, cross-border trade is going to be highly dependent on easy availability of international payment solutions. Indian merchants able to scale their international trade with ease is vital for India to be retain leadership in Software trade.

 

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Learnings from #PNCamp

For those who aren’t aware, PNCamp is a bootcamp event for early stage SaaS startups. We were lucky enough to get invited to the event in Pune on Oct 8. The event, like earlier SaaSx event in Chennai, is a no-nonsense event for founders and product folks. The day-long event had two tracks: one for B2B startups and one for B2C startups. We, at Fyle, were part of the B2B track.

learnings-from-pncampThe B2B track consisted of a mix of talks by accomplished folks — Suresh of Kissflow, Krish of ChargeBee and Ankit of AdPushup covering fun anecdotes, practical suggestions and cautionary tales. Here are a couple of interesting ones (more on my twitter).

Apart from these talks, there were “Product Teardown” sessions where a startup gets 10 mins to demo and talk about their product and the next 15 mins is spent in critical evaluation. The framework for the session is aptly summarized by this diagram:

Fyle got to participate in the Product Teardown session and the most important learnings for us were:

  • Pricing page and testimonials are really important to increase confidence in your product
  • Remove unnecessary friction during sign up flow. E.g. we had an email verification step which, in hindsight, is an overkill
  • Pick your audience and get them to a wow really quickly. E.g. you may restrict your app to G-Suite customers and optimize their experience by deep integrations
  • Put some effort into content marketing, it will pay in the long run
  • Saying NO — the lack of focus for a company reflects in its website and affects the product, team and business

Overall, the event was refreshing in the level of candor — founders were openly discussing problems with focus, hiring and customer acquisition and tips and suggestions were extremely practical in nature. It was part-educational and part-therapeutic for me and I highly recommend it for early stage startups.

Special thanks to all the volunteers and facilitators for organizing a fantastic event! One parting thought from Ankit on how to get fresh insights into your product which we’re going to institutionalize 🙂

Guest Post by Sivaramakrishnan Narayanan, Fyle.in. The original post can be accessed on Medium

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#PNCamp2: Shortlisted B2C Products for the Product Teardown Sessions

The volunteer team here at PNCamp are excited to share their list of candidates for the live Product Teardown Session. These companies have been selected to have their products analysed by our expert panel of in minute detail over a 2 hour long session. We expect that the feedback that they’ll get to take back from the session will be relevant and valuable in improving their product’s readiness.

  • Priyanka, Wishberry.in – help independent artists raise money for their projects from their fan communities
  • Sriram, Blue Sky Agriculture – Reimagining the supply chain for fruits and vegetables.
  • Vinay, FinitePaths – Get answers for your questions from people you can trust.
  • Dushyant, PodPitara – Discover curated podcasts.
  • Rohan, Garagehub – One stop for all your vehicle related problems.
  • Ajmal, Spenwise.com – Wise spending for a smart generation.
  • Murukesh, Codeflow.co – a programming platform that lets you build scalable cloud applications by simply composing reusable components.
  • Ashish Sharma, Phynart – building the future in the field of Home Automation.
  • Rohit, Koove.com – Discover exclusive products.

As you can imagine, it wasn’t easy for the curation team to go over the details of each company and pick out the right ones. If you haven’t been selected, or would still like to apply for a slot – do get in touch with us through pncamp.in.

On session day, the panel for the B2C track are:

  • Sampad from Instamojo
  • Amit from Walnut App
  • Sarang from Intouch App
  • Naman from FindYogi
  • Harshit from KPMG(UX)

The panel for the B2C track are:

  • Sampad Swain – Instamojo
  • Amit Bhor – Walnut App
  • Naman Saraogi – FindYogi
  • Sarang Lakhare – InTouch App
  • Harshit Desai – KPMG

To learn more about the format for the Product Teardown Session here.

Look forward to having you!

Guest Post by Santosh Dawara, DeAzzle & Volunteer for PNcamp.

 

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Market Maps – Thinking market instead of an idea 

thiyagarajan-m-market-maps-thinking-market-instead-of-an-idea

Starting point of a startup is an idea and it goes through a journey of product releases and pivots to reach its product market fit and further scale. Source of this idea is a brainstorming session or hot flavor of the season (foodTech, fintech etc) or even comes from past work experience of the founder, in rare some cases it is rooted in an unsolved customer pain point.

For Indian software product startups regardless of the origin of the idea when looked at through the lens of market segments a pattern seems to emerge that is too hard to ignore.

