Designing Innovative Business Models

While everyone in the tech industry focuses on innovation of their product, one great way to create value is considering innovation of your business model. In past few years, we’ve witnessed a number of technology companies creating or completely transforming entire industries. Some examples include Amazon Kindle, Apple iPhone, Google Android and NetFlix. If we see in all these cases, their success was not the result of new or disruptive technology advancement, but rather a unique technology application based on a business model innovation that was disruptive in some way. An innovative business model can create a new market or allow you to exploit new opportunities in existing markets. Your business model can make the difference between world-leading success and dismal failure.

Examples:

  • Just ask the people behind the Xerox 914. In 1959, the first dry-process, plain-paper copier was a potential game-changer — but it cost six times the price of alternatives. Potential partners wouldn’t touch it. So the company developed a new business model. Rather than selling the machine, they leased it for $95 a month and charged a few cents per copy for copies in excess of 2000 a month. Thanks to the 914′s speed and convenience, customers soon were making tens of thousands of copies in the same period, and the copier that couldn’t be sold suddenly became a huge revenue generator.

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  • Apple’s iTunes, like iPod, was not the first product of its type on the market for purchasing music online, but innovated the business model to sell more iPods by enabling single song downloads for 99 cents and removing all of the listening restrictions that had existed before then (except for DRM). They innovated again with iPhone and the App Store, not by having these products first, but by creating an app ecosystem that was managed outside of the mobile operators.
  • Dell disrupted the computer industry by making computers to order exemplifies this opportunity.

dell taco

 

  • Taco Bell, which did not create a large-scale disruption but innovated business model design by sending food in precooked bags to restaurants. This allowed them to price their food less than competitors.

 

Multiple ways companies can innovate their business models:

  • Add innovative activities through forward or backward integration. This is referred to as new activity system content.
  • Link activities in cutting-edge ways; this form of business model innovation is new activity structure.
  • Change one or more parties that perform any activities, or new activity system governance.

 

The Power of Business Model Innovation

As companies become successful with a business model and as they mature, they refine and hone their skills and processes to optimize their model. This helps them to achieve scale and high growth and profits. It becomes corporate DNA. Industries tend to be dominated by a single business model, and the market leader will continue to enjoy leadership as long as the business model satisfies the majority of the segment needs. This is why a new entrant attempting to attack a market leader head on using the same business model will likely always lose, regardless of a few interesting feature enhancements.

 

[About the author: Pinkesh Shah, Executive Board Member, Institute of Product Leadership. Pinkesh specializes in Product and Business Line Management, New Product Development & Launch, Business Development and M&A, Product Management and Product Strategy.  He is currently helping build IPL, the world’s first B-School focused on Product Leaders.

Website : www.productleadership.com ]

(Originally published on productleadership.com. To go to the original article click here.) 

“Record Your Moves…”

 

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I have this habit of writing down my decisions along with the pros-cons for that decision that I see at that point. Over the years, I have felt this habit to be a great boon, especially during analysis of results, when decisions have gone horribly wrong.

Recording your ups and downs & decisions is an important aspect in the entrepreneurial journey. Why?

Several reasons…

  1. Improved Decision making : 
    • Firstly, writing down things improves your clarity of thought. When you write, you are able to detail out the reasoning behind the decision.
    • Second, one is able to clearly think through the worst case analysis.
    • Some results take a long time to reach. So we may not clearly remember in memory why we took that decision. If written down, it’s easy to go back and check to see why the decision was taken.

    Sometimes, you are amazed that you could look ahead, predict & strategize. Sometimes, you feel like kicking yourself for overlooking some obvious things & messing up.

  2. Tracking where it went wrong:
    If you write down, you are able to clearly pinpoint why you went wrong, with timelines.
  3. Team Related :
    Once a decision is taken, it helps to keep your team informed at the same level, why some decisions were taken with clear pros-cons analysis. It does help get the team buy in.
  4. Tracking your journey :
    Some days are very bad & challenging & some wonderful. A few moments taken to jot down your true feelings and emotions at that point, will be a valuable treasure that you can look back with pride on how far you have come.


Being an aficionado of the game of chess, I have always enjoyed discovering similarities that exists between entrepreneurship and chess.

The first thing that chess players do is record their moves, so that they can analyze their own games in the end. Recording their moves also allows others to learn from their games and vice versa.

Grandmasters have been doing this for centuries together, analyzing their own games & others’ games and improving themselves.

Hence writing down your moves (decisions with reasons) in the game of entrepreneurship is key. Its time entrepreneurs did this as well, recording their journey, analyzing it, sharing with others as well as learning from others.

After all, Entrepreneurship, like most things in life, mirrors the great game of chess!

 

This is the eleventh part of a series by the author. Find the previous post here.

shashi

[About the Author: Shashi Bhushan is the Founder & CEO of HealthMacro Technologies.  He plunged into entrepreneurship to explore his dream of building something that touches people’s lives. HealthMacro were TiE’s AnthahPrerana 2013 winners. He can be followed on twitter at @ShashiBhushanHR]

TiE Product Showcase : Building Hardware Startups

tie

In the recent past, the hardware startup revolution has picked up steam and begun to mature. These companies are now gathering the kind of attention previously reserved for their software counterparts. Owing to decreasing cost of prototyping, the entry barrier has been progressively reducing and making it more feasible to develop a physical product within economic constraints, and other favourable ecosystem conditions, like the birth of hardware centric startup accelerators, have marked the beginning of disruption in the Indian manufacturing ecosystem.

TiE Product showcase is a monthly event organized to help entrepreneurs pitch their products in front of TiE members, investors and charter members. The showcase for this month was hosted in partnership with Workbench Projects to help entrepreneurs showcase their solutions to a panel of leaders from SAP the industry.

Meet the Panel:

 

Product Showcase Format:

  • Panel discussion
  • Hardware Product Showcase of curated startups
  • Networking

Entrepreneurs from 4 start-ups pitched their ideas in front of the jury panel and the audience.

