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The article has been contributed by guest author. If you would like to share your opinion/insights/write a guest post, please get in touch [ashish at nextbigwhat.com]

Cloud Technology Is Transforming The Startup Ecosystem

Cloud is transforming industries — helping clients meet business goals faster, engage customers more effectively, and drive higher profits. This is a given fact since technology has such a powerful impact on our lives. However, the trend has seen a significant shift. In today’s context, most start-up companies sprang up because a new technology had come along that would provide solution to a problem that could not be solved previously. Therefore, instead of technology innovation being the only driver for startups, it is more frequently seen as a business model innovation.

Today there has been a change the way enterprises buy information technology – moving from pure IT, cost and efficiency – centric behavior to a more business and solutions centric. For instance, they have come to identify the need to be constantly ‘on’. Disasters happen, devices get misplaced and one may never know when he/she needs to access the important files on the go – cloud storage places all of the data on ones fingertips.

Cloud acts as a Web based external hard drive, a file-sharing platform to collaborate with or a data backup source for disaster recovery, a productivity tool for anytime, anywhere access to ones files from any device. Thereby, making companies be ‘always on’ and deliver new services with 100% availability. It is this nexus between technology and businesses which are now leading the way for innovative and unique business models.

However, what is refreshing is the idea that any business model breakthrough created by one company in a single aspect/area leaves immense room for that same business model innovation to be applied to other areas.

E-commerce space stands out as one such industry which can be identified with this phenomenon. E-commerce companies deal with various industries. While analyzing the prominent companies in this space one trend is constant and that is, their understanding of speed and agility. This is exactly the investment value of this technology which has been identified by the CMOs of the startups – making the process of evaluation and consumption of a number of digital campaigns for a given duration and deploy them rapidly for one or more events without having any concern of any clunky hardware or outdated software. This makes the Marketing departments simply research best functionality and execute. IT is playing the role of the facilitator for the enterprise to consume these solutions and ensure that they are aligned with the enterprise strategies on security, privacy and integration/compatibility with existing IT assets.

Business leaders presently are looking at solutions which can – pull together with an enterprise view to avoid a “spaghetti” approach — and create a model that allows the business to ‘consume as a service’. In other words, the line between enterprise and consumer applications have become blur making the convenience of working and be goal driven the main business objective.

With cloud today, organizations can rapidly deploy development, test or production environments for their solutions using a preferred Platform as a Service (PaaS) or Software Development Environment as a Service (SDEaS). One sector which has benefitted immensely with this second wave of cloud technology has been the industry driven by the entrepreneurs.  

The startups have picked new age technology with complete ease and also have involved IT at the heart of their businesses. This has allowed them to come up with innovative services keeping their products the most cutting edge. It is this purpose to reinvent the infrastructure underlying cloud applications to meet the growing demands for performance and scalability in an increasingly mobile, app-centric world — has begun to level off in terms of new opportunity.

A number of startups who have addressed the cloud scalability challenges for massively scalable web applications have already become market leaders. With this trend in place, India has emerged as the third largest startup hub in the world.  Enterprise startups were put on the center stage in 2014 and continue to be so, much of startup growth last year was shaped by the rise of the on-demand marketplace.

The idea behind some of the most successful startups in India was to make the customer experience for everyday chores more personalized leveraged by mobility. Resulting in the disruption of some of the most traditional industries and tech playing its role in deconstructing them. Hence, cloud technology’s contribution in making them achieve their objectives.

Cloud Business Solutions allows IT providers to respond to any market need with integrated business solutions – from consult through operate and with ease of procurement and consumption– all to support client business priorities with the speed and simplicity of cloud – fully integrated and personalized.

Cloud business solutions bolster the strength of the small and medium businesses and help to scale up their business as well as their industry. Overcoming the logistical, operational and regulatory complexities associated with startup businesses has very little to do with the tech prowess of the founding teams and much more to do with getting the details of the business model which with the right IT architecture can have a substantial potential in deliverance.

[Guest article by  Suvojit Mazumdar, Vice President and Global Solution Design & Delivery Leader Cloud Business Solutions IBM Global Business Services]

 

How We Built A Profitable SaaS Business For India

[Editorial notes : A very insightful piece by Lalit Bhise, founder of Bizom on selling SAAS to Indian SMEs and lessons learned.]

In this post, I am going to be extremely open about our business during our journey to become revenue positive in 3 years.

Objective is 2 fold

  1. I would like to bust the myth that SaaS products focussed on India Market do not work
  2. I hope this helps other entrepreneurs who are just starting on their cloud SaaS journey.

Summary / Intro

Bizom is “mobile first” commerce, collaboration and acceleration platform for FMCG sales teams and channels.We have proven record of increasing productivity by at least 70% for our customers. We are seed funded by Ojas Ventures. Following are some of the statistics about Bizom

Chart

Background (Why and What)

While brainstorming on Bizom in late 2011, early 2012 following were some of the guidelines we followed

  1. Being in India, we wanted to build something which made difference in average Indian’s life.
  2. We wanted to build a profitable company and we saw more value in enterprises in India.
  3. The product had to be “Mobile First” cause we strongly believed that India is the “Mobile First” country

The idea of Bizom was conceived by our advisor friend Ashwani Garg. We refined it further by meeting more than 100 potential customers. At the end of it, we realized that Indian and emerging market enterprises were looking at business process/workflow automation solution rather than another ERP and CRM.

They were looking at solutions which fit their needs and were ready to go live immediately rather than technologies which took months / years to implement! Bizom does exactly that.

Following are some of the things we realized customers love about Bizom

  1. “Paanchvi Paas” compatible Mobile application which can be used by anyone
  2. Feature completeness and configurability which allows us to go live in 2 days to 2 weeks flat!
  3. Apart from data analytics and dashboards, Bizom provides proactive Alerts!
  4. Apart from customer support, Bizom team provides proactive evangelization to end users
  5. The DNA of innovation which allows us to deliver applications such as gamification and 35hawk!

Enough about us, let’s get back to the story.

In 2012, all VCs told us to focus outside India especially for a Cloud SaaS business. We still followed our heart and built a profitable SaaS business for Indian market.

Disclaimer: Following are some of the things that worked for us, and some other things which did not work but it’s extremely subjective topic.

Phase I (Build)

Sell the PPT first

We made this call in early days. We had an experienced kickass dev team but we believed we lacked in business acumen. So we decided to test the waters first by sellng even before building. We made the product pitch for customers, created an MVP (minimum viable product or a prototype) and started selling. We did not take up building the main product till we had the lead ‘paying’ customer ! We acquired our first paid customer in August 2012 and 5 more in a short duration to be our lead customers for Bizom !

Product of love !

The product initially was built by a small team of 3 people. 1 for mobile, 1 for backend and 1 for testing. I wrote the first backend code (that explains the amount of rework we had to do at later stages ..:-) ). But all 3 of us were possessed to build something that could scale. Our focus on building something extremely easy to use yet scaleable and easily customizable came from those days. I think it matters a lot if a product manager can actually code a tech product himself in early days. It ensures that even when it scales, the base rules prevail.

We made sure everyone in the team visited customer operations in the field. Be it a coder, designer, tester or support executive.That explained the reason why most of us talk about field users and their problems before talking about top management concerns. We prescribe this “bottom up” way of automation to all our customers.

Another thing about Bizom is that we truly love our customers (it’s a cliche, I know). They gave us abundant feedback and we focussed on integrating that in the product quickly. This love was reciprocated by our customers who gave us great references and helped reduce our cost of sales!

Phase II (Consolidate)

Go small and deep rather than wide and shallow  

We raised seed money from Ojas in early 2013. During that time, we met a lot of investors. One of whom (Madhukar Sinha from Indian Quotient) suggested a go to market strategy which made a lot of sense. He suggested that we must take a micro segment of the market and acquire significant market share there rather than try and reach everywhere in the market and spread ourselves too thin in the process.

For the first year from launch we only focussed on the 5 lead customers and made Bizom into a feature complete yet easily configurable product. We also decided to initially focus on a small market segment of our total addressable market, we went after FMCG companies headquartered in Mumbai and Bangalore with turnover between 50 and 500 crore.This kind of focus helped us a lot in closing deals quickly. We quickly went from 5 to 50 customers by mid 2014.