Market Map

A 2 X 3 matrix

Market Map

Parsing the market  map

  1. Before 2009  India consumer  was not a major open digital market. There were few online ticketing sites, many attempts in the e-commerce space that  did not fan out big,  telecom VAS a closed market which also existed only because of regulation gap around strong consumer privacy laws .  However in 2009 something happened along with the birth of Flipkart where consumers changed behavior, i.e started believing that they could trust making transactions online and swiped their cards. It would be hard to attribute a causal reason of whether it was ‘Cash on Delivery’, critical mass of people on internet or myriad of other reasons. It is suffice to say that market behavior changed since then. Today there are countless new ideas being tried out because this market has opened up.
  2. India SMB market on the other hand is yet to witness its Flipkart moment.  I have been a close observer on two industry (read multiple organizations collaborating efforts) attempts to wrench open this and closely involved in my last role in leading multiple experiment in creating this market. While I am very bullish about this market but the fact of the matter is that this market is yet to open up. Just like how consumers shifted mindset about transacting online, small business need to change their buying ‘tailored shirt’ mindset to buying ‘branded shirt’ mindset for this market to explode.  Open API based GST system in India may cause to be a major reason of change here.
  3. If India consumer has already exploded and India SMB is around the corner, it would not be completely wrong to say that India Enterprise is yet to germinate. There are handful few startups that have been able to sell to Indian CIO however those are exceptions than the rule.
  4. In the global consumer market there is hardly any precedence of a startup from India building a global force i.e. equivalent to a Facebook or Snapchat. Not that this may not happen, it is just that it is not happened so far because it is very hard to understand global culture nuance when based in India alone and when there are gaps in the kind of risk capital that is available to try out radical business models. There are handful instances where this is being attempted such as Zomato, Hike but the jury is still out.
  5. Indian startups are rocking the global SMB market, strategic inflection point that has made this possible is small business are searching for solution to their problems online. When solution is possible to be delivered online through Saas, the purchase consideration is based on the experience of solution (try and buy) and not based on the trusting the salesman who delivers the CD.  Given this dynamic it does not matter if the solution was built in Alabama or Alwarpet in Chennai. Comparative cost advantage of doing desk based selling from India makes it possible for price points unimaginable in other parts of the world and which in turn opens many low end markets that have been earlier priced out.  Companies that are trend setter here are Zoho, Freshdesk, Wingify, KissFlow, Kayako, ChargeBee, Hotelogix and many others.
  6. There is also good precedence of traction for the global Enterprise with more than handful examples. The pattern here has been to prove product with pilot customers in India and scale it faster with global markets. This involves migration of feet on street sales team globally, iflex has been the Zoho equivalent grand daddy to set the precedence here but recent examples are Druva, Eka and newer folks like Innovaccer, Unbxd are following suit.

There are startup ideas that are tech components and may sell into a value chain into one of these market and not directly, for example a developer toolchain. The effect of traction in the market has same implication for them.

The above map is not going to be static map and is bound to change. Certainly past is not an indicator of future however history of technology has taught that path dependency plays a huge role in shaping of markets. Thus realization of this map has allowed few startups have change their gear in reaching product – market fit or scale.  Also this map helps understand that playbook for winning a market is a different than a playbook for creating a market.

To quote Marc Andreessen

When a great team meets a lousy market, market wins.
When a lousy team meets a great market, market wins.
When a great team meets a great market, something special happens.

What are the market maps that you are seeing ?

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#PNCamp – No BS feedbacks and teardowns to build great products groundup

So, you got a startup. Great! You have a product ready and a few users/customers too, Awesome! I am sure you are super excited to take it to next level, right? But thats when the hurdles begin.

Users just do not understand it
Users don’t go beyond certain point
Our product is awesome, but Product lacks stickiness
I am not sure how to position our product
We have different kinds of users, how to deal with varied expectations of users
I don’t know where to find large number of userbase
I am a technical guy, I don’t know how to market it
User growth is very slow, we need some cool growth hacks

If some of these thoughts/challenges are lingering in your mind too, then you are not the only one. Trust me pretty much every startup goes through these hurdles in its early days. Sad reality is, vast majority fail to cross these initial hurdles and die early death.

“Almost every startup has a product, what they don’t have is users/customers”

If you are an early stage startup with a working product thats been used by a few users/customers and you are struggling through some of the above mentioned challenges, then look nowhere and block your Calendar for Oct 8th, 2016. iSPIRT is bringing PNCamp in Pune focused towards all the early stage startups.

whatsapp-image-2016-09-09-at-11-08-35-amPNCamp in pune is your grand opportunity to get candid feedback on your product and its marketing. If you are a startup with a prototype or product at an early stage with few users/customers but struggling to get further traction, then PNCamp is a great place where you could get an opportunity to showcase your product and seek feedback, inputs and suggestions on specific to your product. At PNCamp, experts will take product teardown sessions on following aspects.

  1. How to build a right product (great and useful product)
  2. How to market your product (product marketing, communication, KPIs)
  3. How to achieve 10X user growth (Use Analytics, customer feedback loop, sales tactics)

At PNCamp, India’s some of the most successful entrepreneurs are coming together to host one day focused camp and work with selected group of startups on their product, market and sales growth strategies. This one day focused action oriented efforts are equivalent to your one year of badly struggling to figure out things in dark.

Here is whats going to happen at PNCamp –

“You involve me and I learn maximum”. Keeping this in mind, PNCamp is structured in a way to maximize real action oriented learning. Its no Gyaan, No B.S. All real action, real stories, real candid feedback, real strategies, real action plan, real work toward real results. At PNCamp, successful entrepreneurs who are expert in their specific area of product, marketing, or sales growth will discuss their observations and learnings.