#1

see-how

 

Seehow is building cricket coaching system for bowlers. Today’s bowlers do not have access to technology to help track and improve their performance. Most of the practice sessions are ad-hoc and manual. Seehow is building smart cricket balls with sensors to track spin, flight, bounce and speed and provide instant feedback to the cricketer. The system provides performance reports for bowlers as they navigate through their cricketing life and allows to benchmark against the world’s best.

see

The same technology could also be used to track performance in other racquet and ball sports.Dev Chandan and Sid George founded the company last year. They have been part of under 18 club cricket and are intricately familiar with the game. The startup demonstrated a cricket leather ball with integrated sensors. The startup is gearing for production of these cricket balls and currently working with several cricket clubs who are testing the technology.

 

#2

iris

Senze from IrisInd is an IoT based technology that aims at making regular objects smart and sort and make sense of the data such objects generate. The startup is implementing this technology in the retail segment giving brands new touch points to interact with consumers. Senze essentially enables businesses to develop smart things using smart paper. A paper like device, an accompanying mobile application and a SaaS platform captures interaction of the consumers with a brand and provides insights to the brand. The system is very customizable, enabling brand owners and marketeers build a new campaign everyday based on the analytics.

senze

The Cochin based company was founded by Kavi Murugesan, Jose Anthony and friends. They are currently testing the product with various retailers in India.

#3

avench-logoAvench Systems is an electronic product design and development company specialized in embedded systems. They are in the business of making technology adaption easy and beneficial to various business verticals and in the process of creating products which plug the gaps between what technology has to offer and the customers’ needs.

avenchPowerPanda is a modem power backup turned portable power source that ensures indefinite power to modem and Wi-Fi routers. It was one of the products showcased by Avench Systems. Broadband internet connectivity is an essential facility for everyone today. Availability of power for the access device like a modem or WiFi router could hinder this at critical times of need. PowerPanda is the solution to this problem, helping people to stay connected.

 

#4

cyc

Cyclops MedTech Pvt. Ltd. is a Bangalore based start-up working extensively in the areas of eye tracking and vestibular science. Their vision is to create highly innovative and cost effective medical technology and devices which can dramatically expand the diagnosis horizon and thereby aid in faster and better cure.

cyclops Their product, a “complete balance assessment tool” is a wearable clinical device used to diagnose vertigo. The device was tested at a leading ENT centre in Bangalore for over 6 months. The device was showcased at AOICON and received a overwhelming response from ENT specialists from across the country. Presently they are on the verge of completing our beta prototype and the product should be commercially available by the end of 2015.

The company is being incubated at the Bio Medical Innovation Centre at BMS College of Engineering, Bangalore.

[About the Author: Poojita Raj is a second year BTech student of PES University. She is pursuing Computer Science Engineering and is an intern at TiE.]

What If You Are Not Like Steve Jobs?

What If You Are Not Like Steve Jobs?

Some days back I started reading Walter Isaacson‘s “Steve Jobs” all over again. Chapter fifteen, titled “The Launch” is about the launch of the first Macintosh in 1984, and ends with the following sentences:

neither Raskin nor Wozniak nor Sculley nor anyone else at the company could have pulled off the creation of the Macintosh. Nor would it likely have emerged from focus groups and committees. On the day he unveiled the Macintosh, a reporter from Popular Science asked Jobs what type of market research he had done. Jobs responded by scoffing, “Did Alexander Graham Bell do any market research before he invented the telephone?”

I paused here, and thought:

Where does market research fit in when you have a CEO with a strong intuition and gut feel?
Jobs is famous for eschewing market research because he believed that it only yielded needs, wants, preferences of yesterday and not tomorrow. “It’s not the consumer’s job to know what they want”, he is known to have said when asked about market research for the iPad. And Jobs is hardly alone in this regard. Henry Ford is known to have said “If I had asked people how they could go faster from point A to point B, they would asked for more horses”. But for all the mavericks, you also come across many a quote about how important it is to know what customers want, such as this one from Sam Walton, no less an entrepreneur himself: “Focus on what the customer wants, and then deliver it”. To some extent, they reflect the differences in philosophies, strategies, positioning and target markets. While Walmart is about delighting customers with “Always Low Prices”, Apple is about delighting customers with products that they are willing to pay a premium for.

Interestingly, I came across an article in Economy Watch, which cited a 2011 survey done by the MIT Sloan School of Business.

According to a 2011 survey by the MIT Sloan School of Business, nearly 80 percent of all brand and market management decisions made by top-performing companies were primarily based on their CEO’s intuition, rather than any form of market research.

Below is the infographic that explains this survey, with a conclusion: Market research will always have its place, but it must be coupled with human instinct.

ceo-gut

So, when we read, “Market research will always have it’s place”, what does that mean? Can we strike a balance between driving forward with intuition and knowing when, how much, and what market research to do, especially if you are not like Steve Jobs?

WHEN

Very few products that get launched create entirely new categories in the market. Most products are evolutionary, better, faster, cheaper version of something that already exists in the market. For revolutionary new products, like the automobile, the telephone, an intuitive gut feel (defined in the infographic as Domain Knowledge + Self Knowledge) is likely to be more insightful than exhaustive market research. (It can be debated whether the iPod, iPhone, iPad are truly revolutionary products, as music players, smart phones and tablet computers had existed before, but the experience that Apple created was revolutionary. This can be the topic of an entirely separate post in itself).

Given that 80% of all new products fail, and if they were all driven by a visionary’s instinct, it is not clear if market research would reduce this number. Even the Macintosh was not successful initially, one of the factors that led to Jobs getting the boot. It is hard to say whether market research, rather than Steve’s intuition, could have saved the day for the Macintosh. But for most products, it is worthwhile to keep the ears closer to the ground.

