Why the Next Frontier of Competition is not Products, but is Business Models?

 

What is innovation? Scholars and doers lament that innovation is about putting an idea to application, or say commercialization. Does the idea have to be original? Not necessarily. Right from the creation of the first relational database management system to recent advent of 3D printing, history is replete with instances where the inventors haven’t been the first ones to commercialize, let alone earn profits from their creations. It is not so much about generating an idea or even making a prototype, but the ability to put across a concept in a compelling manner. The ill-fated Xerox PARC, the one lab responsible for some of computer science’s biggest ‘inventions’, is a case in point on how a good idea is just the beginning.

A business model in its essence depicts the manner in which value is offered to a customer and money is garnered by the firm. The same technology can be presented as different offerings based on the business model some firm chooses to pursue. Thinking of innovation in terms of product alone, or the underlying technology, is a very narrow view, the one that often harms innovation. For instance, look at the market for second hand-cars, the classic ‘market of lemons’. There are several ways in which cars could be sold- nearby used-car dealers, organized online marketplace (such as OLX or CarDekho), or even you have organized players, like Maruti TrueValue coming in the fray. Each of these models is different, in terms of how customers reach out to them, the two sides of the market, physical or online presence, and even margins, but ultimately, they are all selling cars. Albeit, some are more profitable than others.

Even in the low-tech space, the construction industry has gotten revolutionized with the advent of portable concrete mixers, modular housing, flexible payment schemes, and multi-purpose outlets, amongst others. A truck mounted concrete mixer has replaced those sacks of concrete and the associated handing cost and mess. Similarly, truck mounted DG sets have alleviated the power backup problem at most outdoor or, even, in-door events. Several such instances only fortify the idea that innovation can indeed be low-tech in its nature.

What does this insight leave the budding entrepreneur with? Two takeaways.

Firstly, the competition is no longer ‘on’ products, but rather is ‘around’ products, much in terms of pricing models, channels, inventory schemes, cost structures, and payment options, amongst others. So, even if you are late to a market, or imitate a technology, you can still corner a significant market share by adopting a different business model.

Secondly, innovation need not always be hi-tech, or even tech. A new way of thinking about the target customers, customer engagements, partner incentives, cost structures, and even value proposition, does not always call for hi-tech venturing.

To sum up, the competition is increasingly shifting from products to business models, and that offers tremendous opportunities to budding entrepreneurs.

 

[About the Author: Pavan Soni is an Innovation Evangelist by profession and a teacher by passion. He has consulted with leading organizations on innovation and creativity. He has also been invited thrice to speak at TEDx. Currently, Pavan is pursuing his Doctoral Studies from IIM Bangalore in the domain of innovation management. More on his work is available at www.pavansoni.com. He can be followed on twitter at @pavan_soni]

Idea Validation: 20 Startup Tips from the TiE Bangalore Mentor Clinic

What are the different stages of validation in a startup founder’s journey? How do they get to the scale stage and cultivate industry contacts? What metrics do they need to understand while they pivot? How should they choose between product and service, between B2B and B2C offerings? Is entrepreneurship a ‘full-time’ journey? And how should all these questions be answered without getting stuck in ‘analysis paralaysis?’

Three dozen startups discussed a wide range of entrepreneurship issues with a panel of four experts at a recent TiE Bangalore Mentor Clinic: Parag Dhol, MD of Inventus CapitalSuryanarayanan A., Head of Incubation Services at BHive Workspace; Mukul AgrawalCo-founder and CEO of eTutorWorld; and Suryaprakash Konanuru, CTO, IdeaSpring Capital.

The founders came from a wide range of sectors: telecom, travel, healthcare, finance, media, fashion, games, furniture, and jewellery. Here are my Top 20 takeaways from the discussion which I facilitated; see also YourStory’s earlier coverage of TiE Bangalore’s fintech showcase, StartEdu initiative, SMAC Day, IoTNext startup showcase, and pitch tips for founders.

  1. Start off with a clear niche
    Instead of offering something for the whole world, it may be easier to start with one customer segment and then grow from there. For example, while it may be tempting to address bakery needs of the mass market, it may actually be easier to begin with functional foods, eg. diabetics who have specific food requirements that they will stick to for a long time, and not in a fickle manner. Start small and keep it simple; work on future phases later.

  2. Identify the problem
    Interestingly, when founders are asked to describe their offering, they come up with a list of features. Instead, they should be explaining what problems they are addressing and solving. The first step of validation is at the problem level, followed by customer and product. Many founders have apparent fixes looking for problems, rather than approaching it the other way round. Is the problem real, or is it only in your head? Who else thinks the problem exists?

