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A Day at Startup Bridge – Crafting Strategic Partnerships

For our most recent Startup Bridge Salon on May 9th, we had planned for sixty 1-1 strategic partnership meetings between 11 B2B startups and 35+ US corporates. In the weeks leading up to the event and the week post-event, we clocked 115 meetings. Read more to learn about the event & program, and how you can participate or get involved. 

 I got 10 meetings with decision makers through StartupBridge which is worth 1000 business cards at a trade show. (Raviteja, CEO @Moengage, May 2019)

I made 18 connects out of which 11 are of extremely high value. (Aditya, CEO @FirstHive, May 2019)

History of StartupBridge, M&A/PSP Connect

In 2013-14 the M&A Connect (and Business Exchange BEX) program was established as part of iSPIRT’s Market Catalyst pillar to help solve the problem of extremely low “exits” to “investment” ratio for startups in India. Strong “exits” are healthy markers of a mature startup ecosystem, closing the cycle of capital flows. The program consisted of developing a strong match between the global corporates interested in acquisitions (buy-side) and Indian startups (sell-side). 

The initial problem was a discovery issue where Indian startups were not on the radar of these potential acquirers. The M&A connect program activated the India radar, by engaging the buy-side to collect deep virtual mandates, and use it to match and make warm connects with the sell-side, at times hand-holding the connect process to several favorable outcomes. 

In this program, we found that our startups were not effective at pitching their story to a potential acquirer. This resulted in a few aborted connections. Additionally, it became clear that the path to an effective M&A lay in facilitating potential strategic partnerships (PSP), which if nurtured has the potential to blossom into investments or acquisitions. Strategic partnerships can surface in the form of technology or GTM/distribution level enfgagement between startups and larger corporates. It can open several doors instantly, making distribution easier, revenue growth faster and gives the startup multiple options.

The M&A Connect program morphed into PSP Connect (Dec 2016 onwards) and the program goals moved from pure M&A to building strategic partnerships. iSPIRT partnered with TiE leaders in Silicon Valley to create the Startup Bridge India initiative (SBI), where many buy-side companies were invited to meet and explore strategic level engagement with highly curated sell-side startups. 

The Startup Bridge Approach

Over the last 3 years, the SB team, iSPIRT volunteers and TiE partners, have helped B2B SaaS/enterprise startups refine their air-game, and engage in partnership discussions with high conversion outcomes. 

We have connected 45 startups to Fortune 1000 corporations and in the process catalyzed $200M+ of value in terms of PSP (potential strategic partnership), customers and M&A. (Manu Rekhi, Inventus Capital & Startup Bridge)

The key value proposition is to help startups scale revenue by 10x in 2 years through meaningful PSP connects with decision-makers at global Fortune 1000. In turn, these corporations leverage SB to engage with highly curated startups to get access to technology and product gaps. 

We are effectively the bridge over the chasm that most startups struggle with, and the potential disruption that many corporates are worried about.

Startup Selection

Did you know that ~50% of Unicorn enterprise startups in the Silicon Valley have an Indian founder or co-founder and had origins or back-offices in India? 

Our stringent startup selection process is essential for matching the “Who in India” with the “Who in USA”. Data from the program over the years have shown that the startups which stood to leverage the program effectively and benefited the most were in the ARR range of $500K to $5M. Hence SB’s high-level criteria for inducting B2B enterprise/SaaS startups into the program focus on a) having a global product-market fit, preferably in the US, with b) a strong footprint & revenue (~$1M ARR), and c) bringing deep technology, high revenue potential and/or a high growth momentum. 

PSP Wishlist

Karthik & Vinod discuss their key partnerships approach

On the buy-side, it is critical to engage corporates who can enable the 10x growth for these startups. Most startups see partnerships as tactical like with a reseller, system integrator (SI), channel/OEM partner… A strategic partner goes beyond tactical value. A startup can explore and collaborate with a PSP to accelerate its strategy in the emerging focus area. In return, the PSP provides a rocket boost to the startup’s customer acquisition, distribution, branding, and/or a holistic product strategy. Having such a partner can also significantly impact startup valuation.

As a startup, you need to think about a PSP early in the game at the ‘Flop’ and not at the ‘Turn’. You need time to develop a PSP and you need to start early. (Vijay Rayapati, Nutanix, Jul 2018)

If you think of the value chain of your customers, their vendors, integrators, solution & platform providers, a strategic partner may lie above you and your peers, and a level or two above your target customer. Often high growth customers can transform into strategic partners. We help the startups think through their PSP wishlist and make relevant recommendations.

