Scaling Good Advice In India’s Startup Ecosystem – A Research Paper On PNGrowth Model

In January 2016 iSPIRT ran the largest software entrepreneur school in India, called PNgrowth (short for Product Nation Growth).  The central vision of PNgrowth was to create a model of peer learning where over 100 founders could give each other one-on-one advice about how to grow their startups. With peer learning as PNgrowth’s core model, this enterprise was supported by a volunteer team of venture capitalists, founders, academics, and engineers.  See iSPIRT’s volunteer handbook (https://pn.ispirt.in/presenting-the-ispirt-volunteer-handbook/)

However, unlike a regular “bootcamp” or “executive education” session, the volunteers were committed to rigorously measuring the value of the peer advice given at PNgrowth. We are excited to announce that the findings from this analysis have recently been published in the Strategic Management Journal, the top journal in the field of Strategy, as “When does advice impact startup performance?” by Aaron Chatterji, Solène Delecourt, Sharique HasanRembrand Koning (https://onlinelibrary.wiley.com/doi/10.1002/smj.2987).

TLDR: Here’s a summary of the findings:

1.
 There is a surprising amount of variability in how founders manage their startups.  To figure out how founders prioritized management, we asked them four questions:

“…develop shared goals in your team?”
“…measure employee performance using 360 reviews, interviews, or one-on-ones?”
“…provide your employees with direct feedback about their performance?”
“…set clear expectation around project outcomes and project scope?”

Founders could respond “never,” “yearly,” “monthly,” “weekly,” or “daily.”

Some founders never (that’s right, never!) set shared goals with their teams, only did yearly reviews, never provided targets, and infrequently gave feedback. Other, super-managers were more formal in their management practices and performed these activities on a weekly, sometimes daily, basis. Not surprisingly, the supermanagers led the faster-growing startups.  Most founders, however, were in the middle: doing most of these activities at a monthly frequency.

2. Since PNGrowth was a peer learning based program, we paired each founder (and to be fair, randomly) with another participant. For three intense days, the pairs worked through a rigorous process of evaluating their startup and that of their peer. Areas such as a startup’s strategy, leadership, vision, and management (especially of people) were interrogated. Peers were instructed to provide advice to help their partners.

3. We followed up on participating startups twice after the PNgrowth program. First ten months after the retreat, and then we rechecked progress two years afterwards.

We found something quite surprising: the “supermanager” founders not only managed their firms better but the advice they gave helped their partner too.  Founders who received advice from a peer who was a “formal”  manager grew their firms to be 28% larger over the next two years and increased their likelihood of survival by ten percentage points. What about the founders who received advice from a laissez-faire manager? Their startup saw no similar lift. Whether they succeeded or failed depended only on their own capabilities and resources.

4. Not all founders benefited from being paired up with an effective manager though. Surprisingly, founders with prior management training, whether from an MBA or accelerator program, did not seem to benefit from this advice.

5. The results were strongest among pairs whose startups were based in the same city and who followed up after the retreat. For many of the founders, the relationships formed at PNgrowth helped them well beyond those three days in Mysore.

So what’s the big take away: While India’s startup ecosystem is new and doesn’t yet have the deep bench of successful mentors, the results from this study are promising. Good advice can go a long way in helping startups scale.   iSPIRT has pioneered a peer-learning model in India through PlaybookRTs, Bootcamps, and PNgrowth (see: https://pn.ispirt.in/understanding-ispirts-entrepreneur-connect/).

This research shows that this model can be instrumental in improving the outcomes of India’s startups if done right. If peer-learning can be scaled up, it can have a significant impact on the Indian ecosystem.

India powers up its ‘Software Product’ potential, Introduces National Policy on Software Products (NPSP)

This is an exciting occasion for our indigenous software industry as India’s National Policy on Software Product gets rolled out. This policy offers the perfect framework to bring together the industry, academia and the government to help realise the vision of India as a dominant player in the global software product market.

For ease of reference, let us summarise some of the major things that the policy focuses on

  • Single Window Platform to facilitate issues of the software companies
  • specific tax regime for software products by distinguishing  them from software services via HS code
  • enabling Indian software product companies to set off tax against R&D  credits on the accrual basis
  • creation of a Software Product Development fund of INR 5000 crores to invest in Indian software product companies
  • grant in aid of  INR 500 Crores to support research and innovation on software products
  • encouragement to innovation via 20 Grant Challenges focusing on Education, Healthcare & Agriculture thus further enabling software products to solve societal challenges
  • enabling participation of Indian software companies in the govt. e-marketplace to improve access to opportunities in the domestic market
  • developing a framework for Indian software product companies in government procurement.
  • special focus  on Indian software product companies in international trade development programmes
  • encouraging software product development across a wide set of industries by developing software product clusters around existing industry concentrations such as in automobile, manufacturing, textiles etc.
  • nurturing the software product start-up ecosystem
  • building a sustainable talent pipeline through skilling and training programmes
  • encouraging entrepreneurship and employment generation in tier II cities
  • creating governing bodies and raising funds to enable scaling of native software product companies.

There is good cause for cheer here. The policy offers to address many of the needs of the Software Product Ecosystem. For the first time, HS codes or Harmonised Codes will be assigned to Indian software product companies that will facilitate a clear distinction from ‘Software Services’ facilitating availing of any benefits accruing under the ‘Make in India’ programme. In addition, this will enable Indian software product companies to participate in govt contracts through registration on GeM (Govt. eMarketplace).

Considering that we remain a net importer of software products at present, steps such as the inclusion of Indian software products in foreign aid programmes, setting up of specialised software product incubators in other geographies and promoting our software product capabilities through international exhibitions definitely show intent in the right direction. With a commitment to develop 10000 software product start-ups, with 1000 of them in tier II cities, technology entrepreneurs building IP driven product companies can now look forward to infrastructural and funding support. The policy also aims to go beyond metro-centric development with a commitment to develop tech clusters around existing industry concentrations, enable skilling and drive employment in non-metros and tier II cities while actively encouraging Indian software companies to solve native problems.  

This policy could not have been possible without the vision of the Honourable Minister Shri Ravi Shankar Prasad, and continuous engagement and discussions with Shri Ajay Prakash Sawhney, Rajeev Kumar and Ajai Kumar Garg from MEITY and their team.

We have seen software companies solving native problems do exceptionally well, just look at what Paytm has been able to achieve while driving digital payments in India. There is now an understanding ‘Make in India’ can help us bridge the digital divide given that Indian entrepreneurs have a greater understanding of local issues and the challenges that are unique to us.

Setting up bodies such as the National Software Products Mission in a tripartite arrangement with the industry, academia and govt. to enable creation and monitoring of schemes beneficial to native software product companies is another much-needed step that will create a forum distinct to our software product companies and help give them a strong voice.

We would like to thank Lalitesh Katragadda, Vishnu Dusad, Sharad Sharma, Rishikesha T Krishnan, Bharat Goenka, T.V. Mohandas Pai, Arvind Gupta for their diligent efforts on the continuous dialogue and inputs for the policy.

While launching the policy is a great start, its implementation is what we all will have our eyes on. Now is the moment of action. We all look forward to fast-tracking of the various proposed measures under this policy for the benefits to start showing!