  3. Find the paying customer
    Too many startups think they must begin with finding investors to fund product development. But more legwork should be done in assessing the market, interviewing potential customers, finding price points in the target domain and related sectors, and identifying intent to pay.

  4. Go beyond friends and family for validation
    Ironically, friends and family may not be the best people to validate your idea – they tend to support whatever you do, and may not give you direct feedback that may discourage you if your idea is infeasible.

  5. Entrepreneurship is different from other employment
    Entrepreneurship is about passion – it’s not just another job. The passion will drive the founder to learn more about the domain, identify problems to solve, and cultivate the ecosystem to solve it. If the relentless passion is missing, it may be easier to be a regular employee of a company.




  6. Nothing communicates like a demo
    An MVP, demo, mockup, video or dummy screenshot goes a long way in convincing customers of what your value proposition is for a product or service. Mere descriptions may not get the message across, especially if the product is relatively new and unfamiliar. It is important to crystallise such potential customer connects.

  7. MVP v/s Quality product
    Don’t agonise over getting the perfect product out right at the beginning; it should be at least 80 percent good enough for the pre-launch stages. It should possess must-have features to solve the problem; the nice-to-have features can come later.

  8. Product or service?
    The lines between product and service can blur in some cases. In these situations, the startup should have separate SBUs for product and service, but not try to do both at the same time with the same team. These distinctions can arise at multiple stages of a company’s growth, and lead to multiple types of business models.

  9. B2C or B2B?
    It may be tempting to be seduced by the successes of consumer internet startups, with their stories of scale and growth. Sometimes, a B2B approach may reveal new useful insights into feasible customer segments, effective channels, and long-term partnerships. Be sure to assess both approaches – and maybe even plan for separate strategies at later stages.

  10. Understand the world of the investor
    Investors are of different types, and it is important for startups to spend some time researching their varying priorities and pressures. For example, angels may be useful at the pre-product stages, but VCs may be interested only when there is some monetisation beginning to happen.

  11. Hires and interns
    Write down clear job descriptions of tasks and roles before you hire someone; many founders do not practise this with precision. Interns are a good option as well. But hiring takes time, energy and effort, right from interviews to training, and these must be factored in. Many founders do not pay enough attention to building the right culture in their startups from Day One.

  12. Ethics
    Rule of law, ethics and accountability should be part of the startup DNA. For example, in marketplace models, it is important to be clear about whose interests come first – the end customer or business service providers.



     

  13. Distinguish between user, customer and consumer
    Not all users are customers (eg. those who use Facebook and Twitter), and the person who is paying for your product or service may actually be giving it to someone else to use. These seemingly simple distinctions can actually trip up many a business plan in the early stages.

  14. Learn from super users
    Customers, especially early adopters and outliers, can be your best source of learning. In the race to keep acquiring customers, founders tend to treat customers as just numbers. They should be regarded as sources of deep insights and even partners in co-creation. Missionary zeal should not be a substitute for customer connect.

  15. Ask and you shall receive
    Thanks to the internet, social media and proliferation of events, it is easier than ever to reach out to potential mentors and contacts. Many of them would be quite happy to assist aspiring startups formally or informally – it is up to the founder to take the initiative and build rapport. YourStory has published a wide range of success stories and even failed ventures; the founders are good sources of first-hand insights.

  16. Online resources
    Many online tools and checklists are available for startups to test and explore their ideas. These include Lean Startup, Business Model Canvas, Business Plan Archive, Consumer Trend Canvas, Design Thinking, and the YourStory Changemaker Story Canvas. They serve as useful tools to structure one’s thinking, segment the business space, prioritise activities, brainstorm collectively, and assess growth feasibility.

  17. The MBA myth
    Many founders (especially techies) tend to believe that without an MBA you cannot launch a startup. Actually, MBAs tend to over-analyse things, the panellists jokingly explained. Outsiders have less baggage and can pick up these business insights later. MBAs may be useful in later scale stages only.

  18. Location, timing, context
    Sometimes the local market may not yet be ready for your product, and the opportunity may be elsewhere. You may be a bit too early for the market with your idea. Or even worse, government regulations may not be right for introducing your disruptive ideas. Be sure to assess the feasibility of location, timing and context before you step too far into the game. A good example is the ongoing tussle between car-sharing apps and the government on the legality of car-pooling.

  19. So what if you are an introvert?
    Techie founders in particular may be introverted in nature; however this should not come in the way of picking up business skills. There are many online courses one can take on topics like sales and accounting, or from business schools. Another option is to find a business-oriented co-founder who is better at media activities and networking.
  20.  