Sell the demo

In this phase we sold the product / demo a lot. Since we did not have enough case studies, all we focussed on was how the product was differentiated. The selling involved deep functional knowledge of the product and passion for the product itself. It explains why our channel strategy did not work in this phase.

One of the great customer wins during this phase was Parle Agro, largest Indian beverages company. They showed great faith in the product demo and the passion of the team.

This win apart from giving us a great large customer, allowed us to understand the vertical, pain points and deployment complexities much much in detail.

What did not work

All our business plans always talked about focussing on channels. We looked at Tally, Salesforce and felt that only channel focussed approach works. What we realized in market was that without critical mass of 100+ customers, channels do not work / scale. Also building and maintaining channels needs investment both in cash and in time which a small seed funded startup can not afford most of the times. Today, our channel strategy works much better and faster since we are able to invest in channels.

Selling overseas. I feel we tried selling overseas prematurely in mid 2013. Apart from eating up some significant bandwidth of the team it gave us one great learning “grass is always greener on other side”. Now we realize that without physical presence or an exceptionally motivated channel, looking overseas is waste of time.

Phase III (Scale)

Sell the PPT again

Now that we have many many case studies, our sales focusses on value Bizom creates for existing customers. We educate the customers on how everyone in the industry is using Bizom. When someone requests a demo, we readily take them to see one of our existing customer implementations in market which apart from addressing their curiosity acts as a huge testimonial for the product !!

Focus on recurring revenue

For a SaaS company, recurring revenue is key hygiene factor. Towards end of 2014, we started focussing on being revenue positive and succeeded quickly thanks to our large customer base and untiring customer success management team. We turned revenue positive in Jan 2015 !! This also meant focussing on account management more than sales. We are proud to say that we have a much larger team of “farmers” compared to “hunters”.

Innovate, Pivot again and again

Bizom is now not just an automation or commerce platform for our customers, it has also become default communication platform for the sales teams and channels.We are leveraging the fact to bring in more social collaboration features in Bizom. We are also leveraging on the ecosystem of more than 1 million retailers we have built so far. Which means constantly tinkering with the product and positioning.

Now that we are revenue positive, focus is moving to break this orbit and reach 1 cr+ monthly recurring revenue. We are trying many exciting things on product, channels and markets. I will be back with you next year on how it all worked out .

If you are facing dilemma in focussing on Indian market or need any help with building customer base for your SaaS product, please feel free to reach out to me on lalit at mobisy dot com.

 [Notes from NextBigWhat : We invite insights from founders and productgeeks. Do connect with us (editorial@nextbigwhat.com) to share your insights with the audience]

Of Drishyam And When Data Analytics Meets Bollywood [Social Media Case Study]

Having worked on social applications for some Bollywood movies in the past and coming from an IT+Marketing background, I always wondered if I can marry geeky data analysis and b-town entertainment together.

Drishyam

So I choose a recent bollywood creation Ajay Devgn and Tabu starrer “Drishyam” and got into my new side project, which could keep me awake at night and got me thinking while I am traveling.

Data source and Volume

Having worked on various social APIs since a long time I decided to collect social data across the movie, so I immediately headed to twitter and used its streaming API to collect all the tweets around the keyword ‘Drishyam’. I started the automated process of tweet collection on 24th July Night and stopped collecting the tweets on 6th August, which symmetrically covers the post and pre release period of the movie. [I have used only one platform(twitter) and one Keyword (Drishyam) to collect data to keep the process simple and less data intensive](Data like this is publicly available to everyone through twitter API)

When I started the data processing work I had a whooping number of tweets waiting for me.

Total Number of tweets from 9 PM 24th July to 1 PM 5th August : 2,67,102.

Total Number of unique user accounts who tweeted : 18,764.

Available data set was tweet text, time of tweet and user-handles from which the tweets were posted, following is the story of how I used this simple data to produce vital analytics about the movie on twitter.

Date wise distribution of the buzz

To calculate the trend of buzz, I decided to plot the number of tweets posted against the date. After applying some simple string manipulation functions on the time-stamp string I had the following plot.

Chart 1

Data is from 9pm 24th July to 2 PM 5th August

Clearly we can see that there are three major peaks in the graph, one is 26-July, 29-July and 31st July when the conversations around the movie were at top. The reasons being on 26th July is that Ajay Devgn shared stage with Kapil Sharma for movie promotion on Highest TRP comedy show of India, Comedy Nights with Kapil.

The second peak corresponds to 29th July when several contests were held to promote movie (we will see more on this in top-conversations section, coming below), the third peak corresponds to the release date when various movie critics released there reviews (More on this in top contributors section).

Inference : Promoting a movie on a popular TV show does help a movie in creating buzz and contests are sure shot ways to generate user interest and buzz.

Time wise distribution of tweets

To know at what time of day the conversations around the movie were at peak, I decided to draw a radar graph of time vs no. of tweets

Chart 2

Here we can see that conversations are at their peak at night between 7 PM to 10 PM, and thats also the time when most people are active on twitter. Secondly the conversations slower down from 10 PM and reach their minimum at 4 AM after which it starts growing till 10 PM, their is an increase in conversation between 2 PM and 3 PM which is lunch time in organizations and colleges and people move again to social networks hence creating buzz around what they like.

Inference: Its easy to build trends during late night and early morning but the reach of trends is minimum. Best time to tweet is during lunch time [1 PM to 3 PM] and Late evening when people come back from work [7 PM to 10 PM].

Top Conversations

To get a sense of popular topics around the movie buzz, I decomposed every tweet into its constituent words, which gave me a total of 50,00,000+ mentions of 75000+ unique words [> 2 character in length]. I calculated the frequency of each word and plotted top 10 and 20 meaningful words in the conversation, all time as well as date wise respectively.

Top 10 all time popular conversation topics

Chart 3

As apparent as it is, Ajay Devgn is the center of attention in conversations, followed by Comedy Nights with Kapil, Tabu and others, the movie grabbed initial attention and buzz mostly because of its star cast and promotion on small screen.

Important and popular conversation topics on 25th July

Chart 4

Important and popular conversation topics on 26th July

Apart from CNWC [comedy nights with kapil] with 35000+ mentions, we have following other popular conversation topics on 26th July

Chart 5

Important and popular conversation topics on 27th July

Apart from ‘4 days to Drishyam’ with 7800+ mentions, we have following other popular conversation topics on 27th July

Chart 6

Important and popular conversation topics on 28th July

Chart 7

Important and popular conversation topics on 29th July

Chart 8

Important and popular conversation topics on 30th July

Chart 9

Important and popular conversation topics on 31st July

Chart 10

Important and popular conversation topics on 1st August

Chart 11

Important and popular conversation topics on 2nd August

Chart 12

Important and popular conversation topics on 3rd August

Chart 13

Important and popular conversation topics on 4th August

Chart 14

Important and popular conversation topics on 5th August

Chart 15

You need FANs, Die hard Fans

To drive such massive conversation any campaign or brand needs cult FAN following, Ajay devgn is a Mega Star versatile actor with a huge crew of fans around. In this post i have categorized FANs as users who have posted more than 100! tweets about Drishyam

Total Number of twitter FANS : 460

Trivia : 60% of all the tweets were posted by these 460 users!

Top 30 Fan accounts

Here is a plot of top 30 fans, user handles for users v/s number of tweets posted

Chart 16

Influencers : The most critical agents

While fans can generate a lot of content and buzz about the movie, they generally have a limited followers list. Influencers on the other hand are people with a large number of followers and even one tweet from them can help amplify the buzz many folds. I have categorized influencers as account with a follower count of 5000+.

Total influencers who tweeted about drishyam : 236

Total Reach (not necessarily unique) : 2,50,00,000 users

Popular 30 Influencers

[User Handle | No. of tweets | Followers]

1

These account are worth more than gold for spreading a buzz on twitter, Next time when you make something awesome don’t forget reaching out these online celebs to tweet about you. Other remarkable influencers like Arvind Kejriwal, Amit Shah etc. got the Drishyam buzz into print media as well.