References

J​ANUARY​ 15, 2019​ – ​https://tech.economictimes.indiatimes.com/news/internet/india-needs-to-win-the-software-products-race/67533374

DECEMBER 8, 2016​ – ​https://pn.ispirt.in/what-to-expect-from-draft-national-policy-on-software-products/

NOVEMBER 13, 2016​ – ​https://pn.ispirt.in/national-software-policy-2-0-needed/

MAY 10, 2016​ – ​https://pn.ispirt.in/taxation-and-digital-economy/

APRIL 29, 2016​ – ​https://pn.ispirt.in/saas-the-product-advantage-and-need/

JULY 16, 2014​ – ​https://pn.ispirt.in/government-recognizes-the-software-product-industry/

DECEMBER 11, 2013​ – ​https://pn.ispirt.in/three-waves-of-indian-software/

JULY 16, 2013​ – ​https://pn.ispirt.in/smbs-and-indian-software-product-industry-intertwined-fortunes/

JULY 4, 2013​ – ​https://pn.ispirt.in/8-truths-why-it-services-organizations-cannot-do-software-products/

India’s Health Leapfrog – Towards A Holistic Healthcare Ecosystem

In July 2018, NITI Aayog published a Strategy and Approach document on the National Health Stack. The document underscored the need for Universal Health Coverage (UHC) and laid down the technology framework for implementing the Ayushman Bharat programme which is meant to provide UHC to the bottom 500 million of the country. While the Health Stack provides a technological backbone for delivering affordable healthcare to all Indians, we, at iSPIRT, believe that it has the potential to go beyond that and to completely transform the healthcare ecosystem in the country. We are indeed headed for a health leapfrog in India! Over the last few months, we have worked extensively to understand the current challenges in the industry as well as the role and design of individual components of the Health Stack. In this post, we elaborate on the leapfrog that will be enabled by blending this technology with care delivery.

What is the health leapfrog?

Healthcare delivery in India faces multiple challenges today. The doctor-patient ratio in the country is extremely poor, a problem that is further exacerbated by their skewed distribution. Insurance penetration remains low leading to out-of-pocket expenses of over 80% (something that is being addressed by the Ayushman Bharat program). Additionally, the current view on healthcare amongst citizens as well as policymakers is largely around curative care. Preventive care, which is equally important for the health of individuals, is generally overlooked.  

The leapfrog we envision is that of public, precision healthcare. This means that not only would every citizen have access to affordable healthcare, but the care delivered would be holistic (as opposed to symptomatic) and preventive (and not just curative) in nature. This will require a complete redesign of operations, regulations and incentives – a transformation that, we believe, can be enabled by the Health Stack.

How will this leapfrog be enabled by the Health Stack?

At the first level, the Health Stack will enable a seamless flow of information across all stakeholders in the ecosystem, which will help in enhancing trust and decision-making. For example, access to an individual’s claims history helps in better claims management, a patient’s longitudinal health record aids clinical decision-making while information about disease incidence enables better policymaking. This is the role of some of the fundamental Health Stack components, namely, the health registries, personal health records (PHR) and the analytics framework. Of course, it is essential to maintain strict data security and privacy boundaries, which is already considered in the design of the stack, through features like non-repudiable audit logs and electronic consent.

At the second level, the Health Stack will improve cost efficiency of healthcare. For out-of-pocket expenditures to come down, we have to enable healthcare financing (via insurance or assurance schemes) to become more efficient and in particular, the costs of health claims management to reduce. The main costs around claims management relate to eligibility determination, claims processing and fraud detection. An open source coverage and claims platform, a key component of the Health Stack, is meant to deal with these inefficiencies. This component will not only bring down the cost of processing a claim but along with increased access to information about an individual’s health and claims history (level 1), will also enable the creation of personalised, sachet-sized insurance policies.

At the final level, the Health Stack will leverage information and cost efficiencies to make care delivery more holistic in nature. For this, we need a policy engine that creates care policies that are not only personalized in nature but that also incentivize good healthcare practices amongst consumers and providers. We have coined a new term for such policies – “gamifier” policies – since they will be used to gamify health decision-making amongst different stakeholders.

Gamifier policies, if implemented well, can have a transformative impact on the healthcare landscape of the country. We present our first proposal on the design of gamifier policies, We suggest the use of techniques from microeconomics to manage incentives for care providers, and those from behavioural economics to incentivise consumers. We also give examples of policies created by combining different techniques.

 

What’s next?

The success of the policy engine rests on real-world experiments around policies and in the document we lay down the contours of an experimentation framework for driving these experiments. The role of the regulator will be key in implementing this experimentation framework: in standardizing the policy language, in auditing policies and in ensuring the privacy-preserving exchange of data derived from different policy experiments. Creating the framework is an extensive exercise and requires engagement with economists as well as computer scientists. We invite people with expertise in either of these areas to join us on this journey and help us sharpen our thinking around it.

Do you wish to volunteer?

Please read our volunteer handbook and fill out this Google form if you’re interested in joining us in our effort to develop the design of Health Stack further and to take us closer to the goal of achieving universal and holistic healthcare in India!

White Paper On The Analysis Of High Share Premium Amongst Startups In India

“High share premium is not the basis of a high valuation but the outcome of valid business decisions. This new whitepaper by our iSPIRT policy experts highlights how share premia is a consequence of valid business decisions, why 56(2)(viib) is only for unaccounted funds and measures to prevent valid companies from being aggrieved by it”

What lies beyond the horizon: Digital Sky & the future of drones in India

Drones have been around for a long time, going back as far as World War II. For most of their history, they were considered part of the military arsenal and developed and deployed almost exclusively by the military.

However, the past decade has seen a tremendous amount of research and development in the area of using drones for civilian purposes. This has led industry experts to predict that drones will be disrupting some of the mainstay industries of the global economy such as logistics, transportation, mining, construction and agriculture to name a few. Analysts estimate a $100 billion market opportunity for drones in the coming few years  [1]. In spite of the overwhelming evidence in favour of the value created by drones, it has taken quite a few years for the drone industry to take off in a commercial sense globally.

The main reason for this has been the regulatory challenges around what is allowed to fly in the air and where is it allowed to fly. A common theme around the world is the unconventional challenges that old governmental structures have to face as they try to understand and regulate new technologies. Hence the default approach so far for governments has been reactionary caution as they try to control what are, essentially, flying robots in the sky.

However, with electronic costs coming down, the hardware becoming more accessible and the software interpreting data becomes more powerful a number of humanitarian, civilian and industrial application have emerged and as governments across the world are realizing the potential of drones, we are starting to see the first version of regulations being drafted and adopted across the globe.[2]

Closer home India has a relatively adverse approach to drones or more lackadaisical rather. [3]

But as India continues to drive to become a more technology-oriented economy the role of drones in the worlds fastest growing economy and the potential benefits it can bring are hard to ignore.[4]

However, India’s approach to drone regulations cannot be that of other major economies that have the luxury of friendly neighbours and a large network of monitoring apparatus, India has had to take an approach that has to be novel and robust. Something that balances the security landscape while also being designed to allow maximum utilization of the potential that drones offer. Out of this need to both regulate secure how and where a drone can fly and keep multi-ministerial stakeholder interests accounted for was born the Digital Sky, India’s foundational framework for all things drones.

What is the Digital Sky and how does it work?

What the Digital Sky accomplishes beautifully is to fill the institutional void that needs to be collectively fulfilled by so many institutions and make it easier for the industry and consumers to interface with the government legally through one platform. Permission to fly drone no longer requires a 90-day intimation with an arbitrary number of NOCs to be approved by umpteen number of ministerial bodies at the central and federal level. The industry and the public now know one place to interact with in order to register their drone, get recognised as a certified operator and apply for permissions and all concerned government agencies ensure their overarching interests do not interfere with the large-scale adoption of drones.  

There are crucial components required for the Digital Sky concept to work, the most central being that drone operators should not be able to fly drones if they are not approved by the government. To accomplish this the Drone 1.0 regulations revolve around the concept of No-Permission-No-Takeoff (NPNT).

Our maven Tanuj Bhojwani explaining NPNT at the DigitalSky RoundTable on 4 Dec 2018 in Bengaluru

What this implies is that unless a drone has got valid permission for a particular flight through tamper-proof digitally signed permission tokens, it will not be able to take off. The Digital Sky is the platform to automate the processing of these permission tokens as they flow in from different parts of the country without overwhelming the authorities through a flight information management system (one of only three countries to build this nationally after China and the USA). In order for this vision to come true, there will be an enormous change in the way drones are manufactured and operated. Entire new industry verticals around getting existing drones compliant, developing interfaces that interact with the Digital Sky platform and making applications for India’s needs will develop. Hence this begs the question.