  21. Do your homework!
    None of the above is really rocket science – but why is it that startups keep bringing these issues up again and again in every forum? Because founders don’t do their homework, the panellists remarked – many founders think they have come up with unique products, when a simple Google search will reveal that there are dozens of other similar products and problems!

 

TiE Bangalore is organising more such interactive sessions to connect aspiring entrepreneurs with domain experts and successful businesses. A lot of useful networking happens among entrepreneurs as well at these sessions, leading to mutual bonding, validation and reinforcement of ideas – and sometimes even opportunities to pool resources together. We look forward to future mentor clinics on team building, company culture, legal contracts and fundraising!

 

[Madanmohan Rao is a TiE Bangalore Charter Member, 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.)

New Governing Body for TiE Bangalore Chapter

In addition to the satisfaction of giving back to the next generation of entrepreneurs, Charter Members at TiE also benefit from networking with each other. TiE Bangalore was delighted to host an exclusive TiE Charter Member Mixer on 19th January where Charter Members networked, exchanged notes and hobnobbed with among themselves.

The ambience was perfect to introduce the change in leadership at TiE Bangalore with Ravi Gururaj as President, Natarajan R. as Secretary and Parag Dhol as Treasurer. “The Governing Body plays an integral role in the functioning of TiE Bangalore. The rich experience and expertise of the Governing Body along with all the Charter Members, comprising investors, serial entrepreneurs, top corporate executives and consultants, will light the path for activities and initiatives to foster entrepreneurship,” reflected Kunal Kashyap, Executive Director, TiE Bangalore.

The elected members of the new Governing Body are Ravi Gururaj (QikPod), Natarajan R. (RNT Capital Advisers), Parag Dhol (Inventus Capital Partners), Ganapathy Venugopal (Axilor Ventures), Jawahar Bekay (Tao Automation & CaptiveAide), Karthik Krishnan Mahalingam (Shardul Amarchand Mangaldas), Madan Padaki (RubanBridge & Sylvant Advisors), Sanjay Anandaram (Seed Fund), Suresh Narasimha (CoCreate Ventures), Suryanarayanan A. (Independent Consultant), T.R. Anand (T R Anand Consultants) and Venkatesh Kumaran (IESA). In addition to the elected members, the board has also co-opted Charter Members Arvind Tiwary (Chair- IoT Forum, TiE Bangalore), Anjana Vivek (VentureBean Consulting), Sharda Balaji (NovoJuris Legal) and Bharati Jacob (Seed Fund) as special invitees to the governing body to drive key initiatives on IoT, women entrepreneurship and mentoring.

 

Naganand Doraswamy, the outgoing president, leaves behind a legacy of exemplary work. The mixer served as a befitting farewell, commemorating his efforts over the last four years. The sessions conducted by TiE Bangalore have evolved with the focus shifting to providing a platform for startups to grow and realize their dreams, through initiatives such as Startup Showcase, Founders’ Forum, Mentoring Sessions, Legal Clinics and many others. TiE Bangalore also works with the Government of Karnataka for policy advocacy in matters related to starting up. In 2015, TiE LeapFrog, a marquee conference setting the trend for visioning the future and enabling next generation activities, saw an audience of over 650 delegates enthralled by global leaders across verticals- retail, fintech and healthcare. We also pioneered innovation and encouragement at the zeroth stage of entrepreneurship, i.e. ideation, through our flagship mentoring program, Anthah:Prerana. Currently in its 4th edition, Anthah:Prerana has mentored over 30 startups so far, with 6 of them having raised investment.

President-elect Ravi Gururaj conveyed that TiE Bangalore will put its best foot forward to foster entrepreneurship via existing vertical forums such as Retail, IoT and Education which have gained momentum and build new initiatives to help nurture forums in Women Entrepreneurship, Healthcare and others that members deem important. TiE Bangalore is well positioned through its broad network of Charter Members to support non-tech and services startups and will seek to assist ventures that can be self-sustaining and chose to bootstrap with minimal external capital infusion. TiE Bangalore will support the State government by providing inputs on startup policies and mentorship to entrepreneurial programs.

TiE Bangalore looks forward to collaborating with TiE Global, the other TiE Chapters and all the startup ecosystem players in Bangalore to build TiE as an umbrella institution supporting the cause of entrepreneurship by conducting knowledge sessions, mentoring programs and aiding the growth and maturation of startups and entrepreneurs.

Software As An Instrument Of Soft Power

SNAPSHOT

India with its legacy, capability, capacity and brand recognition is uniquely placed to become a software power; new thinking and a new approach are required to capture this unique opportunity.

