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Platform Thinking: How To Get Startup Ideas

How does one find new startup ideas?

Every business is built around solving a customer pain. Solving a customer pain creates value which in turn, if successfully harnessed, can be monetized. Platforms, in particular, connect demand and supply to solve customer pain on both sides.

Platform Thinking And Startup Ideas

One of the patterns for new startup ideas, that I often see in platforms, is the following:

Match an unmonetized/unvalued surplus with an unsatisfied scarcity. 

This requires a unique combination of two factors:

1) Unmonetized/unvalued surplus: This implies that there is some form of surplus which cannot be monetized at the moment. However, given the opportunity, the owners would want to monetize it. A similar dynamic exists for surplus that isn’t currently valued by an audience/market (e.g. a person’s creativity).

2) Unsatisfied scarcity: The second important factor is scarcity. More specifically, scarcity that isn’t currently optimally satisfied. There might be solutions to the scarcity but none of them are optimal enough.

startup-ideasA good balance of both factors is required. If the scarcity is already being addressed, there may not be any need for a new solution. If the surplus is already monetized, it may be difficult for the producer to engage with more means of monetizing the surplus.

Hence, both aspects are equally important for the platform to exist. Also, depending on which of the two aspects is stronger, the seeding of the platform may start either with tapping the demand or with harnessing the surplus.

At the very outset, let me clarify that this is one of many different patterns for finding new startup ideas. Even among platforms, many different form of patterns exist.

Understanding Surplus And Scarcity

Surplus may exist in various forms. It may be a surplus of time, attention, money, physical commodities. Let’s look at a few examples below:

AirBnB: 

A surplus of accommodation in a particular location during a certain time period

MEETS

A scarcity of accommodation in that same location during the same time period.

Amazon Mechanical Turk, TaskRabbit: 

A surplus of time to perform certain tasks

MEETS

A scarcity of time to perform those same tasks.

KickStarter, IndieGoGo: 

A surplus of investable capital

MEETS

A scarcity of capital

SkillShare: 

A surplus of niche skills and talents

MEETS

A scarcity of niche skills

Quora: 

A surplus of knowledge on a niche topic

MEETS

A scarcity of knowledge on the same topic

Zilok, Rentoid, Neighborrow:

A surplus of physical items

MEETS

A scarcity of those same physical items

YouTube: 

A surplus of niche creativity

MEETS

A scarcity of niche entertainment

This model isn’t limited to online networks alone. Offline spaces also allow this model if you can achieve concentration of supply within a limited physical space. Coworking spaces like The Hub are an example of such a model, matching a surplus of office space with those in need of one.

A Final Note On Platform Ideas

For a given idea,

1. Identify the commodity that’s being traded, a target segment where a surplus exists and a segment with a scarcity

Again, surplus and scarcity that are currently not being utilized or satisfied are likely to come on board much faster.

2. Determine degree of overlap between the two target segments to allow the transfer to occur

Since scarcity and surplus need to be matched, there should be a high level of overlap between the two sides. Hence, it often helps to start by targeting a micro-market which provides a good concentration of demand and supply.

3. Determine factors based on which the two sides will be matched

The matching needs to be determined based on certain factors to ensure that the scarcity and surplus successfully satisfy each other. Quora determines matches through an “Ask To Answer” feature which surfaces the users most likely to have an answer to a certain question based on their history of answers on that topic. AirBnB matches accommodation surplus with scarcity based on time (exact dates) and location (exact place).

In summary,

Match an unmonetized surplus with an unsatisfied scarcity. 

This article was first featured on Sangeet’s blog, Platform Thinking (http://platformed.info). Platform Thinking has been ranked among the top blogs for startups, globally, by the Harvard Business School Centre for Entrepreneurship

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Joydeep shares his insights, learnings and challenges of building Qubole, a big data service used by Pinterest, Quora and Nextdoor.

Joydeep Sen Sarma and Ashish Thusoo started Qubole, a managed Hadoop-as-a-Service offering, in late 2011. Since then they have seen an impressive growth counting some of the well known names such as Pinterest, Quora and Nextdoor as their customers and raising a total of $7m of funding till date.  They were recently mentioned as the one of the top 10 Hadoop startups to watch by CIO.com and Qubole Data Service was selected as InTech’s Top 50 Most Innovative Products from India. Qubole is headquartered in Mountain View, California and has an engineering office in Bangalore, India.

ProductNation had a brief chat with Joydeep to learn about his experiences of building a product company from India. This article touches upon some of the insights gathered from the discussion.