How are the current state of the industry are changing with 1.0 regulations

Until the introduction of the regulations companies especially in the UAV operations were doing non-restricted work and end up becoming the jack-of-all-trades. Companies in the manufacturing domain were unclear of who is their target customer and what they needed to build. All the companies in this domain were working with no clarity on the safety and permissions.

With the introduction of the Drone Policy 1.0, there is a buzz which has been created and efforts are being made to understand the regulations by all the entities who are set to gain from it. They understand that there will be a new aspect that needs to cater to i.e. the sense of accountability.

For manufacturer’s The NP-NT mandate will be the most immediate requirement, the most common route to implement the mandate will be through changes to existing firmware architecture. The changes themselves are being driven by open source initiatives with various operators, system integrators and manufacturers contributing to the shift to NP-NT for all major drone platforms in the country. The Digital Sky has inadvertently catalysed the first industry-wide initiative to bring together all members of the ecosystem. Other requirements such as ETA bring in much-needed standardisation in the hardware space, this allows benchmarking of products, easier availability of information about the standards to look out for end users.

For operators, a massive increase in the volume of business is expected as they can now focus on getting certified drones into the air, and not so much on getting approvals. The Digital Sky brings in much-needed certainty and predictability into an industry that will be focused on balancing demand and supply of drone-related operations in a market that has a huge need for drones and their data but limited expertise to acquire and process it. This also puts onus an industry to become security and privacy conscious and insurance agencies will play an important role in this regard. It will also immensely help in changing the thought process of the companies providing services and their customers. Customers will start understanding that they also need to have a defined plan, process and execution instead of a haphazard existing process of execution.

How industry/playground will change over the coming years?

With the introduction on the regulations and a platform like Digital sky enabling the ease of doing business for the companies who are serious stakeholders in this domain, there is no limit to what developments will occur in the coming years. It opens up possibilities for utilization of Drone and its related technologies in Agriculture, Medical, Energy and Infrastructure and transportation.

The existing players will become more mature and more focused. They will understand that with regulations in place a more focused approach is the key to scale. They will look at opportunities to compete with the global market also as the solutions that are developed around the Drone Regulations 1.0 and 2.0 will be key factors that contribute to the Indian ecosystem to becoming a global standard to test, adapt and innovate drone applications and management.

What are the opportunities? What does that mean for the current and new players?

UAV/ Drones as a business was a far-fetched thought for many entrepreneurs and has been a struggling industry in the past in India. Going forward it is guaranteed that it will be one of the biggest markets in the world for UAV as a business. What the regulations and Digital Sky platform will enable is a new levelled playground ground for the UAV companies to initiate good scalable business models both existing and the ones entering new to the sector.

The existing companies with the right resources can now plan to scale their operations and also have the added advantage of doing work for the private sector in India. Due to the restrictive method of operations adapted previously the solutions to private agencies was unavailable. Now going forward the companies will shift their focus from being a B2G entity to a B2B entity. Many new businesses for UAV air traffic management, surveillance, AI and ML-based UAV solutions and deliveries will emerge out of India with technology specific to India.

If you want to join our future roundtable sessions on Digital Sky and more, please register your interest here.

The blog is co-authored by Anurag A Joshi from INDrone Aero systems, Abhiroop Bhatnagar from Algopixel Technologies and Gokul Kumaravelu from Skylark Drones

It takes time to build something successful!

Since SaaSx second edition, I have never missed a single edition of SaaSx. The 5th edition – SaaSx was recently held on the 7th of July, and the learnings and experiences were much different from the previous three that I had attended.

One primary topic this year was bootstrapping, and none other than Sridhar Vembu, the CEO and Founder of Zoho, was presenting. The session was extremely relevant and impactful, more so for us because we too are a bootstrapped organisation. Every two months of our 4.5 year-long bootstrapped journey, we have questioned ourselves on whether we have even got it right! If we should go ahead and raise funds. Sridhar’s session genuinely helped us know and understand our answers.

However, as I delved deeper, I realised that the bigger picture that Sridhar was making us aware of was the entrepreneurial journey of self-discovery. His session was an earnest attempt to promote deep thinking and self-reflection amongst all of us. He questioned basic assumptions and systematically dismantled the traditional notions around entrepreneurship. Using Zoho as an example, he showed how thinking from first principles helped them become successful as a global SaaS leader.


What is it that drives an entrepreneur? Is it the pursuit of materialistic goals or the passion to achieve a bigger purpose? The first step is to have this clarity in mind, as this can be critical in defining the direction your business would take. Through these questions, Sridhar showed that business decisions are not just driven by external factors but by internal as well.

For example, why should you chase high growth numbers? As per him, the first step to bootstrapping is survival. The top 5 goals for any startup should be Survive, Survive, Survive, Survive, Survive. Survival is enough. Keep your costs low and make sure all your bills are paid on time.  Cut your burn rate to the lowest. Zoho created 3 lines of business. The current SaaS software is their 3rd. They created these lines during their journey of survival and making ends meet.


Why go after a hot segment (with immense competition) instead of a niche one?  If it’s hot, avoid it i.e. if a market segment is hot or expected to be hot, it will be heavily funded. It will most likely be difficult to compete as a bootstrapped organisation and is henceforth avoidable. Zoho released Zoho docs in 2007, but soon as he realized that Google and Microsoft had entered the space, he reoriented the vision of Zoho to stay focused on business productivity applications. Zoho docs continues to add value to Zoho One, but the prime focus is on Applications from HR, Finance, Support, Sales & Marketing and Project Management.  Bootstrapping works best if you find a niche, but not so small that it hardly exists. You will hardly have cut throat competition in the niche market and will be able to compete even without heavy funding.

Most SaaS companies raise funds for customer acquisition. Even as a bootstrapped company customer acquisition is important. As you don’t have the money, you will need to optimise your marketing spend. Try and find a cheaper channel first and use these as your primary channel of acquisition. Once you have revenue from the these channels, you can start investing in the more expensive one. By this time you will also have data on your life time value and will be able to take better decisions.

Similarly, why base yourself out of a tier 1 city instead of tier 2 cities (with talent abound)? You don’t need to be in a Bangalore, Pune, or a Mumbai to build a successful product. According to Sridhar, if he wanted to start again, he would go to a smaller city like Raipur. Being in an expensive location will ends up burning your ‘meager monies’ faster. This doesn’t mean that being in the top IT cities of India is bad for your business, but if your team is located in one of the smaller cities, do not worry. You can still make it your competitive advantage.

Self-discipline is of utmost importance for a bootstrapped company. In fact, to bootstrap successfully, you need to ensure self-discipline in spends, team management, customer follow-ups, etc. While bootstrapping can demand frugality and self-discipline, the supply of money from your VC has the potential to destroy the most staunchly disciplined entrepreneurs as well. Watch out!

And last but not the least – It takes time to build something successful. It took Zoho 20 years to make it look like an overnight success.

This blog is authored by Ankit Dudhwewala, Founder – CallHippo, AppItSimple Infotek, Software Suggest. Thanks to Anukriti Chaudhari and Ritika Singh from iSPIRT to craft the article.

Scaling Sales: A Deep Dive At SaaSx Fifth Edition

As a first time attendee of iSPIRT‘s annual SaaSx conference, I didn’t know what to expect as we drove along the western coast of India towards Mahabalipuram – the venue for SaaSx5. From all the chatter around the event on Twitter, it looked like the who’s who of SaaS leaders in India were attending. Upon arrival, I took my seat with my colleague and looked around. There were only about 100 people in the room, very different from most conferences I’d attended in the past – a lot more exclusive, and a melting pot of SaaS founders building a diverse set of products. It had all the markings of an inspiring day, and it did not disappoint.