“When one country gets other countries to want what it wants – might be called co-optive or soft power in contrast with the hard or command power of ordering others to do what it wants. Soft power lies in a country’s attractiveness and comes from three resources: its culture (in places where it is attractive to others), its political values (when it lives up to them at home and abroad), and its foreign policies (when they are seen as legitimate and having moral authority).” – Joseph Nye, Harvard Political Scientist in “Bound to Lead: The Changing Nature of American Power (1990)

India has appreciable soft power from spiritual philosophies to Bollywood movies to food to yoga to cultural imprints in South East Asia. Not to forget India as the clichéd “world’s largest democracy”, democratic institutions and pluralistic society. Or does it? The 2015 “The Soft Power 30” a global ranking of soft power by ComResGlobal doesn’t seem to think so – India isn’t in the top 30 countries with soft power.

India’s traditional levers of soft power haven’t translated into actionable foreign policy that have generated impactful political-economic leverage for India. For example, 15 million foreign tourists visited tiny Singapore in 2015 compared to about 8 million to India. It is all very well for the UN to celebrate 21 June as World Yoga Day but the US is the leading yoga market in the world with over $27 billion in sales of yoga products with over 36 million practitioners.

So what can be done if the traditional sources of soft power aren’t generating the desired results? It is time to deploy newer sources of soft power! Since 2014, a newly assertive and confident India has championed a foreign policy focused on securing India’s place at the table of world powers. In the 21st century where knowledge and technology are expected to play a major role in shaping the destinies of countries, India can and should play a major role. If there’s one industry where India and Indians are globally recognised, respected and regarded, it is the IT/software industry. Software is embedded into every single activity – healthcare, education, financial services, travel, entertainment and manufacturing – and this trend will only increase.

Indians are at the helm of affairs at global technology companies like Google and Facebook, and are among the most regarded entrepreneurs and investors in Silicon Valley and elsewhere. Large numbers of young educated, aware, aspirational Indians are employed in the Indian IT industry, they are exposed to global customers and practices; the Indian system can generate, indeed is, generating many more trained and deployable high-quality technical and managerial talent. Indian software start-ups and entrepreneurs are rapidly emerging and beginning to make their mark globally. The reduced costs of technology, of marketing, of deploying solutions, of providing customer support, all directly from India are all highly advantageous to Indian companies. Software is a very high value-added product too with relatively low investment. In every other industry, India is the world’s top exporter of primary goods such as rice, beef, precious stones and even hair but not the one who captures the real end-product value. And software is very environment-friendly! China will find it hard to emulate what India has achieved and can achieve in software.

So, can India use its renowned prowess in software to influence foreign policy gainfully?

Indeed it can! Here are three strategies that need to be interwoven into India’s foreign policy thrust:

  1. Advocacy: An impoverished India in the 1950s championed the Non-Aligned Movement (NAM) that got various “Third World” countries together to be equidistant from the USSR and the USA, the two super powers of the time. Never mind that the only two countries that were genuinely non-aligned were the two super powers themselves! India in the 21st century can regain its position as the leader of emerging economies by advocating a “Digital NAM” aka Net-Neutrality. This would be legitimately and morally authoritative coming from India. With the leading global technology players being locked out of China, India and other emerging markets are the subject of their affections. Here’s an opportunity for India to seize and lead from the front.
  2. “Governance for hire”: India is the only country in the world that has built, ground up, the incredible “India Stack”: a set of software modules, interfaces governance mechanisms, security, legal and business workflows, and audit processes that allow people to participate in any service from anywhere, digitally pay for the services consumed, exchange documents digitally, and a private data store where data can be stored, shared, with consent. Digital India is being built on this platform as the below illustration shows.
    This public good (yes!), has been built due to the efforts of some of the most talented and qualified people in the world. Non-profit advocacy groups like iSpirt are playing a stellar role in educating and transforming thinking in the corridors of power. And owned entirely by India. The scale, complexity, deployment scenarios, ease of use, security and various other parameters are unparalleled anywhere in the world. Now, what if India were to offer this entire stack to countries in say, Africa, Middle East, Central, South and South East Asia and help them run their governance for their people? How powerful would that be?
    No different from say, the US doing a technology transfer, licensing, training and sharing arrangement with India.
  3. Software as part of trade deals: India through ITEC helps a large number of countries in Asia and Africa. Education, engineering and infrastructure services are major areas of investment. There’s no reason why software cannot be a part of this programme. Indian software products – from healthcare to financial services to customer support to retail to supply chain management to education – can and should be part of bilateral and regional trade deals. Indian companies can train, deploy, and support other countries offer better services to their citizens with Indian software.