Startup Air Game

Pitching to a PSP company is very different from the pitching to a customer or to an investor. A well-articulated pitch can make a difference between a yawn and a wow! A great startup pitch highlights their Mission, problem statement, their solution & approach, the product/platform overview, key metrics & traction, unit economics of growth & acquisition, testimonials, market size & drivers, and finally their ask. 

I thought I knew my pitch and had the details at my fingertips. But then I started getting really valuable, thought-out feedback…I had to focus on pitching to partners, not customers. (Pallav Nadhani, FusionCharts, Dec 2016)

Mentor feedback sessions during the boot camp

It takes 100 hours per startup to articulate their value proposition into a pitch deck of only 10 crisp slides. The initial hours creating & refining their pitch deck with assigned mentors. It is followed by a day-long boot camp before the event where they are grilled through their pitches by the SB team, startup & corporate mentors from the industry, and successful entrepreneurs.The multiple rounds of feedback not only cover their proposition, but also helps weave in the founders’ story, and develop their stage presence, and tonality. Post boot camp they work on the critical feedback with their individual mentors, sometimes even redefining their models & assumptions, and final dry runs with the SB team. The results at every SB event have been astounding 7-min founder pitches amazing every attending corporate and industry leader. 

Tapesh and his amazing 7-minute “technicolor” pitch deck

PSP Virtual Mandates & Exclusive Connects

Vamshi 1-1 connects over the roundtable.

We have found that startups require 2 points of support for effective partnership outcomes. First, crafting warm connects based on virtual mandates. Second, prime focus on shepherding the startup-partner conversations on a rolling basis. The unmet need is to have 1-1 connects with the right person on common ground.

I went from first discussion into pricing in one week with a Fortune 10 company.  Getting in front of the decision maker is all the difference. As a founder/CEO I can close the sale without the long drawn out sales process. (Sanjoe Jose,  CEO @Talview, May 2019)

Bringing PSP companies into our network, we connect with key profiles within the company on their build-buy-partner outlook. This helps in surfacing several latent areas of focus for partnerships, investments or acquisitions. Constructing the virtual mandate out of these relations is key to recommending a high-potential match between the startups and corporates. 

All startup bridge sessions and introductions are curated and by invite-only. 

Exclusivity made the quality of event and connections even more important. I attended because of an impressive amount of my peers from other Fortune 1000 companies. (Rahul Kamath, VP Oracle, May 2019)

Impact to Date

The stringent startup curation criteria ensure high potential innovation & growth partnerships for corporates. The intense boot camp and mentoring hours help startups develop highly effective positioning in the market. The latent virtual mandates enable effective match-making resulting in extremely relevant growth opportunities for the startups.

If I had to do this on my own each of these connections would have taken 8-12 weeks of effort.

Though these events get significant attention & traction, the goal of the SB program is to deliver these connections on a rolling basis. Here are some stats and anecdotes across the years:

  • 19 out of the 45 startups in the SB cohorts have grown 10x in the past 2 years.  
  • 749 connections to decision-makers have been made to-date with >$200M of value creation in terms of partnerships, customer purchases, and M&A. 
  • 121 PSP connections from the May 9th event and beyond.  
  • 3 exits and 1 more on the way.
  • Focus on quality and value creation has resulted in consistent high NPS 56-81. This focus on quality is the core principle of this community lead effort and the hallmark of success so far. 

What can you do?

Shifting from its pro-bono, volunteer-run orbit, Startup Bridge is transforming into a mature, scalable global program. By broadening the corporate network reach beyond Silicon Valley, and expanding support to startups of Indian origin regardless of domicile, the program is poised to benefit startups and corporates at scale. Upcoming SBDays are being planned for New York, Bay Area, Japan. Startup Bridge continues to be mission-driven, helping fill a critical gap in strategic partnership building for Indian origin startups. 

If you are a startup or would like to refer a startup to be part of the SB program please fill the partnership application form. Alternately you could email us at [email protected]. 

If you are a corporate exec and/or can help us with decision-makers (CXOs, EVP/SVP, GM), or key influencers (VP/Director of Partnerships, Corporate Development) please email us at [email protected]. 

