I earlier covered the rise of Sri Lanka as a startup hub and one of the key drivers of this growth is the set of people who returned from Silicon Valley and have brought a great product culture to the country.
One such individual is Sanath Fernando. Sanath runs LinkLK platform and is driving change at a much deeper level.
LinkLk is essentially a platform play that has launched services like FinanceLK (Mint for SL), CabsLK (online cab booking service), SportsLK and TicketsLK (online ticketing service). Importantly, Sanath is incubating a team of entrepreneurs who are taking the LinkLK platform to different verticals.
Sanath left Sri Lanka for the United States in 1988 due to the political strife in Sri Lanka that led to the closing of local universities.
I had completed my GCE A/L in 1986 and gained admission to the University of Moratuwa, but only attended 1 day of classes in the next 2 years. During this time I did some part time internships and towards the mid/latter part, worked on gaining admission to US Universities. I was fortunate to receive a full scholarship from an Ivy League institution – the University of Pennsylvania. There I was able to get a B.S.E & M.S.E in Electrical Engineering and a B.S.Economics from the Wharton School during the next five years.
He then spent a couple years after graduation, doing hard core engineering work but then moved on to a Wall Street career.
I spent over a decade in Wall St. related jobs, finally serving as Managing Director of Charles Schwab Capital Markets. During 2005/2006, my wife & I decided that we wanted to raise our children in Sri Lanka and thus we returned back home.
NextBigWhat: Your vision for LinkLk and FinanceLk? How has been the traction so far?
Sanath Fernando: The vision for LinkLK is to be a platform for innovation in online and mobile transactional services. While social media links, messaging (via LinkBox), etc. are supported by the platform, these services are there to facilitate other transactional businesses, e.g., TicketsLK. The platform provides single sign-on (SSO), a community that includes both individual and corporate consumers, communication facilities (email, SMS, P2P/broadcast messaging, etc.) and a payment platform.
Globally, more so in this region, online is a small fraction of total commerce. For any application on the platform, LinkLK offers a distribution channel that includes mobile and offline as well. We have integrated with all 5 local mobile carriers who run a “LinkLK Channel Console” that allows us to push any application that is then available for the carriers to make available to their consumer base. The same “Channel Console” is available at numerous offline locations (bookshops, coffee shops, etc.), where consumers are able to transact LinkLK services in person, using cash if necessary.
TicketsLK is currently the most popular LinkLK service with around 70,000 customers who transact up to Rs. 1 million per day on that service. TicketsLK offers the benefit of online/mobile and offline ticket purchasing to movies, concerts, dramas, business events such as seminars and other corporate events, sports events such as motor racing, etc. TicketsLK has built the brand and trust where consumers are comfortable using their credit cards online – yesterday (May 15), a single ticket purchase transaction was consumated at over Rs. 70,000.
The FinanceLK service brings the convenience of single portal manageability across bank accounts, credit cards and bills. While the service is built to support both individual and corporate users, our marketing efforts to date has only focussed on corporate clients and that too only on the “Mobile Bill Management (MBM)” module of FinanceLK. Up until the end of 2012, we were totally focussed on building our products – with our first sales/marketing hire coming on board a couple months prior to year end. In under 6 months of sales effort, the FinanceLK MBM module is today deployed at numerous blue-chip corporat clients.
Via the module, we reach over 16,000 corporate staff members today with the goal of pushing that number to 500,000 within 18 months. With all manner of non call related charges on mobile bills, every company has to process payroll adjustments based on mobile bill charges of their employees. To facilitate this need, we have the corporate structures of all our clients defined in a cloud environment that in turn gives us the ability to push other value added services – payroll processing, expense management, etc.
NextBigWhat: You also run an EIR (Entrepreneur-in-Residence) model..Let’s talk about that.
Sanath Fernando: While I would ideally love to have an EIR model, what we currently practice is a somewhat different. An EIR model would not be understood in Sri Lanka – not yet. With parents having a large influence on the job selection of young persons, the traditional model needs to be followed until we can get some success stories around direct university to Entrepreneurship.
We follow a traditional recruiting model, but with new hires, the emphasis is on entrepreneurial traits rather than specific technology skills. It is stressed to each person that interviews – and reinforced more for new hires – that they have the freedom at Ridgecrest (the parent company) to follow their impulses and ambitions. It is clear to everyone that they are free – and in fact encouraged – to build a LinkLK platform business and if we see traction, that the company will seek investors/partners and spin-off an entity around that business.
Even this is in fact quite a high risk model given that you are mixing a real company with experimentation and multiple businesses that may be unrelated (beyond the commonality of the LinkLK platform) and with it diluting your focus. The goal is for Ridgecrest to be an incubator with a dedicated division handling the core LinkLK platform.
NextBigWhat: You are also taking the platform to colleges, right?
Sanath Fernando: I believe the success of the LinkLK platform will ultimately depend on student projects much more so than on our psuedo-EIR program. Initially we started working with final year students, but then after a while realized that this doesn’t work… when they graduate, there has not been sufficient time for the product to gain traction/revenue and thus, following traditional norms, they move on to a regular job.
With this realization, we switched to working with students at the beginning of their 2nd year. This gives us 3 years to work with them while they are still in school and today, over half of the Moratuwa University IT Faculty do their 2nd year projects on the LinkLK platform. The current batch are doing projects in healthcare, social networks, kids/education, location based services, etc.
Ridgecrest provides all the facilities these students need to be entrepreneurs while still in school. This includes hosted source code version control systems, continuous integration facilities, test and production deployment machines among infrastructure and then constant tutoring and mentoring done by Ridgecrest staff. Ridgecrest acts as a part time University for these students. All of this is non revenue generating cost which does add to the riskiness of the model, but albeit with huge potential upside.
NextBigWhat: Hows is the startup ecosystem in SL? What do you think is the biggest opportunity/blue ocean for SL market, given that Internet penetration is still below 5mn.
Sanath Fernando: I have been working towards promoting entrepreneurship in Sri Lanka for 4+ years. For the initial couple of years there was little progress and I was actually getting quite frustrated and near ready to give it up. During the last 1 1/2 years or so though, we have seen not just traction, but almost an explosion of activity. Venture Engine (VE) has been a huge success.VE led to the formation of the Lankan Angel Network (LAN) that meets once a month. LAN has restricted membership with it being made clear to members that they must be prepared to give their time to entrepeneurs in addition to funding.
While internet penetration is low, there are extremely encouraing signs that this is changing. The ratio of mobile subscribers to population is greater than 1:1 and there is exponential growth in smartphone sales. Without reference to a particular industry or sector, I believe there is huge opportunity to completely bypass online in Sri Lanka and focus on a mobile only (or mobile first) strategy.
Any entrepreneur in Sri Lanka though, must face up to the limited market size – locally. This however does offer some advantages. The first mover advantage is huge – once you gain a reasonable market share, it is simply not cost effective for a 2nd entrant to exist. More importantly, Sri Lanka is a great proving group. All our employees and our student community are always reminded of this – test your product in the local market, but always plan/build for the global marketplace.
Like we shared earlier, if you’re from Sri Lanka and reading this, we’d love to stay engaged. Please feel free to share more about the Sri Lankan startups with the Indian Startup community.