India with its legacy, capability, capacity and brand recognition is uniquely placed to become a software power; new thinking and a new approach are required to capture this unique opportunity. India has the moral and legitimate authority to lead this initiative for the entire emerging world. India has been a soft power. It is time to become a software power.

 

[Sanjay Anandaram is a passionate advocate of entrepreneurship in India. He brings close to three decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He is the co-founder of JumpStartUp, one of India’s earliest US-India crossborder VC funds, and has been involved with companies like redBus (acquired by Ibibo group) and Instahealth (acquired by Practo). Sanjay is a Charter Member at TiE Bangalore.]

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

Social Enterprises and Impact Metrics: 7 Startups, 7 Tips

Social enterprises have an even tougher challenge than startups that are focused largely on the tech or business sector. These range from partnerships and mentoring to business models and talent sourcing.

1

TiE Bangalore recently organised the Startup Showcase on Social Impact at NUMA Bengaluru, anchored by Villgro. Along with pitches by seven social enterprises, the event included discussion and tips by an expert panel of jurors: Madan Padaki, Founder of Head Held High Foundation; Aruna Raman, India Programme Director at Acara; Ananth Aravamudan, Senior Advisor, Villgro; Raju Bhatnagar, Secretary General at Bangalore Chamber of Industry and Commerce; and Sneha Rajan, Senior Associate, Unitus Seed Fund.

Seven startups pitched to the jury, followed by a discussion with the experts and audience. Attendees could offer their own assessments and comments through a Crowd Product app. Tips offered by the jurors in the concluding session covered pitch strategies, team composition, go-to-market approaches, and scaling techniques.

Chasing Sun is a platform that allows Indian artisans to access global markets. The domestic market for art, handicrafts, and handlooms is estimated at $7 billion. The platform currently includes micro-sites for 170 artists, 20 artisans, and 55 weaver societies, and offers certification services to ensure quality and trust.

Alma Nourisher addresses child nutrition problems at the pre-school stage and helps parents and teachers flag irregular height, weight, and eating habits. Such preventive programmes can help with nutrition for child improvement. The social enterprise offers guidance, analytics, and knowledge resources for a fee of Rs. 300 per child per year.

ShanMukha Innovations, incubated at IISc, has developed a portable solution for detecting contaminants in milk. The palm-sized box uses microfluidic nanotechnology to identify contaminants such as melamine. The device reportedly costs less than Rs. 2,500, and each test costs less than Rs. 2. The biggest markets for such milk quality testing devices are India, China, and the US.

The Green Salute offers waterless, affordable car cleaning solutions delivered via micro-entrepreneurs to consumer homes and offices. India wastes an estimated 160 billion litres of water a year on car washing; Green Salute uses chemicals which can be applied and scraped off without using water.

Budli.in is a ‘reverse commerce’ site for used gadgets — it buys back smartphones, tablets, and laptops, and then refurbishes them for subsequent sale. India is the world’s fastest growing smartphone market, and each device goes through an average of three consumer purchases in its lifecycle. Channel partners include Amazon and Flipkart. For every product sold, a portion of revenue is donated to charities such as CRY and Give India.

Superheroes Incorporated offers training for youth in life and vocational career skills. Only about 2.3 percent of Indians are estimated to have formal skills training; they also need further help with job placement and career guidance.

Farms2Fork offers farmers water monitoring solutions for better productivity by using less water. The solution includes IoT wireless soil sensors, AI support, and real-time analytics. While earlier agri-tech solutions were based on batch processing of data, Farms2Fork operates on real-time data. For outreach and services, farmers are contacted via farmer associations and networks.

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Startup pitch

The seven pitches were followed by an insightful panel discussion, with jury experts offering tips on how social entrepreneurs can successfully navigate the ups and downs of their startup journeys (see also The startup question bank: 40 key questions for founders).