[This post could not have been possible without inputs from the SB Team & iSPIRT volunteers, Dipty Desai, Jibin Jose, Manu Rekhi, Raju Reddy, Sharad Sharma, Sijo George, Rajan Thiyagarajan, Vrushali Malpekar, and volunteers from the previous Startup Bridge/PSP Connect program.  Also, personal thanks to all the volunteers, mentors, and the participating startups for making the SB Salon on May 9th successful.]

Some more photos from the salon

Whatfix pitch by Khadim
Vivek pitching iZooto
Predera’s pitch by Vamshi
Vishal on Seclore
Side 1-1 with Flex
Hitachi giving feedback on Startup Bridge
Workday commenting on Startup Bridge
Ashish with Israeli Panel
Side 1-1 with Salesforce
Peer networking
Corporate Attendees
Corporate Attendees
Nimesa at boot camp – pitch feedback
Moengage at boot camp – stage presence feedback
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SaaS 3.0 – Data, Platforms, and the AI/ML gold rush

An impending recession, the AI/ML gold rush, Data as the new oil, SaaS Explosion…
The SaaS landscape is changing rapidly and so are the customer expectations!

18 months ago, I came across a message that India is a premier hub for global B2B SaaS, just like Israel is a hub for cybersecurity. At first, I did not think much of it, but after having interacted with many SaaS founders and observing their painful growth journey, I realized the potential in these words. Yet, a series of market shifts are changing the world order of SaaS putting at test India’s position as a premier hub for SaaS.

TL;DR

The SaaS 3.0 market shifts are changing how global customers perceive value from SaaS products:

  • Tools which provide higher levels of automation & augmentation are valued more.
  • Comprehensive solutions in place of single point products is a preference.
  • Interoperability across the gamut of systems is an expected norm.

Startups, you have to build your new orbit to solve for these evolving needs. First, focus on delivering a 5x increase in customer value through an AI-enabled proposition. Next, build your proprietary data pot of gold, which can also serve as a sustainable moat. Lastly, leverage platforms & partnerships to offer a suite of products and solve comprehensive customer scenarios.

Read more on how the convergence of market shifts are impacting SaaS 3.0.

Quick background

While the SaaS industry began over 2 decades ago, many say it is only now entering the teenage years. Similar to the surge of hormones which recently brought my teenage daughter face-to-face with her first pimple. And she is facing a completely new almost losing battle with creams and home remedies. In the same vein, convergence of several market shifts – technology, data, economics, geopolitics – combined with deep SaaS penetration is evolving the industry to a new era. This rare convergence – like the convergence of the nine realms in Thor Dark World – is also rapidly changing how customers perceive the capability of SaaS products.

Convergence #1 – SaaS penetration is exploding!

I learned from Bala at Techstars India that they received a record number of applications for their first accelerator program. 60% of these were building or ideating some form of B2B SaaS offering. It would seem to justify the message above, that SaaS in India has grown legs, building a true viral movement, replicating momentum. Yet in these large numbers, there is also a substantial ratio of repetitive products to innovations. Repetitive in say building yet another CRM, or mindlessly riding a trend wave such as chatbots. Without an increased pace of innovation beyond our existing successes, we cannot continue to be a premier hub.

In 2018 SaaS continued to be the largest contributor to cloud revenue growth at 17.8% (it was down from 20.2% in 2017). Competition is heating up in all categories of SaaS. 10 years ago, an average SME customer was using 2 apps, now it averages at 16 apps. 5 years ago, a SaaS startup had on average 3 competitors, now a SaaS startups averages at 10 customers right out the door. Many popular SaaS categories are  “Red Oceans”. Competing in these areas is typically on the basis of features or price, dimensions which are easy for any competition to catch up on. There is a need for startups to venture deeper into the sea and discover unserved & unmet customer needs in a “Blue Ocean” where they have ample opportunity to fish and build a sustainable moat.

AppZen started with an opportunity to build conversational chatbots for employees, helping them in an enterprise workflows on various aspects like sales & expenses, and several other companies are doing the same. But as they went deeper to understand the customer pains, they were able to identify an unserved need and pivoted, leveraging the same AI technology they had built, to solve for T&E expense auditing. Being a first mover to solve this problem, they are carving out leadership in this underserved space and is one of the fastest growing SaaS startups of 2018.

Convergence #2 – Impending recession in 2019/2020!