HOW MUCH

This is a tricky one. How do we know if we have done everything we can to truly understand the market and customer need? Before we even embark on a market research project, we need to be clear about the goals of engaging in the exercise. What do we want to learn? is more important than What do we want to ask?. Many market research efforts tend to start with the latter and once all the truckloads of data is in, the effort to glean insights begins. So, it is important to ask the last question first.

Perhaps the people at Coca-Cola Company who did two years of exhaustive market research and conducted over 200,000 taste tests for New Coke fell into this trap. Through all these taste tests, they would have likely asked customers which tasted better, regular Coke or New Coke. And quite possibly, New Coke did taste better. But they failed to ask a critical question: Do you want a New CokeAs they say, a product launch is the most expensive form of market research!

WHAT

There are a number of techniques for doing market research, and we will not go into each one of those here. At a high level, the techniques can be broken down into two broad buckets: Discovery and Validation. Discovery research tends to be exploratory and qualitative in nature, and is inherently open ended. This is more art than science. If you are creating a new type of camera, a customer’s need to feel confident in taking great pictures (as opposed to finding out after the fact that the focus was elsewhere), and create fond memories is more important to understand than knowing whether a camera should have 5.0 megapixels vs 50 megapixels, or a 3″ vs a 2″ display screen. Validation research, on the other hand, is pointed, quantitative and has specific goals. To take the camera example further, among the many questions that could be asked, one for instance could be about knowing whether people shoot video with their digital cameras. The Lytro camera is a great example of a new camera that addresses the need to take great pictures that are never out-of-focus, and does not shoot video!

The customer’s ability to express problems and needs is critical because their articulation or lack of it can create a gap between actual needs and expressed needs. Another thing to be aware of is that many customers start designing solutions to their own problems. So it is important to focus on the customer’s reality than their imagination.

The key thing to keep in mind, whether you are a visionary CEO leading with your gut, or doing market research, is that the quality of the answer received is highly dependent on the quality of the question asked.

 

[About the author: Rahul Abhyankar – Cofounder, Director of Programs and Faculty, Institute of Product Leadership. Rahul has over 25 years of high tech experience spanning product management leadership and engineering roles across large multinational companies and startups, delivering new product innovation in software, cloud, data analytics, hardware, and SaaS products/platforms. He is passionate about building products, cross functional leadership, mentoring and coaching.

Website: www.productleadership.com]

(Originally published on productleadership.com. To go to the original article click here.) 

 

TiE Workshop: Why does Pricing matter? Pricing power, strategies & models and why choosing the right one matters

Workshop: How to price your e-commerce offering?
Speaker: Vivek Pathak

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On the 15th of June, TiE Bangalore organised a workshop on a subject that has eluded mass attention up until now. Pricing strategies play a pivotal role in determining the success achieved by any business. With the rapid rise in e-commerce startups, it has become essential to understand conventional pricing strategies and modify them as per the needs of the emerging market.
Mr. Vivek Pathak, Head of Business Strategy and Development at eBay India, drew upon his experience spanning 13+ years of working for companies like eBay and Google to present to the audience an exciting presentation on pricing strategies in the digital economy. He touched upon various subjects like the importance of pricing, the economic theory of pricing, the conventional pricing models, pricing power, new pricing strategies for the developing digital economy and the financial perspective of it.
Here are some of the key takeaways from the session:


Why does pricing matter?
“Right Pricing is one of the most important decision you’ll make for your business.”
  • Pricing significantly impacts the demand of your product. The seller needs to understand the market behavior to develop the perfect pricing model and continue testing and experimentation.
  • Knowing the price elasticity of demand is important. Price elasticity of demand is taught as one of the basics of economics but it is vital to have a clear understanding of the subject to truly develop your perfect business model.
  • It is important to note that pricing is both an art and a science- there is no golden rule to it.
  • Among the elements of the traditional marketing model- product, price, place, promotion- pricing is the only element that brings the revenue, all others are costs.
  • Price Elasticity Of Demand = (% Change in Quantity Demanded / % Change in Price). It is imperative for any business to know which side of the curve they are on.
  • The perfectly elastic side of the curve chiefly incorporates businesses that sell commoditized products i.e., there are alternatives available to the consumer. These businesses need to be careful about their pricing structure as the consumer has alternatives.
  • An example of a business on the perfectly inelastic side of the curve would be luxury goods sellers. The prices here can go very high, making it important for the seller to know the kind of leverage they hold over the consumer. Over here, the seller has the opportunity to gain massive amounts of profit.
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What are some traditional pricing strategies?
  • Cost Based Pricing- Perhaps the oldest and the simplest pricing model, this means that the pricing decided by the seller is the sum of the manufacturing cost and the desired mark up on that product. This model does not take the consumer and the market into consideration. This model works well in a monopolistic market.
  •  Demand Based Pricing- This model is based on the consumer’s demand and how much the consumer is willing to pay. It takes multiple factors into consideration but results in the sales will be high during peak demand periods and will suffer a low during periods of low demand.
  • Competition Based Pricing- This model is based on what the market is offering for the same product. This leaves the seller in more of a reactionary stance in an attempt to catch up with the market thus, the speed of execution matters a lot. The fast ones will be setting standards for the market instead of chasing it.
These pricing strategies have been employed for centuries but the digital market demands newer, fresher, more dynamic strategies. Any startup thinking of pricing strategies has to think beyond these conventional pricing strategies.
“It is imperative for the seller to find the right balance between price and value.”