  1. Customer immersion
    Ideas and passion are great but social enterprises need a clear problem orientation also. Founders should immerse themselves in audience lives, especially in times of rapid change. On-the-ground realities in emerging economies are shifting rapidly, and founders should have a pulse on effective trends and aspirations. Disciplines like design thinking offer useful and actionable frameworks here.
  2. Success metrics
    Metrics should be holistic and include activity, business, and social impacts. There should be one or two key success metrics for primary focus, and the rest should be supporting or complementary metrics. This helps founders monitor their progress and assists investors in assessing the long-term viability of the venture.
  3. Well-rounded team
    Founders should build a well-rounded team, with a mix of engineering, design, and social science backgrounds. Sometimes founders get too carried away with the technology; having a holistic mix in the core team will help contextualise the offerings, use and impact.
  4. Ambition
    ‘Small is beautiful’ seems to be a common attitude in social entrepreneur and NGO circles, but it also helps to be ambitious (investors like that!). The magnitude of India’s social problems calls for bold and ambitious innovators as well to tackle the challenges at scale. (See also my review of the book Scaling up Business Solutions to Social Problems.)
  5. Partnerships
    Partnership strategies for social entrepreneurs can be even more complex than those for startups who have a largely tech or business focus. The social cost of failure is high for social enterprises (as compared to merely pivoting an app design); hence collaborative partnerships are important.
    Social entrepreneurs should learn how to work with partners who are not social enterprises. They should be clear about their offerings, values, and philosophy. Partnerships are an art and a science. Partners should be picked carefully, and the relationship should evolve over time.
  6. An effective pitch
    Founders will frequently need to pitch to funders, investors, partners, regulators, customers, and employees. Pitch times are usually short, from three to 10 minutes, so founders should not spend too much time on the context, but describe the problem and who faces it.
    The pitch should focus less on product features and more on problem resolution. Techniques like storytelling are effective here. (See also How to make a great startup pitch: slides from 20 TiE Bangalore finalists.)
  7. Risk management
    Founders should enumerate the range of risks involved, eg. regulatory and lack of ecosystem trust. Secondary impacts should also be assessed, since some risks are more indirect or diffuse than others.

TiE Bangalore plans to come up with more such thematic knowledge sharing events for social entrepreneurs, along with other clusters such as education, fin-tech and mobile.

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Startup Jury Panel

 

[Madanmohan Rao is a TiE Bangalore Charter Member, 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.)

“We are not a Startup…”

Lessons from my Entrepreneurial Journey #13

shashi-blog-13

The other day at an event a gentleman asked, “What does your startup do?” “We are not a startup anymore. We are a 4+ year old company, focused on healthcare software,” I quipped back, as we exchanged our visiting cards. That took him by surprise, as he was wondering why I am steering away from the word  “Startup”, when it’s considered so cool to call yourself one.

The definition of a startup, as per Steve Blank – who is considered the pioneer of Customer Development methodology, a bible for startups – is “A startup is a temporary organization in search of a scalable, repeatable and profitable business model”. It is conducting experiments to get this right very fast.

So once you get it, you should not call yourself a startup anymore.

A human being runs through various phases of his/her life with different labels – a new born, a baby, toddler, boy, teenager, adult, senior citizen – You wouldn’t call yourself a baby when you are a 4 – 5 years old.

So I have sometimes wondered why this affinity amongst entrepreneurs to call themselves a startup for as long as possible.  Some of them have products, business models and raised massive funding – but still tag themselves as startups.

Is it because:

  • The word denotes that we are attempting to do something that no one has done before & it’s considered cool to run a startup or join a startup.
  • The word conjures up entrepreneurship. Messages like “Startup.. It’s never too late” may make you feel that you are missing something in life if you haven’t “done” a startup.

In my view, the word startup sends a lot of uncomfortable messages subtly to various stakeholders.

Customer perspective:

  • Hmm..so you are new. It means your products are untested…
  • You are a young company and not seen the challenges yet. We do not know if you will be around long enough if we buy your products/services.

Employee perspective:

  • I have heard that startup X folded up last month. Is my startup too similar? I am not sure.
  • Will I have a long term career? What if our investors pull out?

Coming back to our story, we took a call not to call ourselves a startup when HealthMacro turned 3 in October 2015. When you are a 1 – 2 year old, it’s acceptable to call yourself a startup.

“We had a market fit product, a relatively large addressable market, paying customers and a business model. We only needed to scale”. So why call yourself a startup was the thought process we had.

We believed that if we called ourselves a startup even after 3 years of existence, we may end up doing silly things to fit into the mould of what a startup should do that could seriously jeopardize our growth.

I put together a comparative list of what a Startup Vs a Growth Stage company does:

 Early Stage Startup (0-3 years)Growth Stage Company (3 years + )
1Competes in startup events & attempts to win awards.Participates in Industry trade events marketing its products.
2Showcases its startup awards won & media coverage received.Highlights its key customers, references and testimonials.
3In search of the right paying customer & business model.Has a clear business model, target segment & customer profile.
4Depends on few early customers.De-risks its dependence on few customers.
5Woos customers with discount and other freemium models.Clear value proposition. If this customer says no, move on to the next customer quickly.
6Anyone interested can join. Will check fitment later.Hires with a clear Job Description, with a strong interview process.
7Informal Performance Reviews.Formal Performance Reviews.
8Competes with other startups.Competes with companies bigger than itself and works to beat them.
9Seeks informal feedback from customer on product and service.Monitors every customer touch point to experience the “moment of truth” for the customer.
10Focuses on Vanity Metrics & Social Media.Focuses on proposals sent, invoices raised.
11Seeks Funding.Raises seed funding and runs with it frugally to have a long runway to take off without another round of funding.
12Mindset: Let’s get the product out and generate early revenues.Focus: On predictable revenues month on month. Attempts to get to break even and profitability faster.
13Spend on marketing & ads.Word of mouth referrals.
14A very flexible culture.Work culture balancing Company Results & Employee benefits.
15Has assumptions on problem definition and customer mindset.Has strong understanding of Industry value chain and customer pain points.