On average recessions come every four years and we are currently 9 years from the last recession. The war between the Fed vs the US govt on interest rates, the recent US govt shutdown on a frivolous $B wall, the tariff and trade war between the US and China, are all indicative reasons for an upcoming recession. In such an uncertain economy, customers experience reduced business activity and alter their behavior and preferences:

  • Customers will become crystal clear about satisfying their core needs versus nice-to-haves.
  • They will seek high automation tools to help not only cut costs but also to make strategic decisions for an upside.
  • Many will prefer a suite of tools instead of buying multiple single point products.
  • They will also slow down POC, investment, partnership activities.

In a way, this is mixed news. Companies often pursue low-cost digital products with SaaS being a natural choice. However, combined with the competitive SaaS landscape, businesses become very selective. To be recession-proof startups must:

  1. Collaborate and partner with other vendors to build a shared view of the larger customer scenarios. Innovate to share (anonymized) data/intelligence.
  2. Partner to deliver a comprehensive solution instead of solving for a gap. 
  3. Invest & experiment in building solid AI-enabled automation for improving efficiency and decision making.

E.g. Clearbit’s approach to provide API and allow customers to leverage the value it provides, by integrating with common platforms such as Slack or Gmail which customers frequently use. In this approach they are reducing app switching and embedding the niche usecase into the larger customer workflow environment.

Another e.g. Tact.ai is helping increase sales team efficiency and bring visibility of field data to the leadership team. They are not only solving the core salesforce data entry problem for field sales, but with better data in the system, businesses now get better visibility about sales activities and can take effective strategic decisions.

Convergence #3 – the AI/ML gold rush!

During the dot com & mobile rush in early 2000, I watched many a friend jump ship to build a startup. At that time the web was flush with rich content, but the mobile web was in its early growth and innovative ways to bring web content onto mobile phones were being explored. Automated conversion of HTML to WML was a hot topic. But the ecosystem conditions were not aligned for completely automated WML transformations. Several startups in this space including my friend’s startup shut for such reasons.

More recently in 2016-17 Chatbots were projected to be the next big thing and it too suffered from similar misalignment. Chatbots were the first attempt to bring AI/NLP for customer interaction. However, they lacked the depth of ecosystem conditions to make them successful. 

  1. Bots were treated as a panacea for all kinds of customer interactions and were blindly applied to problems. 70% of the 100,000+ bots on Facebook Messenger fail to fulfill simple user requests. This is partly a result of not focusing on one strong area of focus for user interaction.
  2. Bots were implemented with rule-based dialogues, there was no conversational design built into it. NLP is still in its infancy and most bots lacked data to provide meaningful interactions. They were purely a reflection of the level of detail and thought that went into the creation of the bots.

AI/ML, however, is suffering from the “hype” of an “AI/ML hype”. There is a considerable depth within the AI/ML ecosystem iceberg. Amazon, Google, Microsoft…OpenSource are continuously evolving their AI stack with higher and higher fidelity of tools & algorithms. You no longer need fancy degrees to work the AI tools and automate important customer workflows or scenarios. 

Yet it is easier said than done. Most startups on the AI journey struggle to get sufficient data to build effective ML models. Further, data privacy has increased the complexity of sharing data, which now resides in distant silos. While internal proprietary data is a rich source of patterns, often times it is incomplete. In such cases, entrepreneurs must innovate, partner, source to build complete data as part of their data collection strategy. A strong data collection strategy allows for a sustainable moat. 

AIndra multiplied 7000 stains into 7M data points by splitting into microdata records. DataGen a startup in Israel, is generating fake data to help startups train models. The fake data is close enough to real data that the use is ethical and effective. Startups like Datum are building data marketplaces using blockchain to democratize data access. 

As mentioned many of the AI tools are limited in their constraints. Meanwhile, getting familiar with the capabilities and limitations of the necessary tools will help form a strategy path to solving the larger customer scenarios. 

Tact.ai faced the constraint by the limitations of the Alexa API. However, instead of building their own NLP they focused on working around the constraints, leveraging Alexa’s phrase based recognition to iteratively build value into their product. During this time, they continue to build a corpus of valuable data which will set them up for high growth when the NLP stack reaches higher fidelity.