Pricing Power
  • Pricing Power in Layman’s terms is the effect the change in your product price has over its demand in the market.
  • If the consumer perceives the value being provided by your product to be greater than the price that you have set for it then, you have high pricing power i.e. you can set a new, higher price ceiling for your product.
  • On the other hand if the consumer perceives the value derived from the product to be lesser than the price that you have set for it, then you have lesser pricing power than you assumed and you need to offer more at the same price.
“The single most important decision in evaluating a business is the pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.” ~Warren Buffett


What are the consequences of the advent of the cloud?
There has been a rapid rise in the digital economy over the last few years. Businesses are moving towards the digital platform. Business assets are being monetized in new ways.
  • People are more inclined towards the utilisation rather than the ownership of a product. For example, they would prefer renting a luxury car over a weekend than buying one.
  • Before the advent of cloud, demand was continuous, now it’s becoming more transient to fit the consumers’ needs. Usage is the basis for revenue but customer usage patterns are transient. The businesses then have to come up with more innovative pricing solutions keeping user behaviour in mind.
  • We now live in a subscription based economy, there are over 6 billion potential subscribers on mobile, web, social media etc.The new age customer is better informed and better connected and therefore, more demanding.
  • The new age customer has high expectations; they expect a more personalized approach from the businesses, they expect to derive continuous value from the products, they want great service and they want all this in real time.
 
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Modern Digital Pricing Models
Considering all the changes in the digital marketplace and consumer behaviour, there are multiple strategies that have evolved. There are different pricing models like Trial Pricing, Freemium Pricing, Licensing, Tiered Pricing, Consumption Pricing, Couponing, Discounted Pricing, Loyalty Pricing, Social Pricing, Threshold Pricing, Preferred Customer, Overuse Pricing, Bundling Offers, Early Bird Pricing among others. The different pricing models satisfy different customer needs. Essentially it boils down to personalization, the individuality and the interactivity offered by your product decides it’s usage statistics and following that, the revenue generated.
  1. Tiered Pricing– Pricing is tied to a set of value drivers for the users, and is aimed for scale. This requires longer commitments from customers and their current and future needs are met by moving to higher tiers. On the other hand, the revenues are more predictable for the business and the pricing is much more stable as the customers tend to engage longer.
Any startup adopting this model should keep the following points in mind
  • Keep determining and ranking value drivers via all means
  • Keep experimenting with value drivers as pricing levers
2. Freemium Pricing– Following this model, the business offers some services for free, but a premium is charged for advanced features. This model offers less friction while getting your business started, the customer’s immediate needs are met by the free features and as per the functionality they have to pay for advanced features. Hence, the business is able to acquire a large user base much more easily and quickly and the sales revenue losses are compensated by the savings in the marketing costs.
Freemium pricing model can be based in different formats:
  • Capacity Based- The services are free upto a certain data size or user count.Eg: Dropbox, Google Drive
  • Feature Based- The services are free but with a limited feature set. Full feature access can be unlocked upon payment. Eg: LinkedIn, SurveyMonkey, Skype
  • Time Based- Free trial of all features for a specific period of time, but requires full payment on the completion of a set time period. Eg: WinRar, Adobe Acrobat
  • Usage Based- The services offered are free for certain uses but require payment for other cases. Eg: Businesses that offer free services for personal usage but charge for commercial use.Eg: GMail
To successfully develop a freemium based pricing model, a business has to understand user behaviour; the money it costs the business to serve the customer for free, has to be able to collect quality feedback from their customers.
-The ultimate aim for any company that adopts this model is to convert free users to paid users- so striking a balance on conversion rate is key.
3. Consumption Pricing- The customers manage their consumption of the service to manage their costs. This model grants the customer flexibility in decision making and requires only a limited future commitment. On the other hand, as the revenues fluctuate, there is a possibility of decline in revenue for the businesses. But this model offers positive correlation with users on growth and key metrics and gives the business the ability to reward users with discounts as their usage grows.
4. Licensing- The customers only have to make an upfront one time payment to avail all services however, a recurring fee for ‘support and maintenance’ is often applicable. The customers here need to have a long term commitment to extract full value of the product. This is beneficial for the businesses as this provides them with a solid cash flow system.
It is however important to note that this model is getting fatigued and losing to new age subscription models.


Financial Perspective
  • As traditional income statements are growing more and more obsolete, companies need to adopt a Recurring Income View. This requires them to shift their focus from the product to the consumer. Serve as per the customer’s needs.
  • There are three important aspects of this:
(a) Churn/Retention Rate– The companies need to ask themselves- how much of your annual recurring revenue(ARR) do you get to keep each year?
(b) Recurring Profit Margin– This is annual recurring revenue minus the annualized non-growth expenses your company has, i.e., (entering ARR – COGS – G&A – R&D)/ entering ARR
 (c) Growth Efficiency– This refers to the cost of acquiring new customers, i.e., sales and marketing expense/ new ACV


What can you tell us about eBay’s pricing model?
eBay is a platform for e-commerce, it doesn’t have any pricing models but it does advise the sellers on their business models. eBay has data scientists, product managers who analyze customer behaviour, and compile data based on their browsing habits. eBay focuses on the data acquired to tailor their services as per the customer’s needs and based on what is beneficial for the sellers. In the developing digital marketplace, every business has to understand the consumer behaviour and their usage patterns in order to develop an efficient pricing and business model.


[About the author: Japish Gill is an intern at TiE.]

 

India’s First Truly Smart Electric Scooter

Ather logo

With countless automotive innovations mushrooming in the automobile industry, Ather Energy is one company that is aiming to revolutionize the concept of two-wheeler riding in India.

 

Ather-energy1

Ather Energy is the brainchild of IIT graduates Tarun Mehta & Swapnil Jain and has received funding from Tiger Global and Flipkart founders Sachin & Binny Bansal. In a chat, Tarun Mehta, CEO and Co-founder of Ather, spoke about his time at IIT, where he was associated with various product development teams and was actively involved with the entrepreneurship eco-system. Driven by his core interest towards electric drive, Tarun quit his job at Ashok Leyland to start experimenting on battery packs and reviewing every aspect of vehicle development. By integrating the ideas and recommendations of various engineers, Tarun helped in building the future of Hardware and IoT.

 

THE S340

Setting a new benchmark in automotive technology, Ather Energy has unveiled India’s first smart, electric scooter, the S340.