Starting up

Ashish Thusoo and Joydeep Sen Sarma
Ashish Thusoo and Joydeep Sen Sarma

Joydeep Sen Sarma and Ashish Thusoo, batch mates from IIT-D moved to US soon after their graduation to pursue Masters. They worked with different companies in various technical roles and eventually came together again at Facebook where they worked with the Data Infrastructure team for close to 4 years. At Facebook, they created the social network’s big data infrastructure and Apache Hive. Those 4 years at Facebook not just exposed them to the big data market but also helped them form a strong network in Silicon Valley. When they found themselves questioning what they want to do next, it was clear that they are going to follow their passion for technology and build a product company. “We started brainstorming on what customers wanted to buy from us? What the market needs are? What to build? We got a small room and started writing code”, says Joydeep.  Joydeep & Ashish built on their knowledge of the big data market and came up with the idea behind Qubole. They leveraged their network to find the initial customers and also managed to raise a seed capital of $1m to fund their product development.

Their starting up story highlights that two key things that strengthened their position as they were starting up – firstly the credibility and depth of knowledge they gained through their experience at Facebook and secondly the strong network they formed in Silicon Valley.

Tapping the Indian market

We have seen that many of the successful start-ups such as Zoho Corp, Druva, and Fusion Charts are growing by acquiring international customers. This poses a curious question – Is the Indian market very small or unattractive?  Joydeep admits that it would have been difficult for them to achieve a similar growth if they had been just India focused. “We had Quora as one of our initial customers. Acquiring such a customer would have been very difficult in India. It is not impossible to build business from India but getting the initial customers is hard. For a business like ours having an international presence is required.” He also quickly pointed out that Indian market is quite big if you build a product for the masses. “To build a business completely focused on the Indian market, one needs to pick a problem that is big and not niche. Many people build something and then hunt for a big market. That is a wrong approach. One needs to build something that has high leverage. Leverage can be measured as Revenue per employee or Revenue per engineer. Given that equation, mass market products can grow exponentially focusing just on the Indian market”.

Coming back to enterprise product start-ups, targeting a broad international market remains the most attractive approach to fuel growth. Joydeep applauded the efforts of iSPIRT and NASSCOM for taking efforts to help start-ups with M&A and go-to market.

Acquiring Talent

Every year close to 1.5 million students graduate with an engineering degree in India. But still many start-ups quote finding talent as one of the top challenges. As per Joydeep finding an engineering talent at the start-up phase is not a big challenge anymore. He mentioned “During my time the cream of the engineering talent from India used to either move out of the country or pursue non-tech careers. Most of my peers from my 1996 Computer Science batch didn’t stay in technology sector.  But I see the situation changing now. The volume of engineers we produce nowadays is way higher. Even if we lose a few good developers to the developed economies, still we have a good supply of entry level engineers. Overall the quality of engineers has improved considerably. Even company’s incentive systems are changing to reward good engineers.” Qubole currently has 20 member engineering team in India working on backend, frontend & UX and a 10 member team in US.

Though this sounds promising, the situation is not the same once a company starts scaling up and is looking for highly experienced technical experts. “In India, we struggle to find talent with a strong depth of knowledge. If one were looking for hands-on systems engineers with 15 or more years of experience – it would be very hard, if not possible, to find such people in India. The US and Silicon Valley remains the go-to place to hire experts”.  On the brighter side, India is seeing an interesting trend of reverse brain drain with many returning back to India after a long career in US. A study conducted by human resource and recruiting firm Kelly Services India in 2011 estimated that 300,000 Indian professionals working overseas will return between 2011 and 2015. As per a study done by Harvard Law School, 50% of the NRI’s returning to India plan to start new ventures. Joydeep observes that currently the top management of many successful start-ups in India is headed by US returned people.

Challenges in building a business in India

Qubole has been actively growing and managing teams both in US & India. However operating in India comes with its own set of challenges.