Starting with a keynote from the estimable founder of Zoho, Sridhar Vembu, the day was packed with talks and discussions focused on growing one’s SaaS company in the current technology landscape, primarily led by founders of notable SaaS companies of the country. One such event was an unconference on “Setting up and Scaling Sales across Segments and Geographies”, led by Ashwin Ramasamy from PipeCandy.

Picture this: about 80 founders seated in a room, circled around Ashwin who was leading the conversation about setting up and scaling your sales team. Since the flat organizational hierarchy at SignEasy, and the culture of openness at the company provide me with a wonderful vantage point of all functions across our company, including sales, I was eager to listen to the different perspectives that the founders brought to the table. At the start of the discussion, Ashwin graciously asked the audience for talking points they’d like covered, and the discussion began. A plethora of topics were discussed, starting from the very definition of inside sales, leading up to when and why to deploy an inside-sales team. Hiring and putting together the right sales team, including whether it should be in-house or outsourced, was another hot topic of debate with many founders offering their own experiences and perceptions.

The conversation then steered towards outbound sales and the mechanics and economics of that, which contributed to some of the biggest takeaways for me – things that cannot be found in a book and are only learned through experience.

The success rate of outbound sales peaks at 2%, as opposed to the 40-50% success rate you come to expect with inbound sales. This was an interesting insight, as it’s easy to assume your outbound effort is underperforming when it could actually be doing quite well. Also, you should use the interest you’re receiving through the inbound channel to refine your outbound strategy – your inbound interests are a goldmine of information on the kind of industries, company sizes, and job functions your potential customers represent. At SignEasy, we are constantly honing our outbound target by capturing as much information as possible from our inbound requests.


Further, the efficacy of your outbound sales effort is a direct function of the maturity of the market you’re in – for a saturated market with tens of other competitors, outbound usually fails to make a mark because it’s difficult to grab a potential customer’s attention. This is a great rule of thumb to decide if outbound is for you, depending on the market your product serves.

Outbound sales also requires dedicated effort rather than a ‘spray and pray approach’ – a minimum 6-month commitment is crucial to the success of your outbound strategy. Founders should be deeply involved in this initial effort, sending out 500 emails a day for at least 3 months, and tweaking and iterating through them as they get to the most effective email. It’s also important to dedicate yourself to a channel when experimenting, but also experiment and exhaust numerous channels over time to zero in on the most effective ones.


The value of this discussion, and indeed the day, was best expressed by the ferocity with which my colleague and I took notes and wrote down every piece of advice that was being dropped around the room. Being product leads of the SMB business and mobile products respectively, Phalgun and I were amazed at how much we could relate to each point being discussed, having been through and living the journey first-hand ourselves at SignEasy.

SaaSx5 was nothing short of inspiring, and we emerged from it feeling uber-optimistic about SaaS in India, and what the future holds

This blog is authored by Apoorva Tyagi, Product at SignEasy

A Look Back At How Startup India Has Eased The Journey Of Startup And Investors

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It’s been two years since the fateful 2016 budget which recognised “Startups” as a separate breed of companies unto themselves, demanding bespoke treatment from the government and authorities. The clarity brought forth helped quell the nerves of both companies and investors, who had to otherwise resort to exotic exercises, supplementary structures, and platoons of professionals to keep their entrepreneurial dreams alive.

As we all await with bated breath for the slew of reforms expected of the Finance Minister, it behoves us to see how far we’ve come and how much further we need to proceed so that a billion dreams may become a reality.

This article is the first part of a two-part series which explores how Startup India has eased the friction in the Startup ecosystem so far, from an investor’s perspective with the second part talking about the next step of reforms which would have a multiplier effect on the ecosystem.

Flywheel of Funding

More often than not, any coverage about fundraising covers the journey of startups and entrepreneurs and the travails of raising their multimillion dollar rounds. But there exists another dimension to this story, that of fund managers raising their own funds. A large section of the investor community was elated that the government recognised this oft-ignored story and created the Rs 10,000 Cr (USD 1.5 billion) Fund of Funds managed by SIDBI which invests into SEBI registered AIFs and Venture Capital Funds.

This approach seeks to galvanise an ecosystem through a flywheel effect, instead of gardening it via direct intervention. The 10,000 Cr corpus can help seed AIFs worth Rs 60,000 Cr in India, which when fully deployed, is estimated to foment 18 lakh jobs and fund thousands of Indian startups. By contributing a maximum of 20% of the corpus of a fund, many fund managers can hasten they fundraise and concentrate more on helping their portfolio companies raise, instead of competing with them.

The Fund of Funds has invested into 88 AIFs so far, thus galvanising more than 5,600 Cr (USD 873 million) worth of investments into 472 Startups.

Bringing back tax breaks, not a back-breaking Tax

The Government’s support of Indian investors found its way into the Income Tax Act, with several measures to incentivise investments into the Indian Startup ecosystem, such as:

  • Insertion of Section 54 EE, which exempts Long-Term Capital Gains up to Rs 50 lakhs provided it has been invested in the units of a SEBI registered AIF
  • Insertion of section 54GB, which exempts Long-Term Capital Gains of up to Rs 50 lakhs provided it been invested into the shares of a Startup which qualifies for section 80IAC
  • Clarifying that the conversion of debentures or preference shares to equity shares will not be considered as a transfer and thus subject to capital gains at the point of conversion (the entire Venture Capital industry is based on convertible debentures and preference shares and this move has settled long-standing disputes regarding the instruments of investments)
  • Issuing a notification that the dreaded angel tax will not apply to shares issued at a premium to domestic investors by those startups who qualify under the DIPP scheme (although the scope of this needs to be extended to rid the spectre of angel tax that haunts various investors and entrepreneurs)
  • Clarifying that the stance of the assessee in categorising the sale of listed securities held for more than 1 year as Capital Gains or Income from Business can’t be questioned by the taxman
  • Changing the definition of a capital asset to include any securities held by a Foreign Portfolio Investor, thus removing the friction arising from asset classification (a similar provision is sorely needed for domestic hedge funds and Category III AIFs)

Capital without Borders

The Startup India scheme over the past few years has rolled out the red carpet to foreign investors while rolling back the red tape. The success of this is evidenced by the percentage of funding foreign capital represents in the Indian startup ecosystem, which is 9 times higher than domestic capital investment.

Some of the initiatives include:

  • Liberalising Foreign Direct Investment into most sectors including financial services, single brand retail, pharma, media and a host of other sectors up to 100% in most areas
  • Abolishment of the Foreign Investment Promotion Board
  • Relaxation of External Commercial Borrowings (ECBs) for Startups for up to USD 3 million
  • Allowing for issue of shares for non-cash consideration to non-residents under the automatic route
  • Marshalling foreign investment into Indian entities primarily for the purpose of investing in other Indian entities has been brought under the automatic route as opposed to the previous government approval route
  • Dismantling the approval mechanism for the transfer of securities by a Foreign Venture Capital fund to an Indian resident
  • Moving most of the filings (FCGPR, FCTRS, etc) to an online window managed by the RBI (ebiz.gov.in)

Well begun is half done

The government’s efforts to improve life for Startups in investors have begun to bear fruit in tangible ways as evidenced by the reduction in the number of companies seeking to have a Delaware entity with Indian operations. The recent leapfrog in the “Ease of Business” rankings also stands testament to this.

The Government must now seek to consolidate all these gains and clarify its stance and the stance of the tax department on long pending issues which have been a bane to all startups. While we have miles to go before we sleep, we must look back and take note of what we’ve achieved before we seek to scale greater heights.