Key highlights:

  • Touchscreen dashboard with 24*7 connectivity
  • On-board navigation
  • Range of 60 km in single charge
  • 80% charge in one hour
  • Top speed of 72 kmph
  • 15 patent applications filed
  • Manufacturing in Bangalore, Karnataka
  • Online-only sales model
  • Doorstep delivery and service

With an in-house manufacturing unit set up in Bangalore, the S340 will be a great showcase of a product truly made in India, thereby contributing to the Prime Minister’s pet project “Make In India”. Experience centers will bring the product to life and facilitate test rides in the next few months. In an industry first, Ather Energy will build an online-only purchase model with doorstep delivery and service. Pre-ordering will be open in the cities of Bangalore, Chennai and Pune in the next quarter. The company also aims at setting up an ambitious public charging infrastructure in every city it will operate in, in partnership with the government and private enterprises.

Print

Aided by a breakthrough in the in-house designed Lithium-ion battery pack design, the team is gearing up for production of the S340, by the end of the year. The Ather S340 has a touchscreen dashboard connected to the cloud, a host of smart features and offers a top speed of 72 kmph.

The S340 is not just redefining electric vehicles, it is one of the pioneers of smart scooters. The touchscreen dashboard integrates cloud based data to help personalize the consumer ride experience. Features like user profile based sign-in, on board navigation, pre-configured drive modes like sport and economy allow a personalized experience. Its integration with the S340 Mobile App keeps the rider connected with the vehicle, to configure ride and profile preferences and sync navigation routes remotely.

Predictive analytics and aggregation of ride statistics enable customized recommendations. As more vehicles go in-field, aggregate rider and vehicle data will help in customized vehicle updates that will be delivered automatically over the air.

An Automated navigation Interface is to be introduced, along with the electric scooter to help consumers course correct themselves. Acquisition price and maintenance costs are marginalized by utilizing resources, optimally. Says Tarun, “Intelligent vehicles will revolutionize our commute experience in future and we have just begun that journey.”

Ather_Manifesto_updated_0 (1)

At Ather, internal development and vertical integration is emphasized, as vehicle development has a long and complex development cycle. Operational activities such as plan assembling, plan sequence, quality checks, incoming quality, mechanical and financial sourcing are managed by a functional management system. For vehicles of high magnitude of complexity, existence and functioning of an efficient marketing design and vehicle structure team has proven to be essential.

Presently working with about 105 members, one of the adversities faced by the firm is inter-departmental communication. Ather has incorporated an Integration Team that focuses primarily on assembling, test tracking and data visualization through daily team level meet ups.

A wide range of functions at Ather are highly targeted. Hence for sourcing and recruitment of employees, functional skills and organizational fit are assessed with an additional focus of learning on the job.

Ather 4

If not Ather, what else? Tarun states that he is passionate about solar energy and would have studied the workings and intricacies of an external combustion engine. He is also interested in learning and imbibing from companies that have a good vision, game plan and strategy for accelerated growth and impact.

Website: https://www.atherenergy.com/

 

[About the Author: Lasya Krishnan is a second year BCom student of St. Josephs College of Commerce. She is pursuing Chartered Accountancy and is an intern at TiE.]

Hardware Startups Leading the New Wave of Indian manufacturing

In the recent past, the hardware startup revolution has picked up steam and begun to mature. These companies are now gathering the kind of attention previously reserved for their software counterparts. Owing to decreasing cost of prototyping, the entry barrier has been progressively reducing and making it more feasible to develop a physical product within economic constraints. Other favourable ecosystem conditions, like the birth of hardware centric startup accelerators, have marked the beginning of disruption in the Indian manufacturing ecosystem.

revvx

   Satish and Avinash is conversation with Thunder Zhang, founder of NextPCB

 

After six months of product building, market positioning and strategizing, four out of the six hardware startups in the accelerator program, demonstrated their products at the Revvx Demo Day, Batch 1 at the Nasscom 10k Startup Warehouse in Bangalore.

The startup founders not only demonstrated their products but also joined a discussion with early adopters and partners involved in building the products.

Showcasing some of the startups that are a part of the Revvx accelerator program ,

 

  1. Seehow is building cricket coaching system for bowlers. Today’s bowlers do not have access to technology to help track and improve their performance. Most of the practice sessions are ad-hoc and manual. Seehow is building smart cricket balls with sensors to track spin, flight, bounce and speed and provide instant feedback to the cricketer. The system provides performance reports for bowlers as they navigate through their cricketing life and allows to benchmark against the world’s best. The same technology could also be used to track performance in other racquet and ball sports.Dev Chandan and Sid George founded the company last year. They have been part of under 18 club cricket and are intricately familiar with the game. The startup demonstrated a cricket leather ball with integrated sensors. The startup is gearing for production of these cricket balls and currently working with several cricket clubs who are testing the technology.Seehow

    Seehow founder Dev playing with Saurastra Ranji trophy opening bowler Abhishek Bhat

  2. Fragging Monk is an esports game platform startup building game computers for serious gamers. Gaming in India has been growing rapidly in recent years. It is estimated that about 75 million total gamers in India. Less than 10 million participate in esports actively today. Fraggingmonk aims to change that by building very high performance and customizable gaming computers. The startup has helped setup several gaming cafes in India with their platform and devices.

    The company is founded by Vaibhav Shetty and have strong R&D team well versed in building high performance systems. They are also working on a small form factor entry level high performance gaming device focused on competitions.

     

    fraggingmonkFragging Monk founder Vaibhav, setting up a high performance gaming computer

  3. Things Cloud is a clean-tech company building clean, cloud connected power devices. The first offering in this space is solar inverter that, they believe, can actually make a difference and accelerate adoption of solar solutions among the masses. Things Cloud technology gives users the freedom from having to choose between an on-grid or off-grid solution. With their grid-interactive product, users can generate, consume, store or sell the solar energy their panels produce. In addition, machine learning algorithms, coupled with mobile app access enables one to control, monitor and improve your power consumption, generation and storage patterns.