Solving for the Hierarchy of Customer Needs

The convergence of SaaS penetration, AI/ML, data & privacy, uncertain economy & global policies… the customer expectations are rising up the Maslow’s hierarchy of needs. SaaS 1.0 was all about digital transformation on the cloud. SaaS 2.0 focused on solving problems for the mobile first scenarios. In the SaaS 3.0 era, the customer expectations are moving to the next higher levels. They will:

  • Prefer comprehensive solutions in place of single point products.
  • Expect interoperability across the gamut of systems.
  • Need tools which provide higher levels of automation & augmentation.

For startups who want to fortify their presence in the SaaS 3.0 era :

  1. Begin with a strong AI value proposition in mind, regardless if it is AI-first or AI-second. Articulate the 5x increase in value you can deliver using AI, which wasn’t feasible without AI. 
  2. Build your proprietary data pot of gold. And, where necessary augment with external data through strategic partnerships. A strong data lever will enable a sustainable moat. 
  3. Leverage platforms & partnerships to offer a suite of products for solving a comprehensive customer scenario.

Remember it is a multi-year journey, Start Now!

 

I would like to acknowledge Ashish Sinha (NextBigWhat), Bala Girisabala (Techstars India), Manish Singhal (Pi Ventures), Suresh Sambandam (KiSSFlow), and Sharad Sharma (iSPIRT) who helped with data, insights and critical feedback in crafting this writeup. Sheeba Sheikh (Freelance Designer) worked her wonderful illustrations which brought the content to life. 

Interesting Reads

17-Dec Developing Strategic Partnerships for B2B SaaS PlaybookRT

How is developing partnerships different from selling to customers? What are the Dos & Dont’s? What can you expect on this journey? Get inspired by direct insights from CloudCherry’s experience on building partnerships with companies like Microsoft, Cisco, Nielsen, Salesforce and more. Interact with founders on this critical aspect of building partnerships for growth & scale. The partnerships playbook will help clarify these and other deeper questions on building Deep Strategic Partnerships.

We are building a new cohort of 20 startups for our Potential Strategic Partnerships program. If you are interested to be part of the cohort this playbookRT is a requirement.

Click to Register for the Strategic Partnerships Playbooks Track. (limited invites)

Our Maven

 

Vinod Muthukrishnan

Founder CloudCherry

 

 

This is a product startup founder/CXO (+1) invite-only events. Venue details will be sent along with the confirmation of your registration.

RoundTables are facilitated by an iSPIRT maven who is an accomplished practitioner of that Round-Table theme. All iSPIRT playbooks are Pro-bono, Closed room, Founder (+1), invite-only sessions. The only thing we require is a strong commitment to attend the sessions completely and to come prepared, to be open to learning & unlearning, and to share your context within a trusted environment. All key learnings are public goods & the sessions are governed by the Chatham House Rule.

24-Nov Deep Strategic Partnerships PlaybookRT In Bangalore

Strategic Partnerships is one of the 3 shifts for SaaS, and Vijay Rayapati provided very grounded insights on partnership building at SaaSx5. One of the takeaways was that pitching to a strategic partner is very different than pitching to an investor or even to a customer.

The partnership mindset is different from sales, says Abhishek. Come, join us to learn ‘How do you change your perspective from acquiring customers to cultivating partners? Why partnerships are critical? What are the tangible and intangible outcomes?’ The partnerships playbook will help clarify these and other deeper questions on building Deep Strategic Partnerships.

We are building a new cohort of 20 startups for our Potential Strategic Partnerships program. If you are interested to be part of the cohort this playbookRT is a requirement.

Click to Register for the Strategic Partnerships Playbooks Track. (limited invites)

Our Maven

 

Abhishek Kumar

Founder ToneTag

 

 

This is a product startup founder/CXO (+1) invite-only events. Venue details will be sent along with the confirmation of your registration.

RoundTables are facilitated by an iSPIRT maven who is an accomplished practitioner of that Round-Table theme. All iSPIRT playbooks are pro-bono, closed room, founder-level (+1), invite-only sessions. The only thing we require is a strong commitment to attend the sessions completely and to come prepared, to be open to learning & unlearning, and to share your context within a trusted environment. All key learnings are public goods & the sessions are governed by the Chatham House Rule.

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SaaSy bear SaaSy bear what do you see?

Shifts for SaaS - SaaSy Bear

I see 3 shifts critical for me!