This post has been authored by Siddarth Pai of 3one4 Capital

Being entrepreneurial isn’t just for startups

An unusually hectic travel schedule this summer took me to four great cities in four weeks: London, Chicago, Dubai and Beijing. In each, I learned about at least one interesting organization. In London, I added to my knowledge about Unilever, the well-known consumer goods giant whose products range from soaps and shampoos to ice creams and soups, when I met the head of a unit called Unilever Foundry that engages with startups. In Chicago, I attended a Father’s Day event at Willow Creek, a non-denominational megachurch that averages over 25,000 attendees every weekend. In Dubai, I learned about Aramex, a company sometimes referred to as “the FedEx of the Middle East”, whose Chairman Fadi Ghandour was the recipient of the 2017 Academy of International Business (AIB) Executive of the Year award. Finally, in Beijing, I visited the Nasdaq-listed JD.com, China’s first internet company to be featured in the Fortune 500.

Four very disparate organizations, but all with an unexpected common thread that became quickly apparent to me in each case: entrepreneurial behavior. As a relatively young e-commerce retailer, JD.com was probably the most “obvious” candidate for being entrepreneurial – and from the various displays at its futuristic exhibition center it wasn’t difficult to perceive that the company was in no mood to rest on its laurels. But the hunger to stay relevant was evident at the other organizations as well. In the case of Unilever, it had quite deliberately stepped outside of its comfort zone to engage with non-traditional allies, specifically startups, in the pursuit of novel ideas and innovative solutions. In relation to Willow Creek Church, it had clearly added creative elements into its activities, borrowing from a very different template – showbiz – to infuse its worship services with a greater experiential appeal. And as for Aramex, here was a courier company that had fearlessly pursued opportunities in a volatile region which held little appeal (when it was created in the 1980s) to large international players.

Why do I describe these companies as entrepreneurial? Arguably, Unilever’s behavior can be described as proactive in that it took the initiative to add a new dimension to its partnering activities: working with startups. Willow Creek’s actions can be termed as being innovative in that, in order to enhance their efficacy, novel ideas were creatively incorporated into what some would view as boring activities. Aramex had demonstrated a propensity for risk-taking. Academics refer to these features – proactiveness, innovativeness and risk-taking – as dimensions of “entrepreneurial orientation”. Numerous studies suggest that higher levels of these specific characteristics in organizations yield better results and, as JD.com is clearly striving for, continuous strategic renewal. The important message here, then, is that being entrepreneurial isn’t just for startups in high-tech sectors; it is as relevant to large corporations like Unilever, non-profits like Willow Creek and firms in traditional industries like Aramex.

So what does it take for an organization to be entrepreneurial? Here are three lessons:

1. Recognize that it is a collective effort. It was evident to me that in all four cases, the leader at the very top was providing clear messages to organizational members, calling for creativity and dynamism. But that was not all. These organizations seemed to also have “middle managers” who had bought into the need to stay hungry, and they all implicitly or explicitly emphasized the need for attracting and retaining talent. Thus, while leaders matter, it’s not just about them. Everyone in the organization has a part to play.

2. Draw inspiration from your local environment. While there are broad similarities between these four organizations, the specifics in terms of being entrepreneurial perhaps reflect some inherently local characteristics. For instance, Unilever Foundry struck me as very global in its ethos and ambitions – not unlike London, the city in which it is headquartered. Willow Creek had “creative directors” on its staff whose passion for pushing the envelope reflected the creative edginess for which Chicago is known. Aramex’s resilience was congruent with that of Dubai’s. JD.com’s scale of ambition echoed that of Beijing’s.

3. Learn to be comfortable with contradictory ideas. All four organizations were addressing tensions. To illustrate, Unilever was exploiting its own assets (brands) and exploring new ideas via outsiders (startups). Aramex had to remain locally relevant to its core Middle Eastern base, yet also be international in its mindset and reach. Willow Creek was holding on to both the traditional and the modern. JD.com seemed focused not only on short-term competitive challenges but also on long-term strategic imperatives.

Clearly, none of these lessons is easy to put into practice. Being entrepreneurial is effortful, not effortless. It is unlikely that these organizations, or any others, always get it right. The key, however, is to strive continually.

Innofest to Innonation

Evolving from a festival of innovation to a platform helping innovators to succeed…

Over the past 3 years, while volunteering for Innofest – the platform for hardware entrepreneurs – I realized two things:

  • Doing a hardware product in India is much tougher ….
  • … but there are several resources available across the country that can make it easier for hardware companies to succeed

What was needed is a way to connect those who need the assistance and advice to those who can help and are willing to help.

The goal of this group of 10-12 individuals who selflessly give their time in organising various initiatives and events under the Innofest umbrella is to make it easier for first-time entrepreneurs and to assist them in their journey. We deliberately chose to focus on startups and individuals who were using hardware and technology to solve meaningful problems. Because that is the most underserved section of the entrepreneurial eco-system.

The initial 2 years were invested in reaching out to hardware entrepreneurs and enablers who can assist them – maker spaces, companies, mentors, investors, etc., and bringing them together to interact with each other. As with many other sectors, in hardware led innovation too, resources were concentrated in 3-4 cities, while innovators were spread across the country. These innovators usually worked on their own, often spending time and energy and money on aspects that had already been solved by someone else. Getting together problem solvers and innovation enablers was a critical first step. And the community responded enthusiastically. Over 1800 innovators turned up at the inaugural in Bangalore. Since then we have taken the initiative to Hyderabad, Jaipur, Nagpur and other cities. In fact, Prathibha Sastry, the key volunteer driving Innofest took two ‘yatras’ – once driving from Bangalore to Delhi and once Bangalore to Assam – to find innovators in small towns and tier 2 cities across India.

What she unearthed was awe-inspiring – folks who were solving local problems with their frugal innovations. However, many of these enterprising folks did not consider themselves as entrepreneurs. For them, they were just using their ingenuity and creativity in addressing a problem that they or someone in their family or community faced. They were solving for Bharat. And that we feel is the real opportunity. To encourage these inspired, enterprising and creative problem solvers to get their innovations to solve problems at a much larger scale than they have currently envisaged. To help spread their innovations to places that can benefit from these innovations. I.e. find innovators and help them in their entrepreneurial journey.

To do that, it was important that we shift gears. And at Innofest, we have.

We now have extended the goals to not just curate and connect innovators and enablers, but to also undertake programs and initiatives that will increase the chances of success of these innovations. These include providing better access to resources like maker spaces, working with large corporates in helping drive their innovation programs, creating better access to capital and markets, creating a pool of mentors, etc.

Indeed, from being a festival or celebration of innovation, Innofest is now a platform for innovators to succeed in solving problems and making our country a better place. And hence, we have also taken the bold step to change our name from Innofest to Innonation, which means using innovation to improve the nation.

Whether you are an innovator, or want to volunteer, or a company that wants to support innovation or a co-working space or maker space, do connect with us at Innonation. We need a lot more people in making this volunteer-driven platform successful.

To get a ringside view of the innovation happening across India, join us at the flagship event in Bangalore on 26th August. If you are into solving a problem for Bharat, check the agenda to see what workshops and events are most relevant for you.

See you at Innonation. The country needs you to be there.

Prajakt Raut

Founder –  Applyifi

 

 

Are you a Baba Entrepreneur? 98th #PlaybookRT

Let me set the stage for iSPIRT’s 98th Playbook held at the EKO office in Gurgaon.
 
43 Degree Celsius in a very dry and dusty Gurgaon summer, a Playbook on “The Hard Truths of Entrepreneurship” and a bunch of battle-hardened entrepreneurs of the size of a cricket team – What do you think was the result of the match?
 
To call it special would not be ‘different’ if you go by the words of the facilitator of the playbook – Abhishek Sinha, Ceo, EKO.
 
A ‘Different’ 98th Playbook may be the best description for this session which discussed business strategy, unit economics, content marketing, sales, team building and not to mention investors and fund-raising.
 
If you are like me, you may be wondering what was so ‘Different’ about it. If you attended the session, you would know, that none of the above was even mentioned. (Apologies, I think fund-raising was mentioned once)
 
So what did this eleven talk about on a Saturday afternoon.
 