    The startup was founded last year by Amruth Puttappa, an experienced engineer in building clean-tech solutions and have an R&D team very experienced in power controller systems and who have built complex systems before. Things Cloud is currently in trials with one of the largest solar PV panel installers in the state and looking to deploy in the rest of the country this year.

    thingscloudThingsCloud founder Amruth at his lab

  4. Senze from IrisInd is an IoT based technology that aims at making regular objects smart and sort and make sense of the data such objects generate. The startup is implementing this technology in the retail segment giving brands new touch points to interact with consumers. Senze essentially enables businesses to develop smart things using smart paper. A paper like device, an accompanying mobile application and a SaaS platform captures interaction of the consumers with a brand and provides insights to the brand. The system is very customizable, enabling brand owners and marketeers build a new campaign everyday based on the analytics.

    The Cochin based company was founded by Kavi Murugesan, Jose Anthony and friends. They are currently testing the product with various retailers in India.

    senzeSenze team at their lab

 

[Revvx, founded by technology entrepreneur Satish Mugulavalli and Avinash Kaushik, is a Bangalore based hardware accelerator focused on supporting startups building innovative consumer electronics and connected devices. Startups avail of Revvx’s pool of experts to iterate quickly and economically, develop their MVP and prepare to scale rapidly.

Website: www.revvx.com]

Tips for the funding drought: Surviving the day after the money runs out

Just when most of us were dressed for the startup party, it was called off. So here we are, waiting for the party bus, but there is no party tonight, and it might be a long night.

Since entrepreneurs seem to defy reality while starting out, a natural corollary makes accepting reality the toughest part for us. So instead of rallying on, let’s throw an acknowledging glance at the doomsayers this time and get into action.

First, get real. Get the authentic numbers from your Tally and project the P&L for 12 months, assuming no sales growth. Deduct pending payables to calculate how long your cash will last. For loss-making firms, anything less than 12 months of cash is an emergency! Second, cut deep and cut fast.

In most situations, increasing sales that will theoretically lead to profits, is entrepreneurial naivety at best. Sales are not in your control, only costs are. When Printo lost its funding, we reduced salaries by almost 50% above a certain threshold and cut team size by 40%. Founder salaries were brought to zero, giving us moral elbow room to rally the team. Printo shut its multi-city presence focusing on making Bengaluru profitable. This led to a significant drop in revenues but it tripled our cash runway.

We did all this in two weeks, which allowed an additional two weeks’ notice period to the teams. The deeper and swifter the cuts, the faster and more probable the recovery.

Third, find your core. Ask how you can increase prices (or charge for hitherto free services). Printo cofounder and retail head Lalana increased prices by 10% and introduced 100% advance at retail. I was very nervous at first but it gave us clarity on where our value lay and we put our heart into delivering great customer service; everything else was secondary.

2

Fourth, communicate with your team. This is a continuous process but you need that one all hands meet to explain the plan and invite questions and criticism. Also, instead of bracing yourself for disappointed reactions, ask them for help. Entrepreneurs find it impossible to ask help from those they lead but once we do, it’s an empowering tool.

Fifth, fire a few customers. Knowing which customers you should not have is critical. At Printo, we said goodbye to some large brand names who consumed more than just margins and seldom paid on time. The more you sell to such customers, the more money you will need, so let them go for now.

Sixth, engage with stakeholders. Share your recovery plan with investors but emphasise your hunger for growth once you get profitable. Ask for a bridge and even if they negotiate harsh terms, take all the cash you can. The more your investors delay in bridging, the less likely it will happen. Get real as it is very dangerous to keep waiting for the imminent financial infusion. A more sustainable approach is to spend time with customers instead of investors, because customers help you build a real product that will fund itself.

Last, but not least at all, take care of yourself. If you are broke you will find it difficult to focus, especially if family and kids are put at risk. It helps to remember that business is only one dimension of our lives, so balance business obsession with things that matter most — time with friends and family.

 

[Manish Sharma is Co-founder of Printo and Charter Member at TiE Bangalore. He can be followed on Twitter at @mash57]

(Originally published on economictimes.indiatimes.com. To go to the original article click here.)

A Guide to Prototyping and Usability Testing

Prototyping & Usability Testing

I’ve spoken about the importance of user research in a product development cycle in my previous blog. What comes after a solid user research is the phase of prototyping and testing, and these are just as critical as user research. Research, Prototyping and, Usability Testing form the salt and spices of a well balanced dish (yes, we care a lot about food). A dish can be cooked without salt or spice, but you won’t have too many people liking it. The story is very similar in the case of product development too. A product built on assumptions and poor testing will eventually find itself difficult to accommodate the needs of its users and will need more fixing, which translates to a lot of wasted time.

A Wireframe is not a prototype.

While it’s very easy to get confused between a wireframe and a prototype, they’re quite different. A wireframe is a rough visualization of the proof of concept. They are stuff that we sketch on paper or on tools like Balsamiq that gives a rough idea of what an interface looks like. However, the scope of a wireframe ends there. A collection of wireframes that are related to each other and help a user complete a task flow qualifies as a prototype. Mockups are similar to wireframes too, just that their fidelity (level of detail) would be different.

What is prototyping?

Prototyping is a quick an easy way to validate our ideas based on the research information we have. It is a proof of concept and not the actual product itself. And it should not be the actual product. Prototyping is done in the very early stages of ideation to understand what works for users and what doesn’t in order to quickly iterate based on the learnings from these tests. An important thing to note about prototyping is that ‘Prototypes are messy’. And that is how they should be. When thinking of testing, it’s very easy to confuse a prototype for a high-fidelity mockup. They’re two different entities altogether. While usability testing is done on both the interfaces, the purpose and the goals of the testing are very different. With a low fidelity prototype we test if users can figure out their way through the task and reach their goal in the expected way. A high fidelity mockup test would reveal if people can find the right buttons or if they like the colors. Understanding what we’re testing is very important to get the right data.