  • Infrastructure has been a continuing pain point in India especially in Bangalore. “Because of complete lack of mass rapid transit and bad traffic conditions, many employees spend a significant amount of their commuting. Or they are forced to work from home. Aside from impacting us individually, the startup ecosystem suffers as a whole. It is hard to pull in professionals from across the city for networking events. Basic things like an easily accessible world class conference center are lacking. India needs to take some cues from countries like Singapore and build better infrastructure. It is ironical that Singapore which is small compared to Bangalore in the IT sector hosts significantly more and much larger events in this category” says Joydeep.
  • Unnecessary government regulations cripple the start-ups. “Indian government has too many random rules and a lot of gatekeepers. For e.g the labor regulations for hiring blue collar workers are extremely stringent and scary.” Joydeep admits that he avoids taking up any activity that ties him into the web of government rules and regulations. “We do not hire blue collar workers and do not do sales from India as taxation levels here are very high”.
  • Product start-ups also face a lack of financing. Joydeep observes “In India, the appetite to finance risky software is less. We would have struggled to raise seed finance in India”.  It is unfortunate that India has startup tax law which makes it further difficult to raise seed capital. Instead the Indian government should follow the Israel model and introduce “Angel’s law” under which a substantial tax benefit is given to individuals who invest in qualified Israeli R&D companies.

Most of the above challenges require government intervention and we can just hope that the new government takes steps to make Indian ecosystem more conducive to starting up.

The discussion with Joydeep reiterated on the potential that Indian product companies have in international markets. This requires careful planning, strong network in international markets and ability to manage international sales along with managing R&D in India. Though setting up and operating a product company in India is not as smooth as other start-up ecosystems, still India offers a strong technical talent pool and other cost advantages which can be used to our advantage to compete in the global market.

As Qubole plans its next phase of scaling up, ProductNation wishes the team a lot of success in the coming future.

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Interviewstreet’s Role in Recruiting Software Developers

Launched in 2009, Interviewstreet’s recruiting tool helps companies hire software programmers. It was the first Indian company to be chosen for an incubation program at Y Combinator, a Silicon Valley seed fund. Co-founder Vivek Ravisankar discusses the company’s journey to a differentiating recruitment product. This article is brought to SandHill readers in partnership with ProductNation.   

Please give me the elevator speech about what your company does. 

Vivek Ravisankar: We are on a mission to connect great talent with great opportunities in the fastest, efficient and the most fun way. We use coding challenges and contests to help companies hire programmers. Our product is used by startups (Drchrono, Matterport, etc.), fast-growing companies (Palantir, Evernote, Box, Quora, etc.) and large companies like Amazon, Facebook, Walmart, etc.

Is the contest aspect what differentiates your product in the recruiting marketplace? 

Vivek Ravisankar: There are a lot of testing platforms on the Web, but most of them focus on testing through multiple-choice questions, poor programming questions or good programming questions with no customization to the hiring company.

We worked around these parameters to build the best platform to screen programmers. It includes theoretical and real-world coding challenges that are customizable as much as possible by every customer to match their bar. Performance is measured on both speed and accuracy.

Has the tool made a difference in your own company’s recruiting? What challenges have you encountered as a startup that you didn’t anticipate?

Vivek Ravisankar: I didn’t anticipate that hiring people would be so tough. A good guy has at least three companies competing for him. It takes a lot of convincing and a lot of people talking to get the person on board.

If you could go back and start your company all over again, what would you do differently the second time around? 

Vivek Ravisankar: I would fail fast. We took a long time to figure out that our first product (mock interviews) wasn’t working well. 

Please describe one of your company’s lessons learned and how it affected your product development. 

Vivek Ravisankar: We learned to test the app thoroughly before we make a major production push. It’s very easy to get hooked into the “move fast, break things” model, but it may not work if you are in the enterprise business. Your product is being used by large enterprises and any change breaks their process and flow, which is hugely unproductive for them.

This was a big learning when we almost screwed up a good relationship with a customer because of a component that broke. Since then, we have constant tests that run in the background testing every part of the application to ensure nothing breaks.

Read the complete story at Sandhill.com

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Product development is stimulating

“Vision without action is a dream. Action without vision is wasting time. Vision with action can change the world.” Joel Author Baker. Abhiraj Malhotra is “Technology Head & Evangelist” – SchoolPad at Chalkpad Technologies Pvt. Ltd. 

Abhiraj is a passionate software developer and an entrepreneur, whose vision is to infuse productivity into organizations towards a positive change. His interest is in web technologies, web application development, and user interface designs. The Malaysian hockey federation recognized Abhiraj’s work and appropriately awarded him for designing and developing Hockey Champions trophy 2007 official website. This is an astonishing achievement! Today, Abhiraj’s flagship product is “Assistwindow.” 

The content of this interview has the potential to increase your organization’s productivity. Read on….