In case of B2B products, things such as the product quality, security, product learning curve, analytics, integrations, etc might be driving factors for initial success whereas in case of B2C products its visual appeal, user friendliness, pricing, discounts, customer loyalty, social appeal, etc could trigger the success. Hence each product need to be looked at it from various angles. At PNCamp, specific sessions are dedicated to deep dive in these areas. In B2B track, experts will discuss building a right product for B2B market, getting traction for your product, marketing strategies and sales funnel. In case of B2C track, the experts will delve into building products with focus on mobile an analytics, finding right KPI and organizing everything around it, product communication, and building a successful customer development strategy using feedback loop. After every session, a few select product startups will be given an opportunity to present their product, marketing strategy, or growth strategy. Experts and fellow participants will do a product teardown and give a deep dive feedback. In all 12 startups in B2C space and 12 startups in B2B space will get an opportunity to present and get detailed feedback.

Product teardown: In this section, select startups will provide a quick walkthrough of their product website/app. As each startup will get limited time to present, key is to stay focused on most critical or concerning area of your product. Experts and fellow participants will provide feedback on core functionality, usefulness, right fit of the product, visual and experiential aspect of the product. In the past, such product tear down has help entrepreneurs get amazing inputs in matter of minutes. Moreover it has opened up doors for more insightful beta users from the cohart. Product teardown session focuses on product flow, functionality, identifying specific KPIs and using analytics to derive insights, and immediate critical aspect that might be hindering product traction or stickiness. Founders will get actionable inputs that can be applied next day and see improvements.

Marketing/Communication teardown: Great number of startups have good products but fails on its marketing. Product marketing is all about positioning. It is all about clear messaging and creating a “hook” in user’s mind. Unique compelling product positioning is always a challenge, especially when your product has potentially multiple target segments. If your product positioning is correct, then it helps in driving marketing and create a growth strategy. In this section, select startups will get teardown about their marketing and communication strategy, how to build initial traction, building a customer feedback loop, how to think specific KPIs and organize things around it, how to use analytics to tweak marketing funnel, etc. Is the message clear and compelling enough to click with your audience, can it be improved further, etc. In the past, founders used the session feedback to improve their product message, website communication, emails, etc for which the group continued giving feedback.

Growth hack / Sales teardown: This is a piece everybody wants and wish for but is very difficult to achieve. Experts will ask select startups to present their current growth strategy and provide working session on building a growth strategy. B2B sales strategies, setting up sales engine, inside sales strategies, etc will be discussed along with tools and techniques. Useful tools, techniques and trends in B2C market, use of inbound growth hack techniques, from customer acquisition to conversion, retention and achieving viral growth will be discussed in detailed. This is a hands on session where startups will be asked to create a plan of action.

Get naked – At PNcamp, everything is transparent. So, one may think, “How can I disclose my trade secrets with entire group?”. Indeed its a valid concern, but its upto an individual founder whether and how much information they want to share with fellow participants. Our experience is that, getting naked has helped entrepreneurs more than shielding or hiding behind curtains. Plus, one unsaid rule of the camp is, “Whats said in the camp remains within the group”. Product nation is building a community of trustworthy entrepreneurs who are passionate about helping each others. Hence, its expected that you bring a transparency and will maintain confidentiality.

So, enough said about the camp and its structure. PNCamp, with this full action oriented day is looking forward to bring ton of insights to you through direct feedback and critical inputs to help you take your startup next level. This is a MUST attend camp for any early stage product startup. Do not miss this unique opportunity to catch the brains of experts and fellow participants through product feedbacks and interactions. So, if you are an early stage startup looking to take your startup to next orbit, then register yourself right away at www.pncamp.in Lets build great product nation, one prodct at a time! See you at PNCamp.

Guest Post by Abhijit Mhetre, founder at Canvazify. He is passionate about startup innovations and is a volunteer at iSPIRT

 

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Recurring Billing for SaaS. Is it available in India?

Recurring Billing  – demystified for SaaS companies

Abstract

For any SaaS Startup with India market focus, the biggest bottleneck today is recurring billing. It is not available as an open, over the counter service from payment gateways. Most startups have to work around to solve this problem. The workaround may be using an expensive international payment gateway or it may be incorporating a subsidiary in foreign geography. Many startups also move all out of India, if they can afford to do so. In the process India loses some good SaaS companies.

Reading into details, recurring billing is not banned by RBI in India. But, banks and payments gateways do not have the offering available over the counter. Complying with two factor authentication (2FA) and the associated risk of chargebacks are the reasons behind. The payment industry experts say, banks offer it but needs to cover their risk for chargeback scenarios. So, one has to negotiate with banks and therefore large players are able to avail these services.

To bridge the gap startups like Razorpay are building the aggregator payment platform that that can work between the SaaS startups and the Banks to offer recurring billing.

Since, it is not smooth enough, recurring billing is an area, which requires policy maker’s attention. To realize the full potential of a single unified market under GST,  the ‘Digital India’ requires a more open, clearly defined and an enabling policy and procedure on digital payments, at par with developed countries.

This article is based on a deep dive into the problem of recurring billing, with experts from payment solution companies Krish Subramanian, Co-founder, Chargebee (Subscription Billing & Recurring Payments Software) and Kiran Jain of Razorpay (a payment gateway aggregator).

Embedded below is a hangout video with these two experts. You may like to watch the video and/or read the blog piece below (which is built on the conversation in the video).

