Freedom from fragmentation! Welcome to the ecosystem

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

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

 

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

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

Fragmentation

Welcome the ecosystem approach

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

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

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

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

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

Guest Post by Rohit Taneja, Co-Founder at MyPoolin

Announcing the first 25 successful companies attending #PNgrowth

Right. So the first batch of #PNgrowth companies is here. It has been a slog for us going through all the applications we received, and we have made sure that we are extremely fair in the way we are allocating places for our already over-subscribed program.

If you don’t know what this is about, you go here, and if you want to apply, here, better late than never.
                                25-founders-collage-1
We are going to announce the companies finalised as we go along, so they can start preparing for what will possible be a non-stop knowledge ride.
So here we go, the first 25 companies for the inaugural #PNgrowth program
    1. Ahimanikya Satapathy of Docengage,  Healthcare CRM
    2. Akshat Choudary of Blogvault, WordPress backup service
    3. Anand Krushnan of Exclusife, offers app
    4. Ankit Oberoi of Adpushup, online ad optimizer
    5. Arastu Zakia of Collegebol, education/students forum
    6. Ashwin Ramaswamy of ContractIQ,B2B Outsourcing Marketplace
    7. Dhruv Gupta of Valuehire.com, recruitment software
    8. Elvis D’Souza of Sensara, TV search app
    9. Jaineel Agarwal of Planet Superheroes, Superhero merchandise store
    10. Jofin Joseph of Hello Vibe, contact management app
    11. Koushik Shee of Effia Soft , cloud ERP
    12. Krish Subramanian of Chargebee , billing software
    13. Kumar Abhishek of ToneTag, payment app
    14. Laxman Papineni of AppVirality, growth toolkit
    15. Mrigank Tripathi of Qustn, training and assessment company
    16. Nityananda Rao of Actouch Technologies Pvt Ltd, accounting software
    17. Pritesh Vora of Uninstall.io, app analytics provider
    18. Priyanka Agarwal of Wishberry, crowdfunding platform
    19. Rahul Bhalla of Zenatix, energy hardware company
    20. Rohit Bagaria of Budli.in, used gadgets marketplace
    21. Sanjay Sahani of Optimizory, management tool
    22. Shameel Abdulla of Jiffstore, grocery supermarket
    23. Sonal Goyal of NubeTechnologies,data analytics company
    24. Srikanth Adiga of Open Specimen, biobanking informatics
    25. Vijay Mane of Albumizer , album designer
Congratulations to the startups who made it. They will receive further information in their mailboxes.

Funding Game – The rules and the hacks via @skirani & @BKartRed

The weather in Chennai was finally getting kinder & more pleasant in tune with the time of the year, much like the funding climate which has been less testing on the entrepreneur in general. Depending on whether you ask a consumer product entrepreneur or a B2B SaaS product entrepreneur, the level of optimism could vary, but it’s optimism all around.

As a pre-event runup to SaaSx2, we met at Freshdesk’s office in Chennai, for the Roundtable on “What it takes to fund a SaaS company?”.

Shekhar Kirani from Accel and Karthik Reddy from Blume, joined by Girish Mathrubootham from Freshdesk, anchored the conversations.

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Shekhar and Karthik started the round table, with some pretty interesting nuances about what numbers ought to add up, for their investment to make the returns they promised to their limited partners. The conversation touched upon what it takes to get funded at the early stages (upto Series A) and what it takes to be on that path, beyond Series A. Girish chipped in with personal examples of how Freshdesk got funded and his first-hand insight into looking at early stage startups that get funded (or not)!

Here are some bite-sized insights from the conversation that lasted for 3 hours:

On the options for the entrepreneur

  1. Indian B2B entrepreneurs have bootstrapped their startups remarkably well that it’s not an exception. If you are a B2B entrepreneur bootstrap or do more with less. Wait for the right strategic opportunity to scale. With numbers backing you up, raise for growth.

2015-10-07 11.12.22On what drives investors’ decisions

  1. Don’t get discouraged with ‘No’ from a partner of a VC firm. They have their biases and baggages. It’s the partner who has a view and not the firm. Find your champion.
  2. Most investors don’t like it if the outcome has a cap to it — there’s a maximum that you can do in the market and that sets a pretty hard ceiling to crack. In such cases, you’ve to out-execute everyone else and that’s a hard ploy and makes less exciting for the investor. Example: Would you start another CRM company now and if so why would you do what the rest of the 1600 have not done. Even if you execute well, what market share can you capture?
  3. VC firms pitch to Limited Partners (wealthy individuals, family offices, pension funds etc.) more than startups do to investors. They’ve the same issue of having to convince an LP that a certain startup that’s pre-revenue will get an exit worth $100M in 7 years. To do that in India, when there was no such exit till recently, made it even less credible.
  4. Most funds last for 10 years. 3 years to invest and 7 years to grow and nurture those investments towards exit events.
  5. Among the top quartile or decile of startups in a portfolio, one company returns the entire fund. Top 5 companies return 90% of the capital.
  6. Each startup has to be a prospect for a $500M exit, for the fund to meet its “Return on Capital Employed” goals.

On what investors look for in a startup?

  1. In a SaaS startup, front loaded costs are high. So your first two rounds are not about revenue or profitability but more about Product-Market fit and elimination of business model risks.
  2. Integrity, smartness and hard working ethics of the team are important but not sufficient. There has to be a potential for $500M exit for that startup for investors’ math to work. Anything less is already a sub-par outcome.
  3. It’s the job of the entrepreneur to make the VC look and realize how big the market is. They see a 1000 pitches a month and carry stereotypes. Help them make the context switch.
  4. Integrity cannot be stressed enough — Questions about India’s professional ethics do come up.). Indian LPs too find it hard to fathom that it’s possible to legally generate a 25x outcome from a startup, given where they come from and what they’ve seen.

2015-10-07 11.12.37On how to negotiate investment terms

  1. Clauses are there to protect the downsides for an investor. If you understand why they are there it’s easy to have a conversation around them.
  2. Most dissonance that an entrepreneur feels is because s/he does not understand the responsibilities the investor has to his/her fund and their LPs.
  3. Clauses such as liquidation preferences are there to protect the downside of the investments. So long as you cover the down-sides as an entrepreneur, your negotiation leverage for not carrying over these clauses to subsequent rounds is high — Don’t get it yet? Ask entrepreneurs who’ve raised several rounds, on how to negotiate.
  4. Drag along clause is there so that an investor can get the fund its returns as the fund comes to the end of life. If that goal conflicts with your startup’s, look for funds that are early in their life, to take money from and thereby give yourself a better runway.
  5. Everything is negotiable if your numbers are good. All downside protections kick in only during the bad times. So the best way to stay on top of the negotiations is to execute well.

Contributed by Ashwin Ramasamy, ContractIQ