Image credit: usabilitygeek

Usability Testing:

Usability testing is an amalgamation of art and science. It is more than just watching users complete a task using a prototype or product. The real purpose of conducting a usability testing is not to see if a user can complete the task, but why they’re doing what they’re doing. It’s not a test of the users but of their interaction with the system. If you read the previous sentence clearly, I defined two important facets of design: Interaction Design and Usability Testing. Interaction design is all about creating a dialogue between a user and a system while Usability testing is about understand how the dialogue takes place. While conducting a usability test, it’s all about reading between the lines. While usability testing is a very detailed subject in itself, I will give a quick list of the most important things to consider before and while conducting a usability test.

  • When testing with a low fidelity prototype (a set of wireframes), we should make it clear to the participants that they’re not testing an actual product and it is just a proof of concept built to validate the design decisions. Using the findings of the usability test we would build a high fidelity prototype/mock-up.
  • Recruit wisely. Do not get people who’d be biased and who are involved in the working of the project. Getting unbiased and candid feedback is the most effective way to build a solid Product. Also, do not test with more than 6-8 users per iteration. That’s a good enough number to uncover most usability issues in the prototype.
  • Explain the purpose of the test to the participants clearly. When they know why they’re doing something, they’ll have more ownership on their actions and they’ll be more involved in the test, which will give us better findings.
  • Remind the users that they’re not being tested, but the prototype and whatever they do are not any of their mistakes. This helps them be more candid with their opinion.
  • Always ask participants to ‘think out loud’. Think-out-loud is a beautiful process to understand the psychology of our users. Asking them to speak out what they’re thinking lets us know their thought process which is very important in understanding their mental model.
  • Another thing to remember is that people do not remember instructions very well. They tend to get distracted and veer away from the task or may stop thinking out loud. As moderators, we’ve to be aware of their actions and give subtle reminders to think out loud or take another look at the task list.
  • If they’re completing a specific task, hand them a clear task list that tells them what they’re supposed to achieve. Also, do not be too specific with the tasks. For example, instead of telling ‘Click on the back’ button’, tell ‘do task x’. Let them figure out where to click. Also, having a clear task list will help participants stay on the task and not get distracted and lost in the middle of a task.
  • Before every new task, ask them to read out the task loud. This will keep the task more firmly in their mind.
  • Avoid helping users or giving them leading hints. Telling them ‘Ok you can press that button now’ is a direct hint and when people are testing, they WILL more often than not, click it even if they didn’t want to. As tempting as it is to help people when they seems lost, it’s important to know that they do not get such help when they’re using the product on their own. Let participants explore and figure their way out all the while making notes of what’s going on.
  • If a person cannot find something and asks you what to do next, do not tell them what to do, rather respond back with a question that helps you learn more. For example, when they cannot find a back button to a webpage, get stuck and ask for help, ask them what they’d usually expect in such a scenario, what they want to do and if they were to design the webpage, where they’d put the back button. It’s amazing how many things we think of as obvious are a total mystery to other people. And sometimes people give the best suggestions from their experience.
  • When you find that they’re completely lost and cannot find their way around, give them a couple of minutes to see if they can recover from the error. If they still cannot, give a subtle hint to see if they can find their way from there. If that doesn’t work as well, note that as a major usability issue, ask them what they’d expect and move them to the next task. At any point, Do not make them feel like they’re dumb.
  • It’s very important to constantly ask them to explain their actions and decisions. But their explanations must be taken with a pinch of salt. There is a difference between what people do and what they tell. This is why every usability test must have a well triangulated recording process. Usually usability tests will have a moderator, a note taker, screen and audio/video recording tools to correlate data.
  • Give close attention to their expressions. People are usually quite expressive and usually give out subtle feedback using non-verbal hints. For example a soft ‘hmmmm!’ to express surprise or a quick ‘oh shit!’ are all very important hints that something they didn’t expect happened. It’s important to note these moments and ask them with a follow-up question ‘please tell me why you said ‘oh shit!’.
  • The purpose of a usability test is not always to find faults in a system. If they like something, it is just as important to ask them why they liked it. Even if they do not tell, as moderators, we must make sure to find out the positives of the design. Knowing what worked will give designers a direction to go forward and iterate the design.
  • Start and end the usability test with a short interview. Before the test ask users about their experience using similar products, their frustrations, likes and their expectations. End it by asking their experience using the prototype, what they liked or disliked about it, what was most challenging and what they’d change if they could. Understanding their thought process is the goal of a usability test.

Knowing these points above is very important for a successful prototype design and testing. While it appears simple, its quite hard to stay focused while creating prototypes and testing with users. It’s very easy to slip into the user mentality and when we lose focus, we end up losing a lot of data and waste considerable amount of time both for us and the participants.

Prototyping and Usability studies are the equivalent to a physical structure’s foundation. While it may take some extra time and effort, going through these processes gives a product a very solid backbone which can later be used to build upon during successive iterations. This avoids the problem of building a product and later discovering it doesn’t work for its user. This is the reason why companies like Facebook, Google and Twitter put such heavy emphasis on research and design. They understand their users’ needs, goals and frustrations before designing a product and that’s what makes a cult-following billion dollar product.

(Image credit: www.usabilitygeek.com)

 

[Setumadhava Kathavate is Co-founder and the Chief Designer at Eventosaur. His interests include all things tech, design, fitness, improv, and storytelling. He can be followed on Twitter at @setumad]

(Originally published on Eventosaur.com. To go to the original article click here.)

How to launch your edtech startup: tips and roadmaps from StartEdu 2016

The education space in India attracted an estimated 40 investments across deal sizes and stages in 2015, and continues to draw a wide range of creative minds and committed entrepreneurs. To promote more such initiatives, experts from edtech advisory firm Sylvant and investors from Unitus Seed Fund offered useful tips on market assessment, product-market fit strategies and pitching techniques to two dozen startups at the Bengaluru edition of StartEdu 2016 (see my earlier coverage of the first and second EduThon 2015 events).

http://yourstory.com/2016/05/uttar-pradesh-startup-policy-government/

StartEdu 2016

A joint initiative by Unitus Seed Fund and Sylvant, StartEdu is a nationwide programme to identify, incubate and invest in early-stage education and edtech startups. Launched in December 2014, the initiative has had three editions with participation from over 250 Indian companies.