Some terms used in online payment industry

Recurring billing

It is a subscription driven model of charging or collecting payment from customer. Both the frequency interval of charging and amount charged are fixed to qualify for recurring billing. Software as a Service (SaaS) companies are the biggest users of this service.

Merchant: A person or business who want to sell goods or services.

Acquiring Bank: It is the Merchant’s Bank

Card holder: The buyer who owns and uses a credit/debit/prepaid card etc. to buy goods and services

Issuing Bank: It is the Cardholder’s Bank. An issuing bank issues credit cards to consumers.

SaaS industry and status of recurring billing?

SaaS startups offer products or productized services in a subscription model that runs in a per user/seat at a fixed frequency say per month. In SaaS industry, the recurring billing is often at a low cost transactions e.g. $10 to $50 per user per month.

In developed countries like USA online payment gateways and payment aggregator offer these services. A startup in India can sign for the service from these international payment gateways (like 2Checkout and PayPal) sitting in India. This  can be done with minimum paperwork and absolutely no hassles. But, the cost is almost double the cost of payment gateway services in India. The down sides are payments may not be real time. Also, currency conversion cost twice. Once, when the Indian customer pay in foreign exchange and again when the international payment gateway pays to the Indian merchant.

Problem is the Indian payment gateways do not provide the recurring billing option as seamlessly as foreign payment gateways. Hence, the need to go to foreign gateway, when an Indian SaaS company wants to sell to Indian customers.

Krish of Chargebee adds, “for SaaS companies a non-negotiable aspect to provide frictionless experience to customers is the ability to collect payments on month on month basis”. (please see the video)

Statutory position of recurring billing in India

If one reads through the RBI’s circulars on two factor authentication (2FA), there is no mention of recurring billing. The RBI’s communication vide RBI/2011-12/145 DPSS.PD.CO. No.223/02.14.003 / 2011-2012 August 04, 2011 covering card not present (CNP) transactions which includes online transactions as also the IVR transactions states following two conditions:

Based on the feedback from the stakeholders and keeping in view the interest of card holders the following directions are issued:

(i) It is mandatory to put in place additional factor of authentication for all CNP transactions indicated in para 4 of our directions dated December 31, 2010 with effect from May 01, 2012.

(ii) In case of customer complaint regarding issues, if any, arising out of transactions effected without the additional factor of authentication after the stipulated date, the issuer bank shall reimburse the loss to the customer further without demur.

For an avid policy interpreter this means 2FA is the requirement for every transaction. It is not a straight forward clear position.

Kiran Jain of Razorpay, reads in to the sentence of same communication, where it says, “The matter was discussed in a meeting of banks with the Reserve Bank of India on June 22, 2011 wherein it was emphasized by the Reserve Bank that while it was not advocating any specific solution in this regard,”. Kiran says, “From RBI perspective there is no restriction in India”. According to him recurring billing is allowed under RBI guidelines provided in first transaction 2FA is followed and there is no restriction even by banks. (please see the video)

If recurring billing is allowed why is it not available openly?

Banks have a risk in complying with the mandatory charge back, in case when customer files a complaint. The issuing banks are supposed to refund to customer in case complaint from the customer. Normally the risk is never transferred to the acquiring bank.

Kiran in the conversation talks about the lack of understanding on risk involved, by merchants in India. Banks needs to cover their risk through transaction fee. Merchants in India don’t want to pay high transaction fees, that can cover the risk involved in charge backs.

Banks are not willing to underwrite the risk for small players. This is why there are no readymade recurring solutions available in Indian online payments.

How can this risk problem be solved?

Kiran says, “the alternative is to create a partner in between the banks and the ecosystem of SaaS companies, who is willing to underwrite the risks”.  Razorpay is one such player, who is attempting to solve this problem.

Why can’t a Startup go to Bank directly? What is the way out?

The problem in recurring billing is not only the payment gateway but also the management of the subscriptions. Baking systems are all legacy systems. They are not able to handle the dynamic situations. For example, if a customer lost the card, the new card information should be updated in time. Such gaps are filled by the layer created by third party Payment Gateway solutions.

Also, this further requires some subscription management systems in an online system. Krish calls this “billing intelligence”. This can either be provided by ready made solutions like Chargebee or can also be built in-house.

Startups can solve this puzzle by availing solutions offered by companies like Razorpay and Chargebee. Razorpay reduces the complexities of recurring billing on banking side. Similarly, Companies like Chargebee reduce the complexity of “billing or invoicing intelligence”.

What more can be done on Policy side?

Krish feels, if we engage with banks and banks can build a system that can underwrite risk for small players and also make Bank realize how service providers can help mitigate risk, there can be a chain built to see a successful recurring billing system in India, easily available to SaaS startups.

Kiran’s view is, from policy perspective not much can be done as RBI does not mandate anything specific. It has do’s and don’t type of framework. His view is charge backs are like non-performing assets (NPAs). So, large merchants in India will still get recurring billing solutions from many payment gateway solutions easily and will also have in-house capability to build billing and invoicing platforms.

Looking further (iSPIRT’s Views)

If one researches hard there is possibility to find payment gateways offering recurring billing solutions in India. However, there are lots of questions asked and it is certainly not available as an across the counter service and definitely not to everyone.