It would not be incorrect to sum it up as ‘101 things an entrepreneur finds difficult to share’. It was about emotions. And I will leave you with just ————-
 
To keep the confidentiality of the participants, none of the —– points are being attributed.
 
The session began in Jeff Bezos style, with Abhishek distributing a 6 page memo about his journey as an entrepreneur. In Abhishek’s words, he was starting at a blank document for over 15 days. If I were you, I would kill to read those 6 pages. It is not worth a ‘miss’. This beautiful write-up raised the perfect questions and many follow-up questions that the participants added to, with a ‘stunned’ surprise.
 
Lets roll with the eleven.

1) Destiny is a Child

If you are a parent, you would understand that a child is spontaneous and unpredictable. An entrepreneur’s destiny ‘seems’ to be exactly the same. In Abhishek’s EKO journey, he recounts many occasions when the business was on the brink, and then something happened. Not once, but more than once. In one such occasion, a loan of Rs 6.5 crores got arranged overnight and it has been over 5 years, but the loan agreement is still awaiting signatures.
 
This was enough to get other members involved into the conversation. Everyone seemed to agree that there was some ‘force’ – very difficult for the human mind to comprehend – that conspired to make things happen. Shah Rukh Khan’s ‘kayanat‘ was also invoked to substantiate. But whether destiny always resulted in a positive outcome, well that debate continues.
 
To sum it up, it does seem that ‘Destiny favors the Brave’.

2) Create a Crisis on purpose

More than half of the group testified to this. The situation – each one was expecting some financing to happen, but because of demonetization and Trump being elected as President, the cheque did not find its way. Everybody seemed to have found a unique creative way to solving the cash flow problem whether it was a commission-based channel partnership, or a unique sales incentive or just changing the payment plan. Looking back, the participants reflected that it was only in crisis-like situations that each one of them found a unique solution, to move the business to the next level.
 
Steve Jobs has been known to drive all his businesses to the brink. In more recent times, this name has also been doing the rounds.

3) Unbundling of Payments in FinTech

For this, I guess, it would be best if Abhishek could sometimes do a webinar with screen-sharing. To put it in short, Abhishek stressed that the way in which smartphone unbundled calling, messaging, VAS which was earlier bundled in a feature phone, in a similar way, the current payment technology framework would be unbundled. This unbundling in payments would happen in ID, Source of Funds, Payment Network, Authentication, and Loyalty. Are Fintech entrepreneurs ready to build on this opportunity?

4) Recruiting – Interview the Intern | Work-Life Balance

Ambarish – Founder and CEO of Knowlarity – shared that he is involved in the interview of each team member, even interns. It was an interesting share that each participating entrepreneur listened to, with great intent. His approach at Knowlarity is to discourage candidates from joining and by creating an interview process that requires a lot of work. e.g. The interview process for interns is a 12-hour full day long interview that involves many steps like writing, quantitative, interviews and then followed by a final interview with the CEO at 8 PM on a Saturday. Only 40% survive the process and the rest 60% quit but rewarded with a chocolate on the way out. Interestingly, Ambarish also shared that how categorical they are, when it comes to the matter of work-life balance. It is made clear to the candidate that there is just work. Obviously, this was contested by some other participants in the room, including Abhishek, who have seen improvement in personal and people productivity by making attempts at work-life balance.
 
I personally thought that for the entrepreneur ‘Work is Life’. It would be interesting to get some feedback from the readers on this subject.

5) CoFounders

This topic begets a dedicated playbook session. Entrepreneurs present at the playbook did accept that CoFounders eventually move on (for various reasons including getting bored) and in the interest of the business startup, it is vital that agreements are put in place that takes care of governance of exits. It was all about the basics when it came to managing CoFounders and their interests.

6) Baba, Are you?

Don’t we love Babas in India?
 
I understand that matters of faith is a sensitive subject. I encourage you to take it very lightly. For this was a very important insight that emerged from the Playbook. This was fleetingly mentioned in the 6-page write-up Abhishek had shared at the beginning of the session. He expressed how bewildered he was, to see how some of the religious organizations in the country are able to pull off massive following without any monetary exchanges. How volunteers commit time, money and energy to such movements? The cohort attributed it to the ‘Cause’.
 
Abhishek picked up ‘Cause’ and stressed the need to reinforce it time and again in the team.
 
He went on to add that as Founders and CEOs, we all have a duty to be like a ‘Baba’. He highlighted how a Baba only encourages, inspires and supports, that is exactly how we should be to our team – A Baba.
 
Are you being a Baba?
 
If you enjoyed reading this and somewhere feeling that you missed the session, it is true, you indeed missed a ‘different’ kind of playbook.
 
You can still express yourself in the comments.
 
Have a wonderful life.
Guest Post by Rajagopalan C, Inboundmantra

Innofest Nagpur, March 2017

TiE Nagpur and iSPIRT – two iconic initiatives, committed to building a great startup ecosystem for startups in India, came together to create magic at the Nagpur Innofest on the 5th of March 2017. Innofest is a platform where innovators can connect with enablers, experts, mentors to build, create, connect, improvise & explore. It’s a movement on ‘Innovation’ in India.

The first Innofest of 2017 was held at Nagpur, with over 150 slated to attend the event. However, the organisers were pleasantly surprised to cater to over 250 people that eventually attended the event. The keynote addresses were made by Sharad Sharma, Co-Founder iSPIRT and Nagaprakasham, who is an investor. There were multiple workshops during the entire day.

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Over 10 interesting hardware products were showcased at the event. Right from a 3D printing machine, collision-detecting devices, IoT based tracking devices, ultrasonic sensors, drone technology to the very unique e-funnel.

Nagaprakasham talked about the trend of creating copycat technologies and emphasized how innovation must ensure that newer technologies are able to touch more and more Indian lives. India’s strength lies in its humongous manpower, ample farmers, cheap labour and last but not the least, its vast natural beauty. And they all must be leveraged for innovation.

Subinder Khurana, held a session on Product innovation, where he talked about the essential ingredients of innovation. He pointed out that every venture must have a story of its own that is inspiring enough for not only the customers, but also family, friends, investors and other collateral stakeholders.

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On the concept of disruption, he clarified that breaking something is easy, but it must be done creatively. Has some new technology being leveraged? Is there a good story around it? Is some equilibrium being challenged, which will add value to the customers?

Sharad Sharma spoke about IndiaStack and why it will be a critical step in helping creating new innovations for Bharath, he also explained about the building blocks as part of IndiaStack which include Aadhaar. He also spoke about how SAAS will be for India as Cyber Security is for Israel. He spoke so passionately that later during an audience interaction, Shashikant Choudhary, TiE Nagpur President felt that the entire stage was shaking and the podium would fall off. We had Radhesh Kanumury, Country Lead, Global Entrepreneur Program, IBM India Ltd having a fire side chat with Prajakt Raut. Radhesh spoke on the various technology trends giving good insights about them along with examples of innovative Startups working on those areas.

Another session, led by Prajakt Raut was on creating Business Plans. According to him b-plans are critical indicators of the real status of the business as it gives us a framework for assessing the business. The plans give us early warning signals of something that is not going right. It is important for every Founder to know the answers to these questions: What problem or opportunity are we addressing? (The market/ target audience). How are we addressing it?

How are we planning to do it? (Organisations & operations planning) what skills are required? (What are the competencies that are required to handle the business). Why are you doing it?

We also held the iKen Workshop which was facilitated by Rakesh Debur and Kavita Arora of Bangalore Makerspaces joined us to mentor the innovators. This entire activity was possible because of the support of TiE Nagpur and the people of Nagpur who joined us on a Sunday.

Some of the innovations showcased…

Traxafe is an advanced, tiny IOT based tracking device for kids, elders and cars. It’s based on GPS, GSM and BEACON technology connected with a user-friendly app to keep track of your loved ones.

E-Funnel is an electronic fluid gauging device. It measures any quantum of fluid flowing through it. All the information information of every fluid filling can be accessed through a mobile app or through our website on your desktop. It will be available for different variants of diesel generators, trucks and buses.