Please tell us your story that inspired you to be an entrepreneur.
Even when I was studying in school, I loved programming in C++. It not only helped me learn more but I was also able to dabble and learn the intricacies of programming. My passion to write computer programs blessed me with the much needed exposure to solve real-time problems. When I was studying 11th grade, I designed my first website. I kept enhancing my knowledge in programming through continuous learning. My first breakthrough in freelancing was the development of a matrimony portal in ASP 3.0, alternatively known as “Classic ASP” – a popular web development language then. 

I continued to succeed in my programming endeavors, and I was not only reaping financial rewards, but these successes were fuelling my entrepreneurial dreams. Infosys recruited me as a software engineer at my B.Tech campus interview in 2008. I served Infosys for two years. In pursuit of my entrepreneurial dream, I am now a partner in a scholastic organization in Chandigarh. 

Please define “Assistwindow” in less than 25 words.
“Assistwindow” is an online and internal Q&A platform for knowledge sharing & organizing. “Assistwindow” provides meaningful answers to seeking members, thus increasing organizational productivity.

Why and how did you start your company? Why this domain?
Product development is stimulating; hence I migrated to developing products for schools. I simply love my work. In my present work tenure, I enlightened myself in the usage of B2B (Business to Business) technology tools. My present journey also enlightens me much about business and client servicing from which I continually comprehend the multidimensional facets of user experience and product knowledge. 

My team has grown to a strong and dedicated seven member team over the last two years, and as a result of which my products are being developed successfully. During this journey, knowledge sharing was one of the management concerns that I reckoned could directly impact productivity. Since I derived tremendous value out of Q&A platforms such as “Stackoverflow” and “Quora,” I planned to construct an internal Q&A platform. Consequently, “Assistwindow” came into being.

“Assistwindow” is an online Q&A platform for sharing & organizing knowledge within an organization that provides relevant and meaningful answers to seeking members. Members of staff in an organization can answer questions raised by their counterparts anytime and from anywhere. The knowledge that is continually being built is grouped intelligently, and hence can be retrieved quickly. This results in an enhanced productivity for an organization since staff members avoid disturbing each other to gain answers and clarity.

When we deployed “Assistwindow” internally, we realized its tremendous value for internal knowledge sharing for B2B (Business to Business) organizations. This platform will facilitate greater productivity in an organization, since it empowers the staff to enhance their time management skills. 

What did you choose the name “Assistwindow?”
Those who seek knowledge require ‘assistance,’ and ‘window’ is primarily construed as an entrance of life (light and air). Thus our product derived its name “Assistwindow.” 

What is Assistwindow’s key differentiator?
The two core differentiators of “Assistwindow” are its simplicity and efficiency. It is a terrific value offering for it delivers its promises to increase clientele productivity. 

What is the greatest challenge AssistWindow has faced thus far? How did you overcome that challenge?
Our biggest challenge is to connect with people who need such a product. To overcome this challenge, we invest in social media. We share our experiences and learning through our blog named “Business, Web & More…” 

Our blogs have attracted people’s attention. Our recent blog titled “How Plans Kill Productivity” on “Hacker News” received 5000 unique hits within 5 to 6 hours of its publishing. 

Who are your potential clientele?
Our potential clientele are single or multi-site B2B (Business to Business) organizations with a need for internal knowledge sharing.

Organizations in the manufacturing and services verticals can also deploy “Assistwindow” as a personalized Q&A platform for their clients. The questions clients raise about the product and the answers received from the manufacturer will be grouped and reused as and when required. 

What are your future plans?
Our objective is to expand the reach of “Assistwindow” for it to serve our potential clientele. Moreover, any product of such a genre should be continually fine-tuned to keep abreast with the constant advancements in clientele need and technology.

What has been your moment of glory?
Our moments of glory will always reside in customer satisfaction on account of their enhanced business productivity through “Assistwindow.” 

What have been your personal and professional learnings thus far?
Consistency and patience is my primary learning. Nothing big can happen overnight, and one needs to be consistent with his time utilization for any meaningful achievement. 

I have also learnt not to work ad hoc. I desire planned routines of all the tasks that I like to accomplish. The tasks could relate to work, hobbies or even setting apart time to relax and restore my body. One needs to maintain a mix, for one cannot pursue a single objective always. 

I like to discuss any situation, for I believe courteous discussion will provide clarity to any situation 

Finally, I love writing, since writing helps me to think deep, and deep thoughts are vital to success. 

What support would you like?
The only support that will satisfy me is to expand the reach of “Assistwindow” as a tool to improve the business productivity of many more organizations.