Aggregator service like Razorpay have a chance to fill this gap and they will offer valuable service much needed by Startups. A combination of solution like Raozorpay + Chargebee could solve the problem for many startups.

RBI has not banned the recurring billing. On other hand it has also not put the record straight. Going further, there is a need that RBI and Government of India recognize the importance of recurring billing in a digital economy. Once the need is recognized, a layer of reform in policy framework by RBI should be added. Clear regulation that covers all stakeholders as well as encourages banks to offer recurring billing solutions, is needed. A digitally signed online agreement that is backed up by a 2F authentication in first transaction should be enough to cover the paper formalities required for a fixed amount, fixed tenure (frequency of payment) transactions. The buyer of service can revoke the online service agreement online any time. Customer’s risk is therefore limited up to the time he opts out of the service agreement.

RBI will not take actions that promote an Industry. It is Government of India, who should create an enabling policy for SaaS companies. Ministry of Electronics and IT (MEIT) can carve out a scheme that can mitigate risk of Bank, in turn helping SaaS industry. Such things should happen under the National policy on Software product being considered by MEIT.

The bottom line is that the Indian businesses must have access to multiple choices of service providers for availing recurring billing services at a low cost per transaction with a well laid out fraud protection and complaint redressal mechanism.

Both GOI and RBI needs to work together in direction of removing the bottlenecks. India is unveiling a unified digital market with GST coming in. Without seamless digital payments not only we will fall short in our dream of creating a globally competitive SaaS industry but also a fully buoyant ‘Digital India’.

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How To Choose The Name For Your Startup?

A Company name is the identity of a company and what people use to refer to it. Picking a company name at times can be harder than finding a business opportunity, and on several occasions, people have gone ahead and started their company without an apt name. This can damage the value of the company or the business itself because you are losing customers who don’t understand what your company does, too many similar companies or it’s just difficult for them to find you because of the company name.choose a name for company
The different company types are (based on name):
Private Limited – include the words ‘Private Limited’ or ‘Pvt Ltd.’ following the name of the company.
Public Limited – include the words ‘Public Limited’ or just ‘Ltd.’ following the name of the company.

Here are few things you can do to help choose the right name for your company:

Identify what your business does and which industry it belongs to

Once you have an understanding of what your company does and whom it is trying to serve, it will give you a platform for names to choose or a starting point. Remember your target audience should be able to associate with the name. Did you know Lumia didn’t sell well in Spanish countries? This is because Lumia means …..well…..err……umm prostitute in Spanish. Go figure, Nokia.

Chubbybrain is a company that funds other companies, but because of its name, ‘Chubbybrain’, no one knew what they did as they couldn’t relate the name to fundraising. ‘Xobni’ is another such example. Xobni sold email-related products until the company shut down. Xobni is literally inbox spelt backwards. Again, the market didn’t get it and that’s why no one now uses Xobni.

Now it’s time to brainstorm

Come up with a list of apt names that the company could use and check for its availability online. If another company has the same name, then you can’t use it. If the name is similar, then people will get confused again. If you come up with a name that will be difficult in communicating what the company does, then you will have to spend on marketing to help your audience identify your name with what you do. Accenture and Verizon spent millions on marketing after they had changed their Company names in an effort to rebrand themselves.

Think big, don’t get tied down

Your company has the potential to become international and cater to several markets in different economies. If you name your company after something local, it will be difficult to market it internationally. For example, if you choose a company name in a regional language or name the company after a particular region, it will be difficult to market outside those regions. One exception could be Cisco, named after San Francisco, that operates globally.

Your company name builds goodwill in time

The name has to be memorable, creative and distinctive from the rest. Apart from goodwill, it has the possibility of attracting customers, clients and several other business opportunities. Kingfisher has been declared bankrupt and some of their listed assets for sale was the company name and logo for around 330 crores. Goodwill increases the value of your company.

Sample study. Don’t be overconfident, test it out

Once you have a list of desired names, do a sample study with your friends, relatives and colleagues. Find out what they associate the name with when they first hear it. If they can zero in on what you are trying to convey, then you are pretty close to finding your company name. Don’t just go around asking people “Is this name alright for my company”?

Trademarks

A trademark is a visual symbol of the company which could be a combination of words, signature, colour, image, logo, brand name, tagline, etc. Any individual or company can apply for a ™ registration which would take 6-24 months along with a validity of 10 years, upon expiry, can be extended. A business can protect itself with the use of trademarks on its products the way Apple or Nike does.

  • Trademark Search: both online and offline have to be done. It can be done through a trademark agent or by checking the trademark office (INR 0-500).
  • Create Application: If your business or logo is unique, the trademark attorney will draft the trademark application, as long as there are no infringements with someone else possessing or using the same trademark.
  • Trademark Registration: The office will check if any objections arise from the application. If not, then it will be published in Trade-marks Journal. The approximate government fee is INR 4,000 and Attorney fee INR 3,000.

Check Domain Availability. In this age, you NEED a Domain

Your domain name is your IP address online so people can search for you and find you on the internet. You cannot use a name that someone else is already using. Leandomainsearch and bust name are just a couple of sites that can help you look for your domain name. Once you enter the names you want, it will give you what all options or combination of options that are available from which you can choose to name your domain name/company name.