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ISCREAM is a device which can perform numerous operations from detecting vehicle

collision to analysing the vehicle analytics.i-Scream is assisted with our IoT-based crash sensor and emergency response software which helps us to both keep a track on you and make you feel safe at the same time.

 

 

 

 

 

 

 

 

 

 

Indian E-commerce: Moving on from GMV

It has been a nervous month for the professionals working for internet and e-commerce companies in India. Shutdowns and layoffs have been the flavour of the month, and business models have come under scrutiny. The effects of recent events at Stayzilla and Snapdeal have not been limited to job losses only. Weighed down by these developments in the sector, Rakuten, the Japanese e-tailer, has puts its India plans on the back-burner.

Stayzilla, an alternate and homestay aggregator, has shut operations. Investors including Nexus Venture Partners and Matrix Partners have invested USD 33 million across multiple rounds in the company. The founders have promised to bounce back ‘with a different business model’.

Snapdeal, announced that it will lay-off about 600 employees from the company including from its Vulcan (logistics) and Freecharge (payments) business divisions. The company has so far raised USD 1.75 billion from investors which include global heavyweights such as Softbank, Kalaari Capital, Temasek, Alibaba Group and eBay. However, Snapdeal reportedly is left with less than enough cash to survive the next 12 months. The merger talks with Paytm, facilitated by the common investor Alibaba, are not murmurs anymore and seem to be the logical next step in many ways. A very honest and important insight on the business model emerged from this episode, in which the founders admitted to ‘doing too many things’ and ‘diversifying and starting new projects while we still hadn’t perfected the first or made it profitable’.

The above incidents highlight the fact that Indian e-commerce in 2016 has been significantly different from its ‘glory days’ in 2015. GMV growth in 2016 was flat, even though long term prospects remain intact for now. The year-end sales were also impacted due to the demonetisation exercise carried out by the government. The cash on delivery (CoD) transactions, which account for approximately 50% of total GMV, were severely impacted due to the lack of availability of the new currency notes.

Figure 1: India e-tailing GMV (USD mn)

Source: Company data, IAMAI, Euromonitor, Credit Suisse

AHHHGMV, as the supreme emperor of metrics, has lost its sheen and the challengers which have come to the fore include revenue per customer (function of number of orders per year, value per order and commission), net promoter score (a measure of customer satisfaction) and overall user monetisation (including alternative sources such as advertising as well as new service offerings such as hyperlocal services).

The sustainability of business model is back in focus as a tool to evaluate potential winners and losers. Throwing money at the customers as discounts has not worked out very well for a lot of players. There has been a definite move towards trying to find other means of retaining customers. Going forward, winners are most likely to be companies that provide a differentiated customer experience. An obvious example is Amazon Prime which now brings more personalized experience to the company’s customers. Flipkart (Flipkart Assured) and Snapdeal (Snapdeal Gold) have similar offerings to enhance the stickiness of their customers. While ‘Flipkart Assured’ has seen limited success so far, Amazon Prime, launched at a very attractive price point of INR 499 per year, seems to be more suited for success going forward. Amazon has also clubbed its Netflix challenge – Prime Video offering with Amazon Prime subscription. With these offerings, the companies are trying to take focus away from discounts and towards customisation, quick delivery, consistency and reliability of shopping experience.

The control over supply side is a key element of constructing an enhanced and consistent experience for customers. Logistics is one of most prominent cost items for ecommerce firms, and depending on the category and value of the goods being delivered, could be 10% to 20% of GMV.

In India, the number of Amazon fulfilment centres has grown to 27 by the end of 2016. Shipping from stores is less efficient than from dedicated fulfilment centres. Amazon is looking to replicate their success in North America where they have invested billions in network of fulfilment centres. It has more than 75 such centres in North America, covering 25 US states. This gives Amazon an easy two-day reach over the entire US. Snapdeal has opened 6 logistics hub during 2016, with an estimated investment of USD 300 million. Paytm, flush with a USD 200 million funding from Alibaba, is reportedly firming up plans for a significant strategic investment in a logistics firm to improve its deliveries process.

The key growth drivers for e-commerce in India remain in place. There is a large aspirational population, faster and wider internet access, a never before push on digital payments and an opportunity to further penetrate the offline organised retail market. Nevertheless, the year 2016 has been a reality check. The Indian players have had to review their business models and take some tough calls to focus on sustainability. While the market may continue to be volatile in the short term, with more potential shutdowns and/or consolidation in the offing, we can now be more confident that the firms that do survive will turn profitable soon.

arvind-yadav

This is a guest post by Arvind Yadav,

Principal at Aurum Equity Partners LLP.

 

From Bootstrapped to Angeled : Is it your idea or product ?

You’ve shaped up your business idea to flag off. You have a pool of talent believing in that idea and lined up with working prototype with feedback. Now, it’s time for funding to take your idea to concept to design to product to a successful business.

Depending on the idea, startup projects can be particularly expensive and often incur new, unforeseen costs. That is particularly true of technological ideas, which are currently in vogue but require exploratory costs (to pay experts to determine if the idea is feasible) and initial product development costs. Even if a team proves the idea is feasible, they often need to build a working model or prototype to prove that to investors, which can sometimes add thousands of dollars to startup expenses.

Bootstrapped to Angeled_To_Raise_Seed_Capital 1

The vital idea behind bootstrapping in commercial means is to borrow as minimal finance as possible. In two words, you only rely on either on your own budget and savings, on some crowdfunded amount or simply on loans from friends and family. This scenario urges you to borrow insignificant amounts of money and thus keep interest costs minimal. But as the market dynamics populates further, the wider entrepreneurial community starts delivering differing views.

Guy Kawasaki has proclaimed that “you should always be a boot-strapper… too much money is worse than too little” but goes onto to suggest “if you do get offered venture capital, take it, but don’t spend it”.

Most people focus all their time and attention on building their idea, and forget that even the coolest product or service is worthless if people don’t use it. Creating a successful product or service requires two things:

  • A solid implementation of the idea.
  • People that use it.

For the best chance of success, you need to identify the smallest core of your idea that has value to your potential users, build only that, and release it.  This “minimum viable product” or MVP serves as the ultimate idea testing ground.  It lets you build a relatively inexpensive version of your idea, test it with real users, and measure adoption.

Investors see a lot of ideas, which is why they won’t sign an NDA (your idea is not original, no matter what you think). But if you have a team that has delivered products in the past, worked through adversity, and has a failure or two to learn from, then the investor can see a group of people who will protect his investment, and has demonstrated the skills to do so.

So No. An idea will not get you funded.

To be investible, a start-up needs to have a good product-market fit and the potential to scale up quickly to a large market. It needs to be defensible with intellectual property or some other competitive advantage. And it needs to have a credible team in place, people who investors will believe can execute. And there needs to be some kind of proof, also called validation, also called traction.

Building an early prototype also helps you attract tech talent, because it gives people something to look at and play with, and it communicates your idea in a more “tangible” form. Then you can shop it around to potential technical co-founders to get them excited about your vision. If you have the means to actually build a working prototype, so much the better!

Most Angel Investors (and VCs) won’t pay much attention these days without some other sign of traction, especially because the financial and technical barriers to entry are getting lower and lower. Bootstrapped to Angeled_To_Raise_Seed_Capital 2

Additionally, the current market size doesn’t matter. The market size in 10 years is what really matters. You want to be in a small but rapidly growing market. You can change everything in your start-up except the market. So spend a lot of time up front to make sure you’ve thought through your market. “Having value” and “being fundable” are two completely different things.

Two of the most valuable things that the investor community seems to have been seeing from close quarters are: customer feedback and data from pilot research, which can enable them ask questions that lead to product breakthroughs. Angel Investors would need to know how your idea has improved to a bit more than a fledged product wireframe, so that their willingness to invest into those ideas via money, and social reach can increase to ensure that the success of your product is further defines by cutting-edge product development process.