The media is moving to multiple screens, small screen supports in building the buzz for movies and vice versa, and the forever accompanying screen of our smart phones make the conversations two way.

The movie doing great as seen from the positive popular words after the release, the current rating is 9.1 on IMDB!

[About the author : Guest article by Ankit Shukla. Ankit lives in Mumbai. His coordinates are Facebook/ Linkedin]

Practical Advice On Selling Your Startup

[Editorial notes: Pushkar Gaikwad sold his startup earlier and shares practical insights with the founders, who are in the process of selling your startup (or have plans to).]

I had started InBoundio in Jan 2013. After doing lot of freelancing, services and building casual hobby products, this was my first serious attempt in building a web product and business. This also made me took a dive into core technology as earlier I only had surface knowledge of technology. It did well and got reasonable success. We did plenty of iterations with product feature and pricing and we did got good number of inquiries about white label marketing software.Startup Advise

Since I am building AeroLeads too, it was difficult to focus on 2 products hence after 6 months of talks with many businesses, I have sold my startup InBoundio to an Australian Media company c9.

The last 2 years were fun in terms of learning and experience and now I have both as well as some cash, so now I will be using all this to grow current product much faster.

Learning and Experience

1. It was little tiring since I did all the work of talking and communicating with people. Though it was rewarding too since now I understand complete business cycle as well as understand complete technology and marketing stack of a business. I was also able to understand what are the metrics which a buyer look for. Saying this, I am very sure I am done selling businesses for a long time since it don’t excite me. Building businesses to sell it is also not a good business model.

2. It is not easy to sell your startup sitting in India to someone in other countries. Trust is a major problem as no one know each other. This also means you will only appeal to buyers who are looking to buy in certain price range to minimize risk for them.

3. I have seen many Indian businesses who go under the radar getting sold in 1M USD range through business brokers. If you think you can sell your business in this range, you should look to engage with brokers who have the right network. Do note that you will get valuation in multipliers of 2x-5x range which is the industry standard for web businesses. It can be 10x if the buyer sees real growth potential but don’t expect 20x or such valuation which rarely happens. Being realistic is important.

4. You can get much higher valuation if you are willing to work with the new buyer for few years, do partnerships or take some money now and rest later. At the end of the day, everyone wants to mitigate risk.

I had few such proposals but for me, it wasn’t about money, I knew it could get messy as it is not easy to partner someone in different country so went with outright sale.

5. The whole process is time consuming and can take 3-6 months. Make sure you don’t rush and covers legal aspect of transferring ownership and assets.

6. Prospective buyers will always look for these 3 parameters. If your startup have them, you should be fine, if not, you will find it difficult to make the calls.

i. Growth Potential
ii. Minimum liability
iii. Existing revenue

Where to find buyers for your Startups and Businesses

1. LinkedIn – I contacted lot of businesses founders on linkedIn using inmail and got good response. Few of them showed interest but it was also the issue of “not having enough paying customers”. If you want businesses in similar vertical to acquire you, remember that most of them only look for paying customers and not for technology.

2. Business Brokers – There are plenty of business brokers and firms who help you selling businesses in 500k to 10M range. They take about 10-15% fees and for someone in India, if you think you have the above 3 (growth, minimum liability and revenue), you should talk to them as this reduces risk, cut down your time/effort and speeds up communication.

Feel free to message me If you need some advice or if you think I can help you. I can be reached at “pushkar.gaikwad at gmail dot com” or through linkedIn.

Founder Vs. CEO Role : A Unique Disposition

A CEO and a FOUNDER are usually thought to be the same person.

They’re not.

Founders are brash, confident (bordering on arrogance), irrational, delusional, hungry, scrappy, penny pinchers, micro-managers, and all round cockroaches.

Survival is the essence of a founder.

Bootstrap an idea – find early customers, find ways to please them without running out of money, use your savings, plough back your profits, convince people of your vision, make them dream of being awesome. Because money sure as hell isn’t a motivator for them at this point.

Get some initial funding / traction – get cashflow positive / convince a few investors / join an accelerator / Still scrappy as hell / share a bedroom, sublet the other bedroom, Airbnb the hell out of your pad, travel coach / excursion, win more clients, angle for a high profile Angel / land a kick ass senior hire.

But then, you close your seed round. Now you’re 10–15 people. People who don’t necessarily feel its their lifelong duty to make this startup the center of their lives. Whose wives won’t understand when you’re at the office at 2 in the afternoon on a bright sunny Sunday when everyone’s at the Food Truck Festival.

You’re no longer a startup. You make money, you please customers. You have a team. YOU’RE A BUSINESS.

And you cannot be a scrappy, hungry, aggressive, take-no-prisoners founder any more.

You’re a CEO now.

You have to project stability (We’ve got money in the bank, we’ve got more rolling in, we can pay you every month, we do NOT expect you to work like a mad woman till 9 in the night / every weekend.) You will have founder-level commitment from a few of your team members. They are the hungry ones. Nurture them, Keep them happy. Solve their problems. They’re the future of your leadership. They inject energy in the business, piss more traditional team members off, break shit, and upturn systems. You need them.

But a business runs on systems, process, culture and accountability.

One of the biggest reasons startups struggle to scale is because their “CEO”’s mindset refuses to scale with the business.

Most startups nail the vision, nail the culture (You could NOT have found investors, customers, and early team members otherwise)

But they fail to build out the Structure to function under stress.

They fail to account for process, human tendencies and react badly to structural shifts in business thought.

This is where you have to start being a CEO. A Statesman. A Leader.

Building off the Determination, Passion and Drive brought from a founder’s mindset,

Thoughtfulness is the essence of a CEO.

You cannot fire someone because they didn’t like you. or because they were rude to you. or because they’re an asshole.

You must have strong, valid, objective reasons for moving someone out of your team. You must find out this information fast and act fast on it. But you must be slow to jump to conclusions.

When you resolve an ego conflict, you cannot take sides. No matter how much you like one over the other. No matter that the aggrieved party isn’t a high performer. You must be fair and honest to the facts. Not to the people.

You must be a scary judge of talent. But you must also be able to take feedback. About the team from each other, About you from them.

You cannot favor your early employees if they cannot scale. You need to be brutally honest with your co-founders if they are failing. You have to look forward 18 months and act as if you’re already there. You CANNOT solve every problem your team has. You MUST allow your team to face their own crises.

(caveat: If its a deal or a issue that affects your company’s future, Jump right in!! No niceties there!)

Your goal as a founder is to live forever through your vision.

Your goal as a CEO is to make the company function perfectly if you died tomorrow

[Guest article by Pranay Srinivasan, founder of SourceEasy.

Image credit: shutterstock]

Startup Hiring : Two Mistakes Founders Often Make

Recruitment is tough and all founders realize this in due time. A funded / not so funded / not funded startup has its own set of hiring challenges. Every founder know how difficult it is to assemble and retain right people especially in early days. In the early days, founders use their repetitive hiring experience and intuition to make an initial team, but many founders with no hiring experience are prone to make these two common mistakes:

1. Hiring a False Positive

False positives are those people who fit your selection criteria perfectly. Their overall personality/ communication/ behaviour is such that they come across as an ideal candidate. There could be the case that these guys have mastered the art of giving interview or they have researched about you well and behave as you desire.hiring

These guys may appear good but are not as good when it comes to execution or getting their hands dirty. Needless to say – hiring these candidates is a big mistake. It is very important for founders to develop a knack of identifying false positives. As an interviewer/ recruiter/ selector, you should just not ask a set of questions and go as per the words/ answers but you should try to read between lines, go beyond words, try to find out the actual attitude of a person. His track record can also come handy as there should not be any mystery around it.

Doing a trial period of 7-10 days for all the key positions is also a great to avoid a wrong hire, and I have seen this practically working with startups.

Trial period gives enough time to both the parties to know about each other and take an informed decision. So, in nutshell. you should avoid hiring a false positive person and if hired you should part ways as soon as identified.

2. Rejecting a False Negative.

As name suggests, it is opposite of false positive. The person who initially doesn’t seem to fit the bill but is actually a good prospect when it comes to execution, learning new things.