Taking a line from the popular Brown Bear children’s book, I believe that our SaaS startups have a real opportunity to leverage some leading shifts in the global SaaS evolution. While there are many areas of change – and none less worthy than the other – I am highlighting 3 shifts for SaaS (tl;dr) which our entrepreneurs can actually work with and help change their orbit:

  • Market shifts with AI/ML for SaaS to build meaningful product & business differentiation,
  • Platform Products shift to transform into a multi-product success strategy,
  • Leveraging Partnerships for strategic growth and value co-creation.

Some background

I joined iSPIRT with a goal to help our community build great global products. I believed (and still do) that many entrepreneurs struggle with the basics of identifying a strong value proposition and build a well thought out product. They need strong support from the community to develop a solid product mindset & culture. My intent was to activate a product thinkers community and program leveraging our lean forward playbooks model.

I had several conversations with community members & mavens on playbooks outcomes and iterating our playbook roundtables for better product thinking. I realized that driving basic product thinking principles required very frequent and deeper engagement with startups. But our playbooks approach model – working in a distributed volunteer/maven driven model – is not set up to activate such an outcome. Through our playbooks model, our mavens had helped startups assimilate best practices on topics like Desk Sales & Marketing, something that was not well understood some years back. This was not a basic topic. The power of our playbook RTs was in bringing the spotlight on gaps & challenges that were underserved but yet highly impactful.

As a product person, I played with how to position our playbooks for our entrepreneur program. I believe our playbooks have always been graduate-level programs and our entrepreneurs are students with an active interest to go deep with these playbooks, build on their basic undergraduate entrepreneurship knowledge, and reach higher levels of growth.

The product thinking and other entrepreneurial skills are still extremely relevant, and I am comforted by the fact that there are many community partners from accelerators like Upekkha to conclaves like NPC and event-workshop formats like ProductGeeks which are investing efforts to build solid product thinking & growth skills.

As the SaaS eco-system evolves, and as previous graduate topics like desk sales & marketing are better understood, we need to build new graduate-level programs which address critical & impactful market gaps but are underserved. We need to help startups with meaningful & rapid orbit shifts over the next 2-3 years.

Discovering 3 Shifts for SaaS

Having come to this understanding I began to explore where our playbooks could continue to be a vibrant graduate-level program and replicate our success from the earlier playbooks. Similar to an entrepreneur’s journey, these three shifts became transparent through the many interactions and explorations of SaaS entrepreneurs.

Market Shift with AI/ML for SaaS

There is no doubt that AI is a tectonic shift. The convergence of big data availability, maturity of algorithms, and affordable cloud AI/ML platforms, has made it easy for SaaS startups to leverage AI/ML. During a chance roundtable learning session on Julia with Dr. Viral Shah & Prof Alan Edelman, it was clear that many entrepreneurs – head down into their growth challenges – were not aware of the realities behind the AI hype. Some thought AI/ML should be explored by their tech team, others felt it required a lot of effort & resources. The real challenge, however, is to discover & develop a significantly higher order AI-enabled value to customers than was feasible 2 years ago. While AI is a technology-driven shift, the implications for finding the right product value and business model are even greater.

As I explored the AI trend I saw a pattern of “gold rush” – build a small feature with rudimentary AI, market your product as an AI product… – making early claims with small changes which do not move the needle. It became clear that a step-by-step pragmatic thinking by our SaaS startups was required to build an AI-based leapfrog value proposition. This could help bring our startups to be at “par” and potentially even leap ahead of our global brethren. Here was an opportunity to create a level playing field, to compete with global players and incumbents alike.

To validate my observations, I did quick small research on SaaS companies outside of India on their approach with AI. I found quite a few startups where AI was already being leveraged intrinsically and others who were still trying to make sense. Investments varied from blogging about the AI trend, branding one as a thought leader, to actually building and delivering a strongly differentiated product proposition. E.g.:

There are no successes, yet! Our startups like Eka, Wingify, FreshWorks, WebEngage… have all been experimenting with AI/ML, stumbling and picking themselves up to build & deliver a higher level of value. Some others are setting up an internal playground to explore & experiment. And many others are waiting on the shore unsure of how to board the AI ship.

How do we enable our companies to create new AI playgrounds to analyze, surface, validate and develop higher order customer values & efficiencies? To chart a fruitful journey with AI/ML there are many challenges that need to be solved. And doing it as a group running together has a better chance of success.