We have gone through all the phases outlined in the “what early stage startup does” table.

Now at the 4+ year mark, we regularly check against this list to validate which bucket we are operating from & correct ourselves if our mindset is still that of an early stage startup.

We are working very hard & smart to scale up and get to profitability fast…as “We are not a Startup…”

 

This is the thirteenth 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 Startup Showcase: New Frontiers in FinTech

Financial Technology or FinTech, is a booming industry right now, with investment flooding into companies reinventing the way we do payments, lending, investing and more. Valuations in this sector are also burgeoning, as more money floods in. Many companies are now reaching the fabled ‘unicorn’ status.

TiE Startup 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 NUMA Bangalore and Excubator to help entrepreneurs showcase their FinTech solutions.

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

eloan-originators

Eloan Originators is a FinTech company providing easier and faster loans through loan originators. It provides online loan comparison, customized loan documentation, loan application and loan processing on a single platform, which aids ease of doing business.

Eloan Originators strives to provide all available options to loan consumers, so consumers can avail the best suited loans. It aims to reduce the cost of loans through loan portfolio management and enable loan originators with bank products and processes.

 

#2

frs

AnthahPrerana 2015 winner FRS Labs is a software engineering company specializing in fraud risk and security products. FRS Labs develops and sells the following products: Orpheus – Subscription Fraud Detection System, Atreus – Application Fraud Detection System, Prism – International Revenue Share Fraud Detection – Cloud System, Vistas – Visitor Access System and Atlas – Voice Biometrics System.

From a humble start in 2010 with just two Engineers, FRS Labs has steadily added more talent, products and an impressive clientele including two of the biggest Telecom companies in the world.

 

#3

initcodes

InitCodes is an R&D IT company that specializes in Fintech Innovation, Data Protection and Futuristic commerce. The Products wing is currently building a Unified Intelligence Platform for Digital Transactions.

The Consulting wing, on the other hand, provides high-end Technology Consulting in Data Science, Data Warehousing and Analytics, especially in the Life Sciences domain. The focus is on creating efficient solutions, each tailor-made with the customers’ business needs in mind.

 

#4

srishti2

Srishti ESDM focusses on designing indigenous and cutting-edge electronic products. They aim to revolutionize the art of digital human identification through their products.

PayHind, by Srishti ESDM, enables easy and fast payments through a single platform. With the growth of the service industry in the country, PayHind is emerging with innovative solutions to make payments easier for customers, providing Aadhaar based services, money transfer, paying off insurance premium and travel based services.

Takeaways from TiE EdTech Day: Masterclass on ‘Building a Brand’

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Masterclass on ‘Building a Brand’ with Ameen Haque, Mohan Kannegal, CS Swaminathan and Dr. Chhaya Shastri

Brand is the perception of a product, and perception will match reality over time, says Elon Musk. In essence, a brand is more a reflector than a representative of the product or the service one offers. Therefore, a product acts as the instrument at the hands of the scheme laid out by the brand. With players emerging day in and day out to offer the same service or a product with the same function, it’s the brand that plays the differentiator in making the choice of one over another.

A major setback in the startup industry and more importantly in the EdTech startup industry is the lack of resources that goes into branding after exhausting them on building the product. As visibility in the ocean of players is paramount for success, Dr. Chhaya suggests one to plan a proportionate divide of resources for the build and the marketing.

An iterative way to go about this would to be first build a minimum viable brand, similar to a minimum viable product, says Mohan Kannegal. A minimum viable brand would cover the bare essentials like the Brand Personality and Consumer/Customer Experience. Both these aspects ought to be reflective of the founders’/creators’ personality which would otherwise run the risk of leaving unfulfilled expectations among the customers. The final bit to this constantly updating process is identifying the emotional connect that one shares with his customers.

What is instrumental in holding up the minimum viable brand that is created to stay its course, and truly at it, is a clear strategy and precise differentiators as this has a major impact on the user experience of the brand and therefore its acceptance. Since, learning that is truly the epicenter of the EdTech industry, has not yet evolved into becoming a completely digitized process, it becomes also essential to cite linkages as often as possible to offline resources when the primary mode is online and vice-versa, comments C. S. Swaminathan of the Founding Fuel team.