Past winners include LabInApp, an edtech startup for secondary school science learning through 3D virtual graphics. LabInApp, based in Hubli, also received a seed-round investment from Unitus.

The fourth edition of StartEdu includes two-day bootcamps in five cities across India, from which 20 companies will be handpicked. They will get access to mentorship on growth strategies from industry players such as S.Chand Publishers, Pearson Affordable Learning Fund and Integra. The final winners can also pitch for seed-round investments from Unitus of up to Rs 3 crore.

The first bootcamp of 2016, held in Hyderabad in May, saw over 30 participating startups, and another two dozen signed up for the Bengaluru edition (with TiE Bangalore as a partner). The bootcamp was structured around questions of problem definition, solutioning and scaling, along with talks, experience sharing sessions, peer learning through group discussions, and personal reflections.

The Bengaluru participants included startups from the K-12, higher education, vocational training and corporate training sectors. Their offerings include personalised assessments, VR content, parent engagement, gamification, soft skills development, digital libraries, student networking, test preparation, procurement marketplaces, learning analytics, language tools, internship location, and real-time scenario engagement.

Unit-Economics

Assessment and actions: 10 key questions

Unitus and Sylvant offer the following key clusters of questions that all startups need to address, to assess how well they are prepared for the roller-coaster ride of edtech entrepreneurship. Interestingly, many startups feel that ‘all is well’ before they look at these questions, but poring through them in detail may discourage some of them. The answer lies in between – the passion should certainly be nurtured, but also tempered with realistic assessment.

  1. Problem identification: The first step for aspiring ‘edupreneurs’ is to clearly identify the problem they are trying to solve. How big is it? Who does it affect the most? Founders need to immerse in the problem and show that they really understand it, along with the challenges and opportunities.
  1. Consumer vs. customer: The customer is the person or organisation who will pay for your product/service – but who is the end-user? How will they benefit from your solution? Founders need to develop an empathy with the end-user and connect with their aspirations and needs – these users could be students, teachers, or even parents.
  1. Stakeholder mapping: In addition to user, consumer and customer, who are the other influencers in the picture? This involves broader ecosystem mapping to better understand the product-research and decision-making cycles for the stakeholders, for example, the role of school trustees and textbook publishers.
  1. Reaching influencers: How will you reach the influencers? What contacts do you have, eg. through alumni networks, industry associations, and tuition centres? This will call for extensive networking with the broader players in the ecosystem.
  1. Market insights: How will you go beyond personal anecdotes to real market insights? How are you making sure that the assumptions for the target domain are valid and are not force-fitted from another sector? This calls for primary and secondary research, and should go beyond scraping the web for generic market research reports, for example, with data sets gathered from surveys (some of which can be outsourced).
  1. Market size: What quantitative measures do you have for market size? What are the qualitative factors underlying these market dynamics? What are your estimates for TAM (Total Addressable Market), SAM (Segmented Addressable Market), and SOM (Serviceable Obtainable Market)? This should help estimate early-stage and scale-stage scope for the startup.
  1. Competitive positioning: Who are your direct competitors today? As markets and regulation change, who could be your indirect and direct competitors tomorrow? It seems common for many founders to say that they have no competitors, when actually other players could easily extend into this space – hence the importance of a ‘moat’ strategy.
  1. Solution assessment: How do you know your proposed solution solves the problem? How does your solution differ from others? Is it nice to have, important, or critical for your stakeholders? Founders should have a clear understanding of how they would improve the existing solution, for example, based on the needs of private schools or BoP (bottom of the pyramid) schools.
  1. Unit economics: What are your pricing and financing models? What are the direct and indirect revenue streams? How do they balance out with your cost structure in terms of development, delivery and marketing? These issues are even more important given the current ‘belt tightening’ phase in the Indian startup ecosystem.
  1. Scaling: How will you expand in terms of customer base, revenues, products, profits, headcount and geographic presence? What drive and strategy will your leadership bring to the table? Who are your partners in this scale stage, and what’s in it for them? This is the proverbial ‘wall’ that many edtech startups hit after roping in their first dozen or so institutional customers.

Critical-Success-Factors-fo

At the bootcamp, identification of the problem and the customer turned out to be the simplest and the most profound question that most entrepreneurs struggled to answer, according to Gaurav Singh, Co-founder of Sylvant. This is because of multiple stakeholders involved in key decisions of the sales process in the education sector. “In our view, we believe that if this question is comprehensively addressed, it sets the foundation for solutions and scale,” said Gaurav.

It is important for founders to always stay focussed on the problem they are trying to solve, and not get wedded to ‘the perfect solution’ since the needs and technologies may change, according to Madan Padaki, Co-founder of Head Held High Foundation.

Despite tough challenges, the bootcamp participants demonstrated their passion for building education companies and bringing in business validation, said Srikrishna Ramamoorthy, partner at Unitus Seed Fund. Full details of the winning startups will be revealed after the five-city series of bootcamps is completed. The next meetups will be held in Chennai, Mumbai and Delhi in June.

Some of the market issues discussed above can be handled by bootstrapped startups, but rapid launch and scale may require the support of investors who make their evaluations based on a range of success factors. Enter the startup pitch and storytelling techniques – more on that in our next article on StartEdu 2016.

StartEdu-2016

 

[Madanmohan Rao is research director at YourStory Media and editor of a five book series (http://amzn.to/NpHAoE). His interests include creativity, innovation, knowledge management, and digital media. Madan is also a DJ and writer on world music and jazz. He can be followed on Twitter at @MadanRao]

(Originally published on Yourstory.com. To go to the original article click here.)