Registering the Domain

One of the most common and marketed sites is GoDaddy, that offers domain names at reasonable prices. Another one is BigRock. You enter the names you want and it will give you the availability of those names which you can purchase for 1-10 years. Once the term is over, you can repurchase it, or if you choose not to, someone else can.

You will be given the option to buy .net, .web, .org. Or all three in a bundle, apart from which are info, .asia, .in, etc which can be bought separately or in a bundle.

Should you change your company’s name? Don’t be shy to fix a bad name choice

If you have chosen a company name and people still find it hard to identify you, then you should probably change the name. Rebranding your company name will also help build a good image. In the case of Anderson Accounting, the company was guilty of fraud and manipulating their books of accounts. Anderson Accounting then changed their company name to Accenture, in order to rebrand themselves and have been doing good ever since. Another example, Cadabra was the original name of Amazon. People couldn’t spell it nor did they identify with the name which was abracadabra, shortened. And the name was changed to Amazon, what we all know it by today.

Guidelines for naming a Company

Companies Act, 2013 and Company Incorporation Rules, 2014 stipulates the guidelines for naming companies. Some of these guidelines are:

  • The name should be in resonance with the company’s principal object.
  • Companies engaged in financial activities must have a name indicative of such financial activity being carried out, included in the company name.
  • Names that include the words ‘Bank’, ‘Insurance’, ‘Mutual Fund’, ‘Venture Capital’, etc., should get regulatory compliance from the respected regulatory body (RBI, SEBI, IRDA, etc).
  • Certain names require the Central Government’s approval if the company’s name includes ‘National’, ‘Union’, ‘Small-scale’, ‘Prime Minister’, ‘Federal’, ‘Statutory’, ‘Judiciary’, ‘Scheme/s’, (that may resemble ones offered by the central or state government) ‘Governor’, etc.
  • In order to name the company after the promoter or the promoter’s relatives, a non-objection form is required to be signed by the person who will share the company’s name.
  • The company needs to declare whether they have been using the name in the past 5 years in other forms of business such as sole proprietorship.
  • Every company incorporated as a Nidhi, shall have the words ‘Nidhi Limited’, towards the end of the name.
  • Once a name change has been made, only after three years can anyone avail that name.

Some of the limitations on naming your company are:

  • The name shall not be identical to the name of an existing company, nor a plural of an existing name, nor translation of an existing name in another language.
  • Generic names that have the names of places, or really general names are not allowed. For example, names like ‘Corporate Technology’, ‘Karnataka Business’ or ‘Solar Power’ will not be allowed.
  • An abbreviated name of the founders is not allowed in India. For example, ‘KPMG’ is named after all their founders. This would not be allowed as per the Companies Act, 2013.
  • A proposed name should not violate trademarks, or the Emblems and Name Act, nor include offensive words.
  • Names of patriots or people still in office or government cannot be used in a company’s name.
  • A name cannot imply any association with a foreign government or foreign embassy.
  • The term ‘State’, can only be used by a Government Company in its name. Examples are ‘Karnataka State Construction Corporation Limited’ and ‘Karnataka State Tourism Development Limited’.
  • The proposed name is identical to the name of a company dissolved as a result of the liquidation. Post 2 years, a company can then apply for the name of the dissolved company.
  • The name cannot be used if it is too similar to the name of a limited liability partnership
  • Using different spellings, spelling variations or phonetic spellings does not differentiate a company’s name from an existing name.

Don’t rush it. To some, it might be the easiest thing in the world. A random word simply popping into your head, sounding just right at just the right time. To others, the process may end up being rather gruesome. The result is all the same, though, you’ve got a match. A company name that will be just as important to you as it may be to the world.

Guest post by Krupesh Bhat, LegalDesk.com, a Do-It-Yourself legal platform for making legal documents online. LegalDesk.com helps startups with incorporation and legal documentation services. It also provides Aadhaar-based eSign service to businesses.

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

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

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

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

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

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

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

Bringing order to your sales pipeline

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

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

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

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

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

Working together as a team

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

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

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

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

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

Creating a brand following

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

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

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

Design

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

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

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

Managing the monies

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

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

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

Connecting with your customer

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

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

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

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

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

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

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

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

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A 3-Stage Power Booster for Your SaaS Rocket

When a capsule is launched into space, the initial rocket gets it off the ground. However, that rocket can only get it so high. Eventually it runs out of fuel and the structure needs to drop off. At that time, a second rocket booster ignites and continues to propel the capsule into space.

In the world of startups, getting your company into orbit usually takes a few power boosters to get there. Your initial boost may get you off the ground, but it’s not enough to get into space. Even if you are at a later stage, if you don’t have the right final rocket, you can still crash to the ground before you reach orbit.

iSPIRT offers several activities to help SaaS founders and companies right when they need it. Each of these sessions acts like a multiple-stage power booster to give your company the lift exactly when you need it.