The AI+SaaS game has just begun and it is the right time for our hungry entrepreneurs to Aspire for the Gold on a reasonable level playing field.

Shift to Platform Products

As market needs change, the product needs a transform. As new target segments get added different/new product assumptions come into play. In both these scenarios existing products begin to age rapidly and it becomes important for startups to re-invent their product offerings. To deal with such changes startups must experiment and iterate with agility. They require support from a base “internal” platform to allow them to transform from a single product success strategy to scaling with multiple products strategy.

This “internal” base platform – an infrastructure & layout of technology components to interconnect data & horizontal functional layers – would help to build & support multiple business specific problem-solution products (vertical logics). The products created on such a platform provide both independent as well as a combined value proposition for the customers.

Many startups (Zendesk, Freshdesk, Eka, WebEngage…) have undertaken the painful approach of factoring an internal platform to transform their strategy & opportunity. Zoho has been constantly reinventing itself and launching new products on a common platform, some of which are upending incumbent rivals in a very short period of time. WebEngage transformed itself from a “tool” into an open platform product.

“As the dependency on our software grew, customers needed more flexibility to be able to use their data to solve a wide range of business problems…significant difference in the way we build products now. We have unlocked a lot of value by converting ourselves into an open platform and enabling customer data to flow seamlessly across many products.” – Avlesh Singh, WebEngage

The effort to build an internal platform appropriately architected to support growing business needs (many yet unknown) is non-trivial and requires a platform thinking mindset for increased business development. It must be architected to allow rapid co-creation of new & unique product values in collaboration with external or market platforms. This can help the startup be a formidable player in the growing “platform economy”.

Leveraging Potential Strategic Partnerships

A strategic partner offers 2 benefits for startups. First is the obvious ability to supercharge the startup’s GTM strategy with effective distribution & scale. How does one make a strategic partnership? Pitching to a strategic partner is very different from pitching to a customer or investor. PSPs look for something that is working and where they can insert themselves and make the unit economics even better. 

“I thought I knew my pitch and had the details at my fingertips. But then I started getting really valuable, thought-out feedback…I had to focus on pitching to partners, not customers.” – Pallav Nadhani, FusionCharts

The second leverage with a partner is the ability to innovate in the overlap of the partner’s products & offerings and the startup’s product values. A good partner is always looking for startups which can co-create a unique value proposition and impact an extremely large customer base.

“…we still have only three four percent market share when it comes to customers. So if we have to participate we have to recognize that we are not gonna be able to do it alone we’re going to have to have a strategy to reach out to the entire marketplace and have a proposition for the entire marketplace…you need to (do it) through partnerships.” – Shikha Sharma, MD Axis Bank

Both these partnership intents if nurtured well can bring deep meaningful relationship which can further transcend scale into a more permanent model (investment, M&A…).

Working with the 3 Shifts of SaaS

While each shift is independent in its own importance, they are also inter-related. E.g. an internal platform can allow a startup to co-create with a partner more effectively. Partners are always interested in differentiated leading-edge values such as what is possible with leveraging AI/ML. Magic is created when a startup leverages an internal platform, to co-create a strong AI-enabled value, in the overlap & gap with potential strategic partners.

And that’s what I see

I see a vibrant eco-system of SaaS startups in India working on creating leading global products. Vibrancy built on top of the basic product thinking skills and catapulted into a new orbit by navigating the 3 shifts.

“Reading market shifts isn’t easy. Neither is making mindset shifts. Startups are made or unmade on their bets on market/mindset shifts. Like stock market bubbles, shifts are fully clear only in hindsight. At iSPIRT, we are working to help entrepreneurs navigate the many overlapping yet critical shifts.” – Sharad Sharma, iSPIRT

Through our roundtables, we have selected six startups as the first running group cohort for our AI/ML for SaaS playbooks (Acebot, Artoo, FusionCharts, InstaSafe, LegalDesk & SignEasy).

If you are hungry and ready to explore these uncharted shifts, we are bringing these new playbooks tracks for you.

Please let us know your interest by filling out this form.

Also, if you are interested in volunteering for our playbook tracks, we can really use your support! There is a lot to be done to structure and build the playbook tracks and the upcoming SaaSx5 for these shifts for SaaS. Please use the same form to indicate your support.

Ending this note with a sense of beginning, I believe that our startups have a real opportunity to lead instead of fast-follow, create originals instead of clones. They need help to do this as a running group instead of a solo contestant. It is with this mission – bring our startups at par on the global arena – that I am excited to support the ProductNation.