He/ She can become an excellent leader or team member in the future. He may not tell you things which you want to listen or behave as you would expect an ideal candidate to. This doesn’t mean that he is not good and lacks the basic know how but it could be the case that he didn’t get the required exposure.

In order to gain competitive advantage you don’t have to do bigger things but small things differently. Hiring a false negative person is one of them. The big question is how to identify these guys.

The answer is “Intuition”. You can’t explain the selection of these people with logic. Again trial or live in period comes handy. At any cost, you should not allow these people to leave as they are the potential game changers.

The above mentioned points are in the context of hiring but I think you have also realised that this is applicable to every case when we are choosing people, be it personal or professional purposes.

What are your thoughts?

[Nikhilesh founded startup named cvbhejo before his current venture StagePhod.com. He is also helping The Morpheus portfolio companies with hiring startup candidates.]

Image credit: shutterstock.com

Will E-commerce Industry in India Sustain? An Alternate Perspective

Off late, the Indian e-commerce industry has been one of the most trending topics of discussions. And it has all reasons to be! The nation has never before seen such levels of euphoria. Thousands of young, bold entrepreneurs are quitting their plush jobs or giving up their hard earned premier school seats to get on board the “e-commerce startup” bandwagon in pursuit of instant stardom or with a dream to change the world! High profile investors from around the world are placing their bets on theses 20’s youngsters. A bird’s eye view on Indian tech startup funding scenario today.

indan-ecommerce-funding

While this picture looks really rosy on the face of it, is it really that hunky-dory out there?

  • Can these e-commerce firms really scale as per the projections?
  • Can they really turn profitable in the long run?
  • Can they really keep delivering exceptional services as they scale up?

Perhaps the million dollar question that we need to ask at this moment is – “Can these businesses sustain in the long run?”

If many analysts are to be believed, the answer is a shocking “No”. While most analysts cite reasons such as – unable to find investors at right time, cash on delivery rejections, inefficient delivery logistics as the prime reasons of the impending doom, there is yet another reason that is grossly overlooked. The big problem: In a hurry to ensure “Me First” in the rat race and hence to achieve an uber-quick Go-To-Market, these e-commerce startups tend to ignore the biggest beast of all – backend processes & systems. To Scale it is imperative to have strong, efficient and dynamic backend processes, systems and best practices.

I recently had an opportunity to interact with one of the first movers in the mainstream e-commerce space and amongst the best known brands in the country that is struggling today. What startled me was – such a brand is using a primitive system at the backend that gives no controls or visibility into its operations, forget best-in-breed processes; no wonder the business is facing an operational nightmare. Even worse – it’s now exceedingly difficult for the business to switch to a proper system that helps it convert the backend operations, its weakness into a strength, since the system has grown into a giant elephant sitting within the office premises. This can be compared to a space mission that is in a hurry to reach the moon. With all the excitement revolving a quick launch, the mission misses out on few critical aspects – how to land on the moon and how to get back from there. So, once the spacecraft has launched, it has nowhere to go and has no option but to die in the hollow space.

A major reason for today’s rush in the e-commerce sector is the ease with which one can launch a business. It took just 3 months and a handful of undergrads to launch the first version of Housing.com – the posterchild of India’s Grand E-commerce Story. Compare this to an engineering R&D firm which would have taken 3-4 years of hard work, deep technical knowhow and huge investments before it could be launched. Typically, e-commerce entrepreneurs are the marketing or technology geeks eyeing the benefits of instant Go-to-Market and has limited operations knowhow. Today, all one really needs is a convincing business model, a beautiful website & mobile app, an online billing tool and a payment gateway integration.

It’s really easy to launch an e-commerce portal – it is easy to develop, tap the social media and acquire the first customer. Well, that is the easy part, the difficult part only comes later – systems to monitor and manage employees, tasks, projects, building a seamless supply chain, accurate financials and accounting practice, and powerful backend operations to deliver cost efficiencies.

You see, in e-commerce, clocking good top line revenue is not a major hurdle. Even easier is to achieve the recently popular benchmark – GMV or “Gross Merchandise Volume”. But when it comes to profitability – a key to sustainability, ensuring a healthy bottom line is a BIG problem for these e-commerce firms. Only through work management systems, powerful & integrated supply chain, smooth logistics and streamlined backend processes can this be achieved.

Take a look at the Indian airlines industry – an industry that has been marred with stories of failures, bankruptcies and unceremonious exits. Ever wondered why IndiGo Airlines, the SouthWest Airlines, stans so tall and bright in the airlines industry rubble? The only airline that is profitable in India and at same time rated highest in all customer satisfaction ratings, IndiGo has focused on things that others haven’t. They ensured that backend operations – the weakness of other airlines, become their biggest strength. With more focus on delivering customer satisfaction & streamlining operations than clocking high revenues, doing operational innovations and staying focused on a particular market, IndiGo Airlines achieved unimaginable turnaround time, achieved operational excellence that others couldn’t think of, and built trust & loyalty amongst its fliers. Rest is history!

amazon-backend-tech

E-commerce startups need to learn from this – streamline your operations and be forward looking. Think like IndiGo or Southwest, not like the space mission that compromised its future in a hurry to launch.

The good news is – today, a handful of the e-commerce firms have begun to think in this direction. Flipkart has started to change its stance. To ensure that it sustains itself, Flipkart has announced that it aims to become profitable in the next 2 years. The organization is taking a series of measures to get its operations right. It is even considering robotics as an option.

The message is simple, if the Indian e-commerce industry wishes to survive, the businesses need to focus on operational excellence and delivering customer delight, not just on GMV. Common perception in the e-commerce industry is that first one should reach a scale and then get the right systems, processes and industry best practices.

However, what the e-commerce firms should actually do is get their backend systems and processes right when they are building their team so that they derive operational efficiencies at early stages and are able to withstand when the scale hits them. The point is, it is not impossible to get the backend operations streamlined early. By ignoring the backend operations, one unnecessarily invites the risks of perishing even before hitting the right scale. Also, by not streamlining backend processes at an early stage, businesses actually magnify the cost of switching to the right processes & systems at a later stage by a zillion times.

The age old “customer satisfaction” has now been replaced by “customer delight” as many can now satisfy a customer but only a few can truly delight. New age service industry is all about delivering “Customer Delight” which can only be delivered if we always exceed our customer expectation.

“Folks : keep the customer at the centre of everything you do”

[About the author: Vikram Dham is the cofounder & CEO of Emkor]

Enterprise Software Startups In India : Big Clients, Big Opportunity

Over the past few years, there has been a lot of investment activity in the B2B Technology product space. One can broadly classify B2B Tech into two categories based on the size of the end clients, and the delivery model (on-premise or Cloud).

001

Most of the recent investment activity in the B2B Tech space has primarily been in “SaaS”. This is because SaaS products are relatively easier to scale globally as against Enterprise Software products. Some of the drivers for this are as follows:

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That being said, we see a huge opportunity for Indian Enterprise Software product companies. The “edge” such companies have over typical SaaS companies are as follows:

  • Only a handful of global players are fighting it out for the larger clients. For example, in case of Enterprise CRM, the primary competition is from Oracle Siebel, Microsoft Dynamics, Salesforce (for large enterprises that are comfortable with SaaS), and SAP. In case of Contact Center Software, it is from Avaya, Cisco, Aspect & Genesys. In contrast, for most SaaS products, the vendor market is quite cluttered since the barriers to entry (and exit) are much lesser for SaaS products.
  • Incumbents in Enterprise Software are large (and relatively slow moving) firms with “legacy” products. Large enterprises have seen lesser innovation as compared to SMEs – immense opportunity to be nimble-footed and have a more contemporary product platform for the younger product companies in this space.
  • Enterprise Software platforms are typically more comprehensive and feature-rich, whereas SaaS offerings are relatively more of “point” solutions.
  • As a result, an Enterprise Software vendor has greater opportunities to expand and penetrate into adjacent add-on offerings, with great ease.
  • Higher customer stability – typically much lesser churn, since the integrations and customizations are an ‘investment’ and provide stickiness to the vendor.
  • India is a great place to start. Getting large Indian enterprises as customers and then expanding overseas (to other developing regions like South East Asia, Middle East and Africa) is a trend we keep seeing.
  • While in developed markets, even large enterprises have adopted the Cloud infrastructure and software as integral to their businesses; in India the mid-to-large enterprises are still in the early-cycle of Cloud adoption.