Most SaaS companies need these three rocket boosters to achieve orbit:

  • Stage 1: Product Tear Down
  • Stage 2: Getting to $100K MRR (i.e. approx $1M ARR )
  • Stage 3: Hyper Growth – Firing all cylinders

In the product tear down session, founders get critical feedback. This is not for the weak hearted.😜

Stage 1: Product Tear Down

In this session, we help validate

  1. The core problem you are addressing
  2. Your differentiated solution to that problem
  3. How customers might discover you
  4. The consistency of your website and overall offering (audience, problem, position, price, credibility, etc.)
  5. Freemium vs free trial, simplicity to signup, signup friction
  6. The ‘shortest path to WOW’ that is appropriate for your product

The product tear down session is run by Shekhar Kirani, Venture Partner from Accel Partners, Suresh Sambandam, CEO of KiSSFLOW, and Bharath Balasubramanian, UX Architect from FreshDesk.

Here’s a bit about each of these sessions. While the principles will apply to any business, it applies much more aptly to SaaS software companies

Stage 2: Getting to $100K MRR

Your Stage 1 rocket should be enough to get you off the ground and achieve a good height with your initial set of customers. Now you have a working hypothesis that puts you in pursuit of the right product-market fit.

Your Stage 2 session kicks in when you’ve found the product-market fit to systematically grow the business. For companies at this stage, we moderate Playbook Roundtable sessions. This slide deck should give you a broad idea of what we discuss with the playbook participants.

Stage 3: Hyper Growth – Firing All Cylinders

Companies that have crossed $1M ARR are selected to attend this session. A typical SaaS company doesn’t have enough resources to pursue a lot of initiatives. Often there is a big disconnect between what founders want to pursue in S&M viz-a-viz what they should focus on to get to the first $1M as quick as possible. Therefore, Stage 2 centers around a focused set of must-do initiatives, rather than spray-and-pray on many initiatives. You might notice that many topics in Sales & Marketing are missing or discouraged in the slide deck. That is by design.

Stage 3 is extremely important because even though you’ve cleared thousands of miles, you still aren’t in orbit yet and need the final power booster to get there. For Stage 3, we bring you none other than the SaaS Superstar, Girish, Founder & CEO of FreshDesk, to share how to take your $1M SaaS company into a $5m enterprise.

If your SaaS startup is sitting on the ground or about to make a nose dive, don’t miss out in getting these booster shots to launch yourself into a grand orbit.

Oh, we also do a big gala event called SaaSx once in 6 months in Chennai, where we bring together all the SaaS founders in one place. The last three editions (SaaSx1, SaaSx2, and SaaSx3) have been blockbuster hits. And if you are in Bangalore, you can join the big crowd attending the SaaSx sessions on ‘SaaSy Bus’.

If you are a member of a SaaS founding team, you should definitely join the SaaS Insider Group and be up to date with SaaS news in the country and across the globe. Last but not the least, Avinash Raghava, Fellow at iSPIRT is the common thread among all these orchestrated activities for SaaS from iSPIRT. He is passionate about helping SaaS founders and none of this would be possible without him.

P.S. iSPIRT harnessed the collective knowledge of SaaS founders into a structured document called the Jump Start Guide for Desk Marketing and Selling. Check this out without fail.

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The fundamentals that help us grow more than 100% every quarter

At Mypoolin, we have a consistent and strong belief that a very significant aspect of building a business is keeping the fundamentals strong. The fundamentals are not just the core pillars for making the company stand as an entity, but also serve as defining the form as the firm emerges from its initial amorphous self. When we started the venture last year, we had some basics and an initial direction in mind, but we could not define those at that time.

For the first timers, we are the social payments product company of the country. We enable seamless peer to peer transactions and group transactions for all use cases, varying from movies to events to parties to outings to rent and more. Over the past 12 months, the product has grown both qualitatively and quantitatively. Starting from transactions just worth a few thousands per month to achieving a high growth rate currently, we are intent on making this product an integral part of your social lifestyle.

Mypoolin1

Let us dive into the fundamentals that continue to shape us –

Tackling a big problem

The reasons big problems are so important to be solved, is that once you solve them, half of the battle (or even more) is won. Not only does it ensure that the product can deliver, it also incentivizes the user by default to explore and use the same. Once you hit a raw nerve and resolve a crucial pain point, you ensure that the barriers to adoption are now as low as they can be, from the point of view of motivation of the user. And at the same time, when the vision is big, everyone in the team is driven as well to execute on it and be a part of it.

MyPoolin2

Simplifying a challenging solution

Well, it is one thing to say and another thing to build on it. After defining the problem and realizing the challenge in front, we started iterating on the product and building it piece by piece. All along some factors and pointers helped us in defining the direction of the product –

  • What exactly does the consumer desire? (Putting ourselves in their shoes)
  • Does our solution present itself in its simplest form? (Analyzing)
  • Are users really feeling empowered by using it? (Observing and tracking)

Mypoolin3

The above pointers will answer that whether the customers have the necessary ability to utilize our solution or not. And at the same time, since we are combining two domains of the internet viz – social network and payments into one; the product tends to become intricate in terms of its engineering. This in turn makes sure that the ability of the team is tested as well to its full potential for making the product really polished.

Discipline, Focus and Fun

Another key fundamental in running a growing company, especially in the complex and sensitive infrastructure of payments, is the presence of discipline and focus. This applies to both the phases-

  • Developing the product as well as
  • Tracking the analytics and output

Mypoolin4

At the same time, fun is always a part of the equation and the hidden gem at times for everyone to appreciate the mission as a team. In fact, the point of fun trickles everywhere, including our product as well which portrays the statement of ‘Payments made fun’. Traditionally, payments have been a painful and mundane part of our lives, but not anymore. Time to make them cool….