Following guidance is thus seems to have gained ground and immovable traction for all the aspiring entrepreneurs who are progressing from a Bootstrapping channels to Angeled funding:

  • Be value-driven rather than fund-driven
  • Be independent of technologies that make you lose control over your idea
  • Make the customer a base for your product than profit
  • Base your ideas on supply and demand and not on the money it can attract

Once again, this isn’t a strict definition, but the seed round is normally used to fund the initial stage of your company where you’re finding product/market fit, and the following rounds are meant to help with scaling. That said, the road from concept to readiness (aka product MVP) is long and winding. Entrepreneurs’ single greatest challenge in this sphere of activity is balancing bursting creativity with structured, method-driven decision making.

 

The Product Manager’s RuleBook

The Product Manager’s RuleBook

This post is not about “tools” which will make you (integral)dx more productive. This post is about telling you rules of the Jungle called Product Management.

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So you are the Product Manager, Right ?

You just graduated out of B-School (or even worse completed your bachelors degree) and you have been given the product manager tag in the company you decided to work in. Welcome to the Jungle. Unless you have a really f**ed up CEO or a clueless CTO, you are in for a hell of a ride. There are a dozen of definitions of a Product Manager but, here is the one that sticks –

You are the mini ‘CEO’

Welcome to the Jungle. People don’t follow rules here. Especially when it comes to product. Here are 49 rules that I have curated, over the course of 7 years, across Product, Operations and Sales.

Rules

As a Product Manager, you will be exposed to attention, and a lot of it. Mostly unwanted and discomforting. Don’t be surprised if your peers are jealous of your role. You will get pulled into every meeting. You will looked upto/at for every release. For every feature. For almost every client meeting/call. But that is least of your worries. Unless you have been a PM before, your biggest challenge would be not having a benchmark. You have no way to draw the line. Follow these rules and you will stumble less- I am personally still trying to master the art.

  1. Get sold to the product. Believe in the product yourself. If you don’t, try again. If you still can’t make your self believe it, drop it and find something else.
  2. You will get sucked up in your work schedule. Be ready for it.
  3. Don’t get sucked up every time. At times, drop the bomb on Sales and Marketing. Reality check can never hurt
  4. Learn the art of saying no. At least in your head. Practice it over a period of time with/on your CEO, CTO, Sales and Marketing (in that order)
  5. Develop a healthy relationship with your developers, QA and designers.
  6. Avoid making value judgements. What are value judgements ? The statement that you say aloud in your head without ANY authority or reliable data to back it. You always know when you are speaking from the gut. (You know who else spoke from the gut ? George W Bush)
  7. Trust your developers. Back them up. Stand for them. Pat their back and give them credit.
  8. Bet on your Sales and Marketing. Support them. Be their favourite cheer leader. Always
  9. Keep some buffer from Day 0 itself on your delivery schedule. You are surrounded by uncertainties. Every client wanted “it” yesterday and no dev will have it ready by tomorrow.
  10. Split roles between you and your CTO. Decide, who will plan and who will drive the execution. Don’t fuck this one up. Don’t take planning, because you most likely don’t understand your dev’s code.
  11. Between your CEO, CMO and you, figure out who will OBSESS about “organic growth” (SEO). You don’t have bandwidth, don’t ever opt-in for this one.
  12. Coin and propagate your own product terminology/nomenclature, before sales “oversimplifies” it or dev “rocket-sciences” it. This is a critical to build and manage perception.
  13. Write emails with keywords that you can search. Chat with keywords that you can recall and search again. You will spend significant time in forwarding old emails to dev, sales, marketing, CEO. Skip the CTO. Your CTO barely opens your email.
  14. Park your personal choices of colors, fonts and design at home. Product is being built for customer’s delight, not yours (or your investors)
  15. Like a rhetoric, keep telling point #14 to your CEO.
  16. Get a Tee that says “Good is not fast and fast is not cheap.” Boring, cliche but still right.
  17. Pulling an all nighter for product release is cool and fun, but not if you are releasing thrice a week.
  18. Remember that you don’t understand quality assurance or testing. Like everything else, QA is a skill. Unless you have learnt it, avoid claiming it.
  19. If you are building a B2B product, you definitely need a QA. If you are building a B2C product, hell as sure you need more than 1 QA.
  20. Be friends with QA and Designer. Make them feel special. You won’t exist without them.
  21. Assumption is the mother of all fuck-ups. Under communication is an assumption. Hence, under communication is a fuck up. Over communicate and play safe.
  22. Build your own narrative as an objective and data driven person. Understand and question the objective before jumping into anything (including that market research slide for the investor deck)
  23. Document everything that is made and not made. At least try.
  24. Begin you conversations with developers and designers with context. They will feel involved, aware and productive. Context helps. Always.
  25. In the same breathe, demand context from Sales, Marketing and CEO. You will be able to address their requirement faster.
  26. You will always be able to sell better than your entire sales team combined. But again, don’t do it.
  27. Keep your Company Logo Product Logo, favicon, Product Description (1 liner, 5 lines and 1 pager) always ready. Anyone can ask for this. Anytime.
  28. Plan ahead for a week. Do so on a Saturday/Friday Evening. Do it on a Sunday night if you have to but NEVER on a Monday morning.
  29. CEO’s often talk sense. Listen to them.
  30. Not everything that your CEO said was actionable. Don’t act on everything that your CEO says. They most likely didn’t expect action themselves.
  31. Build your own opinion about the industry, domain, and the product. Attend conferences/events focused on your industry.
  32. CTO’s can/will have walls. Be inquisitive ( read pushy)
  33. You need to be aligned with your CEO, Sales, Marketing and CTO. Don’t forget your actual job (Mini CEO/Get-Shit-Done)
  34. There is nothing better than pen paper when it comes to maintaining lists. There is nothing better than pen paper when it comes to wire-framing.
  35. Don’t boil the ocean with every release planning. Every dog has his(/her) day. You will have yours on the day of bug bashing.
  36. Avoid falling sick. Exercise daily. Meditate daily. And buy a Macbook air
  37. Nothing will go wrong if you are late by two minutes late in sending that presentation/ releasing your product update. Be right and late rather than being sorry and on time. If your Sales team can’t hold for a client for 2 mins, imagine..Again, plan better next time and avoid being sorry.
  38. Next time, a Sales guy says that “it was you and your product” that costed him/her a sale. Gulp down your ego. Hear them out. They are ranting. The next day, give it back to them. Patiently.
  39. Your role needs you to seek feedback. Proactively. Ideally once a month, from all your peers. Similarly, your feedback for your peers is critical.
  40. Sales folks are hired for selling. They most likely, can’t make presentations. Live with this fact. Make a template for them. Engage your sales team by changing the template’s colours every 10th week.
  41. There is never a bad time for having chai/coffee. Though Obama doesn’t drink coffee. But again, you are not Obama.
  42. Content writing is NOT your forte. Nevertheless, write the copy for your website or someone else will write something that you never made/promised/planned. Rant about it, if you ever hire a content writer
  43. Create your own reports, dashboards and product performance benchmarks. Do this before the developers starts developing.
  44. Start your day with numbers of the previous day.
  45. Learn to let go, of things you like. Your favourite features, CEO’s favorite feature, colors, fonts, processes and evening dates.
  46. In hindsight, you will always be right. Move on.
  47. You job needs you to be a swinging pendulum. Hah. Self-Pity mode is awesome. But, don’t let it stretch for more than few hours
  48. Last but not the least, remember to laugh about that how, once upon a time, everyone including your head of sales, marketing lead, CEO, CTO and dev ops were clueless about the house of cards that “you” got “built”
  49. In the end, make your own list. And pass it on.

Author – Vivek Khandelwal

Founder of Datability Solutions, a technology startup building iZooto, a web push notification platform for user engagement and retention.