So if you are an Enterprise Software company, and are looking to raise funding, what are some key aspects from a VC fund raising perspective? Here are a few that we at Zanskar Advisors have learnt from our past engagements:

  • Revenue Scale already achieved: The bars seem to be higher for Enterprise Software companies as compared to SaaS. For e.g. an Enterprise Software firm would need to have approximately $ 5 mm of revenue to attract similar amount of funding (for similar dilution) as a SaaS product firm can attract with say $ 2 mm (that too on an annualized run-rate basis).
  • Established Partnerships (especially for overseas customer acquisition / servicing): As the “expansion” would be primarily coming from overseas, some instances of selling to overseas customers (preferably through channel partners – as direct sales are less scalable) will help.
  • Instances of displacing established incumbents (large product companies) at key accounts (for reasons other than just the cost).
  • Revenue Trends
    • % of Product Revenue (License + AMC) as against Services revenue (upward trend is favorable)
    • % Revenue from top x (say 5) clients (downward trend is favorable)
    • % Revenue through Partners (upward trend is favorable)
    • Average Revenue per Customer (an indicator of “upselling” – could be in terms of no. of users or no. of modules – upward trend is favorable)
  • Global Recognition (from the likes of Gartner, Forrester etc.) is a plus

We strongly believe that a new wave of Enterprise Software product companies from India is going to take on the world – in line with the thesis of “Make in India” (and sell globally).

[About the author: Mandar Kulkarni works at Zanskar Advisors – a boutique investment bank based out of Mumbai.]

Mobile Wallets Demystified : Eligibility, Permissions And Everything Else

Mobile wallets are making headlines these days. Domestic e-commerce companies, such as Flipkart, plan to launch a wallet soon, while a few payment gateways, such as Paytm and Mobikwik, offer semi-closed wallets already. Telecom operators also offer this facility. Internationally, too, Apple Inc. is said to be introducing an iPhone wallet on 9 September, which will have tie-ups with Visa Inc., MasterCard Inc. and American Express Co.

According to many experts, mobile wallets are going to be the next wave of change in the way people make payments.

Simply put, it is a virtual money wallet that can be used to make instant payments, same as with a physical wallet. It is an application stored in cellphones, which enables users to make payments for utility bills, book tickets, transfer money and other such transactions. It can also be used to make instant e-payments while shopping, in physical stores or at e-stores.

Three types of mobile wallets:

Types of Mobile Wallets

Eligibility:

Only bank are allowed to issue all kinds of wallets including open wallet. NBFC’s and other persons can issue only closed and semi closed wallets.

Permission from RBI:

Entities issuing closed prepaid payment systems are not required to take the authorization from RBI, they just need to inform the RBI.

Entities issuing semi closed and open prepaid payment systems are required to take the authorization from RBI.

Law governing mobile wallets:

The Payments and Settlement Systems Act, 2007 is the primary law governing payments systems in India, with the RBI as the body to supervise related matters. Section 18 of the Act empowers the RBI to make such regulations as may be required, from time to time, to regulate payments systems in India. In exercise of the same, the RBI has laid down guidelines for the issuance and operation of Pre-paid Payment Instruments. A Master Circular consolidating all regulations on the same was notified on July1, 2014.

Other Requirements:

A company (that which is not a bank or a NBFC) seeking RBI’s authorization should have a minimum paid-up capital of INR 5 crores and a minimum positive networth of INR 1 crore at all times.

The Circular specifies anti-fraud mechanisms/standards and the level of Customer Due Diligence required based on the quantum of transactions involved. KYC norms and Anti Money Laundering norms, as relevant would continue to apply to pre-paid instruments. Importantly, these regulations do not cover any cross border transaction and do not extend to any foreign exchange pre-paid instruments allowed by RBI under FEMA.


Submitted by Rohit Lohade co-founder at www.businesssetup.in, a leading portal for startups for incorporations, registrations, tax filings, agreements etc.

Advertising Playbook for Snapdeal and Flipkart [A Perspective]

Disclaimer: I am in no way associated with either Snapdeal or Flipkart.

I could not help but watch the moves by Snapdeal & Flipkart in the Indian advertising space.  With acquisitions and more investments promised, it looks like both these eCommerce contenders are poised to follow Alibaba in building out a massive advertising revenue Alibaba is poised to make $4.75 billion in advertising dollars in China, surpassing Baidu (source ).Flipkart-Snapdeal logos

What’s at stake?

Google recently crossed $1B in annual revenues in India. That’s not all, the pie is about to get a lot larger in the coming years.

Why are these platforms setting up advertising offerings?

I assume that the initial goals for these platforms are to help their sellers succeed. The long term goals are of course to take a chunk of the advertising pie.

Given that I know a thing or two about advertising, I thought I’d put together a brief playbook for them to look at before they start firing on all cylinders.

So here is my list of suggestions  / advice on what should be a part of their strategy.

Data about their users is more valuable than data on Google & Facebook.

Users searching for data on eCommerce sites means only one thing. They’re interested in buying the product. This intent data, combined with recency information as well as other behavioral information is the goldmine that the eCommerce retailers are sitting on.  This information needs to be structured as a first party Data Management Platform (DMP) which advertisers can use to select and advertise their products on. In my opinion, the DMP is the most important part of an advertising offering that anyone has to offer.

Identify users across multiple devices and build user profiles: There are two approaches towards identifying users across multiple devices.  One a shared login approach (used by Facebook) and the other is a statistical inference method.   I think it is important to identify users using both method and to help market products across multiple devices.

The other important thing is to profile the users.  The, who, is interested in what conundrum is solved by building user profiles.

Build out a self-service advertising platform

Both Snapdeal and Flipkart will have to quickly build out an advertising platform that is self service and one that that leverages the first party Data (about users, their preference in type of goods etc).

A self-service platform will helps advertisers get started without having to be hand helpd and helps the business scale.

Focus on Mobile & Video

I don’t think I need to reemphasize the obvious with mobile focus. Advertisements on mobile should lead to deep links within apps, offer quick checkouts etc.

The other important thing to deliver is Video ads both on desktop as well as mobile. Video is a higher engagement ad unit that drives impressive results and there is no reason why platforms should not adopt video. This should be an important part in the execution towards advertising dominance for both Snapdeal and Flipkart.

Set up support / service teams – It is no secret that top of funnel advertising is cumbersome to execute, manage and only certain channels / kinds of advertising works well. It is for this very reason that even Google maintains massive teams to help customers succeed on adwords. It makes perfect sense for both such teams to be setup that focus on customer success

Publisher Ecosystem

It is important for anyone who wants to dominate advertising in India to help the publishers make more money. Why? Simply because the publishers are the worst affected bunch in the advertising system.

Consider this: When was the last time you’ve heard of a runaway media success from India? A service such as  buzzfeed, Youtube or a platform dependent on digital ad revenue. I have heard of none. Most of the up and coming media companies or artists are sub platforms within Youtube, where they are at the mercy of Google and their absurd terms.

Build a captive publisher base

While all of the exchanges offer ample inventory in India, it is not an open secret that these exchanges can account for a large amount of margin pilferage.  Once the ad platforms and technologies are mature enough, it makes sense to tie up directly with publishers for inventory. This would not only reduce costs, but improve the quality of data collected.

Open newer monetization methods – Advertising does not sustain most publishers focused on content and to boost this, Affiliate advertising, search bars within other sites, monetizing their data as a service etc are interesting models that can be offered to publishers to boost their monetization as well as giving access to their invaluable data.

Offer Backend as a service, Analytics and other tools. It is important that there be a publisher ecosystem that comes to depend on either of these players and the best way to do that is to focus on the developer tools. Backend as a service, analytics and other tools could be long term approaches to sign up more publishers and to help get more data.  This is no different than what Google / FB does today.