I would like to acknowledge critical insights from Avlesh Singh (WebEngage), Manav Garg (Eka), Shekhar Kirani (Accel Partners), Sharad Sharma (iSPIRT). Also am thankful for the support from our mavens, volunteers & founders who helped with my research, set up the roundtables, and draft my perspective with active conversations on this topic: Ankit Singh (Wibmo/MyPoolin), Anukriti Chaudhari (iSPIRT), Arvi Krishnaswamy (GetCloudCherry), Ganesh Suryanarayanan (Tata GTIO), Deepa Bachu (Pensaar), Deepak Vincchi (JuliaComputing), Karthik KS (iSPIRT), Manish Singhal (Pi Ventures), Nishith Rastogi (Locus.sh), Pallav Nadhani (FusionCharts), Praveen Hari (iSPIRT), Rakesh Mondal (RakeshMondal.in), Ravindra Krishnappa (Acebot.ai), Sandeep Todi (Remitr), Shrikanth Jangannathan (PipeCandy), Sunil Rao (Lightspeed), Tathagat Varma (ChinaSoft), Titash Neogi (Seivelogic), and many other volunteers & founders.

All images are credited to Rakesh Mondal 

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StartupBridge India – Strengthening Potential Strategic Partnership to the world

startup-bridge-india

There are many dimensions to India becoming a Product Nation. A thriving  local market is critical, which are shaped by changing consumer preference and policy.  Also important is increased trade in areas of comparative advantage.

Digital consumer market in India that opened few years ago saw its waves and cycle of valuation however it is already witnessing its next shift from India Metro to Bharat due to technology and regulation disruption going hand in hand (aka India Stack).

An undercurrent that has been largely unnoticed is emergence of B2B companies from India. Top 30 enterprise startups in India that are tracked in the iSPIX B2B is $10.25 billion last year. Saas market for Indian startups is exploding — and is on pace to be over $10 billion annually by 2025.

Like Israel is to Cybersecurity, India is becoming Saas capital for the world.

Ease of doing business in India is improving, out of 34 items in Stay In India check list part of Startup India Policy, 29 critical ones are fixes in progress.

Cross border partnership of US-India startups always existed, it is the right time to come together as software product industry to strengthen this linkage to highlight this new dimension. Two related initiatives to towards this

Initiative 1 –  India Technology Product Exits Industry Monitor 2016, measuring liquidity especially global.  

iSPIRT and Signal Hill in partnership is releasing our annual report for 2016 on state of exit deals in India. During 2014 & 2015, India witnessed a Product Technology funding boom with over $10bn getting invested in consumer tech / e-commerce companies and $1bn in enterprise tech start-ups. Whilst funding levels in 2016 have seen a steep decline (54% decline during first 3 quarters), mainly on account of a very steep drop in hedge fund activity, M&A in Product Technology with $1.34 billion in exits during the first 3 quarters (from 113 transactions), is on track to beat 2015 levels (137 transactions with $1.35bn transaction value) which was a record year for Indian Product Technology M&A. Furthermore, many global Tech majors including the likes of Apple, Google, Facebook, IBM, Naspers and Salesforce have now completed at least one Product Tech acquisition in India. However the large majority (81%) of M&A transactions are still very small (<$5m in transaction value), with the bulk (>70%) of the transaction value in the last 3 years being accounted for by 7 large (>$100m) M&A transactions. Hence there is currently a missing middle in the $5-100m deal range in Product Tech M&A in India. With an increasing number of companies that received funding during the 2014 & 2015 funding boom achieving scale during the next couple of years, we expect Product Tech M&A levels in particular across mid-size and large transactions to pick-up multi-fold from here.

Detailed report here

Initiative 2 – StartupBridge India, strengthening foundation to  increase cross border linkages.

Towards enhancing cross border linkages iSPIRT is organizing a conference called StartupBridge India in partnership with TiE SV and Stanford Center for International Development (SCID) on Dec 2 at the Stanford campus.

This conference will bring top 30 business software startups from India to the US with aim to foster cross-border partnership and potential strategic opportunities.

The conference is designed to be a symbolic and relationship-building bridge between top Indian SaaS and deep tech startups and US companies, to forge long-term relationships.

More details here www.startupbridgeindia.com