Wish to join one of the fastest growing ventures in the intricate, growing and powerful domain of fin-tech? Ping us directly at [email protected]

Cheers

Team Mypoolin, Rohit Taneja. 

 

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Stay-In-India Checklist – Successes So Far And The Path Forward

Over the past few months, we have witnessed a number of policy changes focused on creating a conducive environment for startups and entrepreneurship in India. Some changes go beyond the startup ecosystem and attempt to resolve the issues faced by companies/investors in general. A common feature in most such changes is iSPIRT’s Stay-in-India Checklist (SIIC). The SIIC comprises 34 issues, which were extracted from a larger list of 120+ issues, put together by the iSPIRT team after extensive consultation with various stakeholders.

With the 29th June notification of the MCA amending the Deposit Rules, a total of 29 SIIC issues have been addresses/acknowledged by various government departments. Some of the key changes that have taken place pursuant to SIIC are as follows:

  • Angel tax: Monies received by a company from certain resident investors (including angel investors) which are in excess of the fair market value of shares issued against such monies, are taxed as income in the hands of such company. This leads to significant hurdles in domestic angel investments (other popular modes of investments are exempted from this tax). Now, startups that are approved by the inter-ministerial board formed by DIPP (“Approved Startups”) have been exempted from this requirement.
  • Harmonisation of tax policy for listed and unlisted equity instruments: There is unnecessary disparity between holding periods for listed and unlisted shares for claiming long term capital gains benefit in relation to them. While the holding period for listed shares is only 12 months, for unlisted shares, it was 36 months. This, despite the fact that investment in unlisted shares, such as those of startups, carry higher risk. Now, this period has been reduced to 24 months. This relaxation is available to all companies, irrespective of them being startups.
  • Favourable tax regime for IPR: In the past several years, India has experienced that the ownership of IPR created in India does not reside in India, as tax regime for IPR in other jurisdictions is more favourable. Now, income by way of royalty in respect of a patent developed and registered in India will be taxed at 10%. This relaxation is available to all companies, irrespective of them being startups.
  • Convertible notes: One of the most popular instruments abroad for startups to raise early stage funds, convertible note, is not expressly recognised in India, and could be considered to be a form of ‘deposit’ which can be taken by a company only from its existing shareholders/ directors. Now, convertible notes of up to INR 25 lakhs per person have been permitted for startups that have registered on the StartupIndia portal (“Registered Startups”).
  • Indemnity escrows and deferred consideration: In FDI transactions, use of escrow mechanisms for indemnity arrangements and payment of deferred consideration required prior approval of the RBI. This created significant hurdles in acquisition of Indian companies by non-residents (since these terms are standard in acquisition transactions globally, and all acquires expected them in Indian acquisitions as well). Now, these mechanisms have been permitted for a period of up to 18 months and for an amount of up to 25% of the consideration under the automatic route (without the prior approval of the RBI). This relaxation is available to all companies, irrespective of them being startups.
  • Transfer from FVCI to non-resident: There is uncertainty around the transfer of shares of an Indian company by an FVCI entity to a non-resident entity. While certain custodians allow such a transfer without an approval of the RBI, other custodians require prior approval of the RBI before proceeding with such transfer. Although there is no specific regulation that requires FVCI entities to obtain prior approval of the RBI for such transfers, given the aforesaid difference of opinion among custodian (which results in delays in M&A transactions), there was a need for the RBI to clarify this issue. Now, Registered Startups have been exempted from this requirement.
  • Restriction on FVCIs from investing in all sectors: Foreign venture capital investors (FVCIs) are permitted to invest in only certain specified sectors. This is largely owing to the list of permitted sectors set out in registration certificates issued by authorities to FVCIs. Now, FVCIs are permitted to invest in all Registered Startups, regardless of the sectors they have been engaged in.

In addition to the above, the following issues have also been recognised by various government departments. The changes to resolve these issues have either been notified, or have been announced to be notified in due course:

  • Collection of foreign monies by residents in India on behalf of non-residents
  • Online filing of forms for cross border transactions
  • Simplification of incorporation process
  • Share swaps in FDI transactions
  • Venture debt not be categorised as deposits
  • Acquisition of overseas company with an existing subsidiary in India
  • Foreign subsidiaries of Indian companies investing back into India
  • Relaxation of external commercial borrowing guidelines for startups
  • Simplifying process of conversion of LLP into a company
  • Exclusion of private companies from the term ‘listed company’
  • Grant of ESOPs to promoters and independent directors
  • Single window agency for closure of failed startups
  • Permitting outbound mergers
  • Simplifying the process of private placement
  • Applicability of provisions relating to insider trading on private companies

As one would note, a significant number of material issues have either been addressed or are in advanced stage of being addressed. iSPIRT continues to interact with the government to get further relaxations on these issues, as some relaxations are restricted only to Approved Startups or Recognised Startup, or are simply limited in scope. iSPIRT also continues to push for resolution of other issues which have either not been addressed so far or are new and have not been covered in SIIC.