Qualifying features – advertising platforms these days need a slew of features to succeed – data driven optimization, machine learning, look alike modeling, retargeting and various other standard features that are come to be expected from a modern advertising platform.

It might be important to look in the direction of Facebook and its Dynamic Product Ads (https://developers.facebook.com/docs/marketing-api/dynamic-product-ads/v2.3) to understand what kind of ad products work best for eCommerce players.

There needs to be the right mix of features behind the scenes to help their sellers succeed.

The Masterstroke would be to move from their own seller only ecosystem to an external advertiser ecosystem that can help marketers from the outside to leverage the wealth of data within these platforms, to promote their products. What this would mean is in the future, a smaller ecommerce player would be able to place an ad on a Snapdeal / Flipkart ad platform and attract buyers into his own online store.

Closing Thoughts:

I think both these platforms have a daunting challenge ahead and years of work to succeed. But in my opinion, if both or either of them play their cards right, they can easily out maneuver Google and Facebook to be the number one advertising platform in the country.

It is encouraging to read in the news that ecommerce players are willing to acquire / invest and scouting even silicon valley for talent. Just a word of caution there that they must be willing to pay the (right) price for talent especially if they’re looking to attract talent from the valley back into the country.

I posted a similar blog with a slightly different perspective here.

[Asif Ali is the Founder and CEO of Reduce Data , a programmatic advertising platform based in the valley and in Chennai, India. For more information visit  the author’s linkedin profile at https://www.linkedin.com/in/asifalis]

Explained : How To Use ElasticSearch Alongside MongoDB

More and more organizations are using ElasticSearch alongside MongoDB. To understand how the two can work together, it is important that you first understand what they are as well as their features.mongodb

MongoDB and its Features

MongoDB is a popular document-oriented database from MongoDBinc. (formally 10gen). The cross-platform DB is a NoSQL database written in JavaScript, C, and C++. This is an open-source software, meaning it is available free of charge.

  1. It falls in the classification as a NoSQL database because it uses BSON (JSON-like documents that feature dynamic schema) instead of rational, table-based structures common in traditional relational database management systems (RDBMSs). BSON makes integration of data in some applications faster and easier.
  1. The term ‘document-oriented’, in this context, means MongoDB is able to break a business subject into different relational structures and to then store them in the fewest possible documents. As an example, a single document with the name ‘Book’ can be used to store title, author, and other relevant information instead of having several distinct relational structures.
  1. MongoDB supports ad hoc queries, meaning you are able to search by regular expressions, range queries, and field. These queries return specific fields and include JavaScript functions defined by the user.
  1. You can index any field in the MongoDB. These indices are just like those in RDBMSs. You can also have secondary indices.
  1. MongoDB’s replica sets give you 2 or more data copies, which give you high availability. You can set each member of a replica set to take the primary or the secondary role whenever you want. The replica with the primary role performs read and write functions by default while the one with the secondary role uses built-in replication to maintain a copy of the primary replica’s data.
  1. MongoDB has a sharding feature for horizontal scaling. You can choose a shard key to determine load balancing/data distribution across different shards. You run MongoDB over several servers for this duplication and for resiliency in case of hardware failure. You can do automatic configuration and new machines are easy to add on a running DB.
  2. GridFS is a MongoDB function that allows you to use MongoDB as a file system. GridFS allows you to divide your files into chunks and to store the chunks as different documents.

Other notable MongoDB features are the ability to do batch processing and to perform aggregation operations, the use of JavaScript in queries, and capped collections (fixed-size collections that maintain the order of insertion).

ElasticSearch and its Features

ElasticSearch is cross-platform search server based on Lucene. It is written in Java and is an open-source software program. Of all the enterprise search engines, ElasticSearch is the second most popular.elasticsearch

  1. ElasticSearch finds primary use by offering a multitenant-capable, distributed full-text search function with schema-free JSON documents and it features a RESTful web interface. The term ‘distributed’, in this context, means you can divide indices into shards. Each shard can have several or no replicas. Each node has one or several shards.
  1. ElasticSearch allows you to do a scalable search. You can do searches in almost real-time. It supports multi-tenancy.
  1. Each node delegates operations to the specific shard or shards. ElasticSearch does routing and rebalancing between nodes automatically.
  1. The enterprise search solution has a ‘gateway’ feature that handles long-term index persistence. As an example, you can recover an index from the gateway in the event your server crashes.

Other notable features are support for GET requests in real time (making it a NoSQL) support for percolation and facetting which is useful in telling you whenever a registered query is matched by a document match.

Advantages of Using ElasticSearch alongside MongoDB

  1. If you need more than 5 indexes on MongoDB, consider using ElasticSearch because this search engine will give you faster results. For MongoDB, it is difficult and time-consuming to deal with large indexes.
  1. You may be asking yourself, why not use ElasticSearch as the main DB? MongoDB is the faster options if you only have a few DBs. You should, therefore, tune MongoDB for minimal indexes and it will outperform ElasticSearch.
  1. Another reason to continue using MongoDB is that ElasticSearch sometimes loses write operations when it is reforming and splitting the cluster. This common problem comes from ElasticSearch’s search engine roots. This means ElasticSearch is not the ideal option for your main DB.
  1. The best option is to have drivers for both MongoDB and ElasticSearch installed and to specify the use of both when writing your application. Other options are to use bi-lingua drivers, a good example being Mongoostastic, or go the Compose way where you let Compose’s transporter application to keep track of the data stored in ElasticSearch.

How to Set up ElasticSearch with MongoDB

It is possible to index MongoDB data using ElasticSearch. This involves installing ElasticSearch plugin.

  1. Once you have configured MongoDB as a standalone instance, the next step is conversion to a replica set. This is because ElasticSearch plugin is dependent on the MongoDBoplog (operational log), which logs all changes that MongoDB uses in self replication, to update ElasticSearch. MongoDB does not support built-in triggers, so this is the best alternative.
  1. The next step is installing the Java Run Time Environment. You will need this to install ElasticSearch. After these two installations, install a service wrapper.
  1. Ensure ElasticSearch is working. You can do this by sending HTTP requests to localhost:9200. After you have established that ElasticSearch is running, you need to install two plugins.
  1. The first of these plugins is Mapper Attachments, a dependency. There is an Elastic Search plugin script to do this. The other plugin is called ES ‘river’ for Mongo. This is a third party plugin, meaning installation syntax is different from that of Mapper Attachments. After installation, restart ElasticSearch service.
  1. The next step is ElasticSearch configuration. Note that search index setup is data-specific, but the default Elastic Search analyzers will fit most data types. Index management is through a Restful interface. Send JSON payloads telling ElasticSearch to be on the lookout for your data.

[Author- Jenny Richards is a well known database administrator. She argues that despite popular belief, even the best database will not cover all your database needs. Remote DBA Support uses ElasticSearch to optimize MongoDB queries.]

– NextBigWhat invites geeks to share useful tech notes with the audience. Feel free to get in touch: editorial@nextbigwhat.com

Ecommerce Marketplaces : Not All That Rosy For Sellers [An Open Letter]

[Editorial notes: Theoretically speaking, the ecommerce marketplace model is changing the game – for buyers as well as sellers. But ground reality isn’t that rosy. Hear it out from Gurudatt B Nadiger, Founder & CEO of a home appliance company, Smarthomez. Gurudatt has been actively selling on all the ecommerce marketplaces and has some serious feedback to ecommerce companies.]

We sell Home appliance products of all major brands like Milton, Cello, Nayasa, Signoraware, Prestige, Tupperware, etc.

As you are aware, all the above mentioned companies have moved from “Inventory based” model to “Marketplace” model. “Marketplace” model means the eCommerce companies do not own any inventory, they enable sellers and buyers to connect with each other and transact.

We know that the eCommerce companies have changed the way we do commerce in India. They offer discounts, wide product selection across all categories, faster delivery, customer care support, user friendly return policies, cancellation options, product exchanges and thus made our lives easy. We can sit in our home or office and order anything we want and pay easily with credit cards, debit cards or cash on delivery.

showrooming-ecommerce

So half a billion people are excited about eCommerce in India and this number is growing.

I will explain the other part of it – from a seller’s perspective. I will explain the hassles we face to keep you happy.

I was excited when I decided that I would sell home appliance products online through eCommerce portals. I made the list of products I wanted to sell and uploaded my catalog on the websites. On day 1, I got 11 orders. Who could stop me now? I was on a journey of infinite miles.

The initial days were good as I was just focusing on number of orders I got per day. I reached 10, 15, 30, 50 orders per day and I started dreaming of becoming a millionaire soon. Dreams are great but I was not keeping the accounts of the sales properly. One day, my charted accountant called to ask all sales and purchase details to file monthly returns, then I looked at all my bills, bank account statements, invoices, pending payments from eCommerce websites and could not find a logic or proper cashflow in my accounts. I started digging my invoices and got to know that I was losing more money on product cancellations, returns, logistics, and marketplace commissions than I expected.

On an average the marketplaces charge:

Marketplace commission – 15%
Domestic shipping per Kg – Rs 30
National shipping per Kg – Rs 45.
Fixed commission per order – Rs 10 ( for orders above Rs 250 )

Along with these, I incurred huge losses in

  • Customers using products for a week and sending them back.
  • Product damages (they tell us we can claim for damages, but they never do).
  • Product returns (they come in a condition, where we cannot resend to other new orders. Most of the covers/corrugated boxes of brands are damaged.)
  • Reverse logistics charges (When you cancel, the seller pays the return logistics charges)
  • Marketplace commissions (When you cancel, we the sellers are still charged the commission).
  • Product Cancellation : Paytm charges a commission of 15% + logistics fee of Rs 45, when you order and cancel in minutes.

See the logic, the customer cancelled it by choice and order not yet shipped. But still, seller has to pay commissions.

Please note that the average return rate for ecommerce in India is 30 %.

ecommerce-sellers

Our operational cost:

  • Office Rent.
  • Admin costs (I have 1 person for packing apart from me )
  • Packing material costs (on avg Rs 15 per order package ).
  • Transportation cost incurred for product purchases.

I do not have a retail shop, so my costs are minimum. But can you imagine the above expenses if I was paying Rs 1 lakh rent for my shop?

Logistics Issues:

[1] The pickup guys do not come regularly. If they skip pickups for 1 day, 30 % of our customers cancel the orders. And no company takes the responsibility. They tell you, “vehicle was not available”.

[2] We have to call the pickup guys every day and tell them the number of orders and whether they should send a van or bike. Amazon and Flipkart does a good job here by making the process automated. But Ecom, Bluedart, Delhivery teams are way behind in communications.

Payments:

[1]  Shopclues takes 30 days to settle the payments (so we quit selling there).
[2] Flipkart -15 days for settlements after the product reaches customer.
[3] Amazon – 10 days for settlements after the product reaches customer.
[4] Paytm – 8 days for settlements after the product reaches customer.

Sellers are made to compete for pricing. I have seen sellers playing the number game rather than serving the customer. Sellers are left with very little or nothing at the end. You will ask, why are sellers not complaining? I do not know. But most retailers who started selling online but gave up after 2 to 3 months, couldn’t communicate with anybody. They either get satisfied with offline sales or think it’s not for them.

Every day thousands of sellers are added with no knowledge of the rules of the game. The companies talk big numbers and sign them up. But the companies never call and ask you how you are doing or what problems are you facing with business or how they can help to grow our business…?

Taxation:

I bet 99.999% of charted accountants do not know how eCommerce taxation works. Not to blame them, but every company generates invoices in different formats and and when we sit for filing our returns. It is a headache for all of us.

Marketplace?

The eCommerce companies have total control on our inventory. They can block us anytime, make our listings inactive anytime, can damage our orders in transit, delay our payments, cut huge commissions, cut buyer claimed refunds without giving any notification.

Dear Online Buyers:

Who is paying for your offers or discounts? Please note, that to change your online purchasing behaviour, habits or addictions, eCommerce companies are just racing to capture the marketshare to get more online buyers, increase their buying trends, capture all your shopping data to raise the next billion dollars from venture funds.

There is nothing wrong in eCommerce companies modelling their business and pricing the sellers with such policies. But in the long run, this is a biased business model, where sellers are screwed to make customers happy. The discounts and offers do not go a long way and the customer expectations are increasing day by day. To meet those expectations sellers are giving up their margins and closing businesses.

I am still optimistic about my business and not quitting my journey. It’s a start.

I am here to build – not to fall.

Image credit: baynote

Voonik Story : From An Idea To Building Traction. This Is How They Did It

Voonik, a personal shopping app for women, just announced its Series A investment from Sequoia and Seedfund. Sujayath Ali, CEO & Co-founder of Voonik, shares his story.

As a boy, I had grown used to my dad commenting on my dress sense, or lack thereof. And after I got married, my wife picked up where he left off.Voonik

I thought luxury brands and paying more for clothes would be the key to my external transformation but that strategy didn’t seem to help. That’s when I asked myself, “If I don’t need to be a geek to buy a laptop, then why should I know about fashion to buy clothing?”

This was 2013 when a shaky economy and uncertain business outlook made it a less than ideal time to turn entrepreneurial. But that’s when my cofounder Navaneeth and I launched our company, Voonik. The NextBigWhat article about our launch said:

“With fire sales and all the negativity around e-commerce in India, this may not be the best time to start a new online commerce site. But then, the startup world never fails to surprise.”

Navaneeth and I went to college together and have known each other for 15 years.  Navaneeth was not new to the startup scene, having been a garage stage engineer at companies such as Zoho, Freshdesk and Aryaka.  I was in the US and had spent seven years at Amazon and a year at Visa as a product guy.  We first discussed the idea of starting something together over a Facebook chat session. Navaneeth had an idea for a Saas offering based on his experience at Zoho and Freshdesk. I pitched my idea of creating a new way of shopping that enables users to buy what suits their build, lifestyle, and budget. He was convinced. I returned to India in 2013 and Navaneeth quit Freshdesk to jump into our venture.

The first few months were pretty uneventful. We put together a small team and launched a MVP version of the product. I remember the early days with no customers and sales. I will admit it was a daunting period and there was a point when we contemplated pivoting to his Saas idea. But our core belief in this idea was what kept us going. Slowly, traffic built up and sales started happening.

I remember a meeting with Mukesh Bansal, CEO of Myntra, around October 2013. He liked what we are building and mentioned that Myntra would look like Voonik in two years. That meeting boosted our confidence and kept us going. Sure enough, after two years, we are now seeing Myntra moving from a price and selection value prop to a personalization value prop with its app-only move. Mukesh did invest a small amount in Voonik and remains a mentor.

The first big break came in the form of a TV program, ‘The Pitch’, organized by Bloomberg TV. We participated and eventually ended up winning the show. There were many other more seasoned entrepreneurs who participated in the show and we are still not sure how and why we won. In fact, I was eliminated in one of the rounds and later got in as a wild card entry. The winner was eligible to receive seed money from Seedfund. We got 2.5 crores through this route in exchange for 30% of the company.

Following this boost to our morale and finances, we started building the full version of the product and the personal shopping platform. After studying the numbers from the MVP period, we decided to focus on women as our primary target segment. That was the first of the three important decisions we made that ultimately contributed to the success of our venture.

Soon after this, we got an invite from Microsoft Ventures. Given that this was a no-equity program, the decision to participate was easy. In Feb 2014, a week after starting our Microsoft Ventures program, we launched our full version website powered by our own personal shopping platform. We were buoyed and ready for the ride ahead but the initial parts of this were not as smooth as we anticipated.

We had to weather a rough six month period when we would grow one month and retract the next. Thankfully, Bharati Jacob, our board member from Seedfund was patient and allowed us time to figure things out. We had grown by 150% in these six months, but we did not think it was significant given the low base. Bharati believed in our value prop and pushed a second tranche of funds through for us. She counseled us to focus on retention rather than conversion or growth. This turned out to be very sound advice that helped us make the second most important business decision in our journey.

The next turning point was in August 2014, when we launched our Android mobile app.  Within weeks of the launch, we realized that it would be difficult to compete as a fashion website given the incumbents in the space but we also realized that the app market in the fashion space was wide open. So we diverted our efforts to building this. That was the third and the most important decision after which there was no looking back.

Before the launch of our app, we had talked to two to three VC firms who liked our idea but sought evidence of more traction. As we launched our app, we started getting inbound calls from various analysts of VC firms. We made sure that we gave them our time and as a result we got through to decision makers in all the leading VC firms. Our talks with various VCs were in different stages when we met Sequoia.

We met Sequoia at NextBigWhat’s mobile conference (bigMobilityConf)* in late 2014. An introduction through this channel led to a 30 minute meeting with Shailendra Singh who was very positive about what we were building at Voonik. He was probably the person who was most bullish about the idea, after Navaneeth and me.

We then presented to the Sequoia board and listened to some concerns that they expressed during this time. These were issues that we also wanted to address and we spent the next few weeks tackling these. Between Sequoia and Seedfund, we raised 34 Crores as part of Series A.

Sequoia moved quickly to close things with a simple and standard term sheet. They wired the first tranche within weeks with minimal due diligence. The second tranche came in less than a month after that.

I am proud to say that today Voonik is the highest rated fashion app in India. We now have more than 1.3 million downloads and were the second most downloaded fashion app in April and May, next only to Myntra. We are looking forward to reaching a $100 million GMV run rate in the next year. We have reached this stage in our journey because of our persistence, a few important business decisions and some very timely funding support.

* Founders  : Go ahead and block your seat for the upcoming conference, UnPluggd. At NextBigWhat, we always strive to focus on meaningful conversations and connections (sans noise).

Why India’s Healthcare Industry Is Ripe For Disruption !

The biggest disruptions in Indian B2C e-commerce systems so far have happened in the areas of

“Roti, (remember the times when we had 10’s of menus stored in a drawer for ordering)

Kapda, aur (this refers to apparel and e-commerce in general)

Makaan (there was a time when the sole flow of information came from the brokers)”

 Of course, there are other areas now which have seen innovation (like daily transport etc.)

While this part is understandable, what is baffling is how muc

Healthcare Workers Administering Polio Vaccine (Image Credit: rupa / Shutterstock.com)
Healthcare Workers Administering Polio Vaccine

h healthcare has been left behind from a consumer’s perspective.

There are 3 main reasons:

1. Lack of touchpoints: Our daily interactions with healthcare systems are minimal for us to understand in depth the nature of transformation it should go through

2. Of the doctors, by the doctors, for the doctors: The healthcare ecosystem has been built around the doctors, who tend to be more cautious while adopting new technologies (for good reasons sometimes) and haven’t been a part of the digital revolution happening everywhere else

3. Lack of glamour: Any healthcare entrepreneur will tell how difficult it is to attract talent from a ‘cool shiny app’ company because healthcare is not cool enough!

But why do entrepreneurs keep innovating in this industry despite the roadblocks. There are macro factors at play which have created billion $ companies in other sectors.

1. Unorganized industry: Largely any healthcare segment is highly unorganized. Take diagnostics labs for example, which is 90% unorganized. The unorganized players typically do not have the marketing and logistics bandwidth that an aggregator or e-commerce company can provide

2. Importance of asset utilization: Being capex intensive, most healthcare services need high asset utilization above anything else. For example, hospitals measure revenue per bed, capex per bed etc. These are the same factors which made Uber and AirBnB successful

3. Lack of transparency: Healthcare players traditionally do not prefer to keep their prices transparent, not unlike real estate industry which has since matured and the information assymetry reduced

4. Immense scope for impact: While some entrpreneurs see it in numbers and others in terms of lives changed, there is no denying that any innovation healthcare industry has a huge impact on the society as a whole.

But these factors have always been in play. What has changed that makes this industry ripe for #Disruption?

1. Spillover from e-commerce mindset: Today when a doctor writes prescription for blood tests, the customer first wants to check on his smartphone how much it is going to cost him (and maybe if there are any discounts!)

2. Breaking of doctor-patient bond: With a high floating population and back-room healthcare deals becoming more visible, the traditional doctor-patient bond is becoming more and more fragile. As one doctor put it “Since there was an episode on Satyamev Jayate on doctors, we are afraid to suggest any particular provider or brand lest the patient should think we are getting a cut”

3. Now everyone has a smartphone: The way smartphone has changed how we travel, eat, buy will also impact healthcare in the same way

[Author: The author, Ujjwal Chaudhry is the founder of the online diagnostics portal labstreet.in He was heading the healthcare vertical for a consulting firm for 5 years before starting out on his own.]

Image credit: rupa / Shutterstock.com

An Open Letter To Rahul Yadav Of Housing

[Editorial notes : Over the last 2 months, a lot has been talked/debated about Housing and its CEO, Rahul Yadav. Below is an open letter by an entrepreneur who now handles product function in a similar space. But to avoid personal attacks, the author has prefered to stay anonymous.

Like with all things opinions at NextBigWhat, we recommend you to stick to the context.]


Dear Rahul,

Congrats for hijacking the news for last 2 months. You have been able to distract many people (including some from your own company) into reading about your gimmicks and tantrums.

Rahul Yadav
Rahul Yadav

I, like you, am an entrepreneur, who really believes in making difference in peoples’ lives through technology and not-so-much in making millions of $$$. But unlike you, I could not scale my startup after failing to raise money, so I chose to get acquired by one of your competitors.

I am writing this letter because I am fed up with all sorts of questions, people have been asking me about Housing and Rahul Yadav. People, who are not looking for a house or land or PG and are not even connected to start-up ecosystem in any way whatsoever. That’s one kind of brand to LOOK UP to!

On a serious note, why are you doing this? Initially, it seemed like things went out of hand and the news was just blown out of proportion by media. But you seem to be really enjoying the limelight and are now making sure that everyday, you feed something to media to write about. And all this while distracting yourself and hundreds of housing employees and of course, yor investors. BTW, when was the last time Housing came up with a new product? Burn!

Housing is a great company; I give you that. Kudos to what you guys have achieved in a short span. But to think that Housing is the most innovative company in India and have even out-smarted Trulia and Zillow (which happen to be pioneers in this space) is bullshit. Zomato, which according to you is no better than a scanner of food menus, has grown in 22+ countries and had balls to put entire fund-raise at stake to acquire a company. I don’t know how you define innovation.

You claim Housing’s data science which you claim is the coolest thing in real estate industry today. Let me not spill the beans about how a bunch of people who smoked up all night and came up with a bunch of city heat maps by morning, mostly using Google data. Since you guys are pretty good at doing PR, DSL is perceived to be a product gospel.

Why don’t we get some context here?

1. Trulia’s Heat Maps [link]

2. Housing’s Heat Maps [link]

3. Even a lesser-known Indian startup in this space, Realizing.in has pretty decent heat maps [link]

Here is something more. We participated in a housing hackathon some time back. There, I witnessed housing’s obsession with Virtual Reality. And let me not remind you which company developed first virtual reality based product in global real estate industry. Since, our team built that product, one of Housing’s co-founder asked us to join the company. But we didn’t. You know why Rahul, because not everybody wants to join Housing.com.

I am, in no way, trying to undermine Housing’s achievements. I am just saying that, no company is perfect, and Housing is no different. You guys are no rocket scientists. You hire people from the same colleges as many other startups do. So please stop behaving as if Housing is an impeccable piece of work, which no one in the world has ever matched. And you would know better than me about the transient nature of tech industry. Do you remember the last time you used a Nokia phone or Just Dial service or Google Groups.

Deepinder Goyal rightly compared you with ArvindKejriwal. Well, Mr. Kejwal realized his mistakes in time and came back as a much mature leader who then got all the love from people.

You know Rahul, one of the biggest qualities of a true entrepreneur (one you claim to be), is humility. It’s high time that you let go off this arrogant and I-don’t-give-a-f*** attitude towards the world and take a chill pill.

Lastly, ‘Bhai chill mar.Bak**odi band kar aur kaam karle!’

I don’t want to disclose my identity because I don’t like unwanted controversies and would rather focus my energy on building awesome products. I won’t be surprised if you shrug this letter as an attempt by competitor to malign Housing.

Hope this letter puts some sense in you. You can thank me later :)

Views are completely personal.