 

[About the author: Vijay Kumar is a passionate startup enthusiast and an engineer from BMS College of Engineering. He works at Deloitte Consulting and in his spare time, narrates inspiring stories about the people striving to make a socio-economic impact through innovation and entrepreneurship.]

“Can you mentor me..?”

Lessons from my Entrepreneurial Journey #12

can-you-mentor-me

HealthMacro turns 4 this month. This post is dedicated to all those who have in some way or other mentored or advised me in my entrepreneurial journey.

I have been fortunate enough to have a wide range of people who have helped me through their guidance at times. Some of these have been important decisions.

As a technology person, I initially lacked expertise in finance, legal, fundraising and other matters. I would reach out to people who were experts, seek their views and get different perspectives.

Few ground rules:

  • Firstly, build trust by being transparent of your challenges.
  • A successful entrepreneur mentoring you is no guarantee of your success.
  • Your failure doesn’t reflect on your mentor’s abilities. He/she can only guide you. You have to execute.
  • It’s up to you to derive the best out of this relationship. You need to be clear what help you want from your mentor.

Mentors come in various forms:

  • Some of them come over as formal Advisors to the Co, the others due to their bandwidth challenges help you informally at appropriate times.
  • Sometimes I have learnt a lot through our vendors.
  • Few people I have met just once, but learnt a lot from those interactions.
  • Customers are your best mentors.
  • When some mentors are not reachable, I learn more reading their blogs and listening to them at events.

Why do you need a mentor?

  • Get a different perspective on a problem.
  • Someone who serves as your bouncing board for ideas.
  • Honest opinion on what to do next.
  • Industry level connections.
  • Connections to possible hires /investors.

Possible traits of a mentor:

  • Curious and learns from you as well.
  • Been there, done that person.
  • Expertise in certain domains.
  • Well networked person.

Who is a good mentor?

  • I earlier used to think that mentor is someone who is senior to me or has tons of experience, but I later realised that sometimes people several years younger than me, have good ideas and helped.
  • Always have a wide range of people who should be your sounding board.

Few Dos and Don’ts:

  •  Good mentors usually will be advising at least a few startups. Do not approach them to be your mentor. Just state that you need some feedback on your idea and get it. Asking them to become your mentor may even scare some people!
  • Build connections and show progress to possible mentor before asking them to be your mentor. Remember people like to mentor only possible successful people. Why would someone waste time on who they believe may not succeed?
  • Everyone is busy and time is key.  Ensure easy operating mechanisms to be connected and make progress.

In Summary:

  • Mentors come in various forms. Be open to receiving guidance.
  • Just 1 mentor is not good enough in this entrepreneurial journey. Seek more to enrich your growth.

Thanks to all mentors who have helped me in this journey…

 

This is the twelfth 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]

Takeaways from TiE EdTech Day: Masterclass on ‘How Schools and Higher Education Institutions Buy’

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Masterclass on ‘How do Schools and Higher Education Institutions Buy?’ with Murlidhar Surya, Dr. H Vinod Bhat, Vipul Redey and Priya Krishnan

The panel of speakers at the Masterclass on ‘How Institutions Buy?’ come from institutions with diverse administrative styles. With Priya Krishnan, founder of KLAY pre-schools, where decision making and administrative authority is more centralized on one hand and Dr. Vinod Bhat, Vice Chancellor of Manipal University on the other, where the authority is spread across various stages, departments and processes, the third speaker, Vipul Redey is the director at a global leader at education services where the audience, whom the administrative decisions are based upon, are the parents and the schools too.

The notes from the Masterclass are as below,

Get your introduction before you get there

As it is with mundane day to day activities, one is more prone to trust somebody that they know or believe in. This is pretty much the sutra the ad campaigns with celebrities have been thriving on for ages. Similarly and in a downsized manner, it will always work to your advantage when who you are going to pitch to can bank on the trust of somebody they already know and are more probable to believe in. Quite often than not, the right person to pitch to is at the top of the hierarchy and going through the degrees of separation gives one a fair idea of how the organization and its processes work, leading to a better understanding on what the business’ specific need is and/or avenues for development lie in and how to pitch it in a way that connects with the buyer.

 

Solve a business issue that fulfills a latent demand

With technology overwhelming every facet of business solutions, even in the ed-tech industry, it is tempting to fantasize and exploit the possibilities that it holds in creating services and products. However, the heavily invested and two sided interaction between the buyers and the institutions in the education industry, creates strong animosity and repercussions when the buyer doubts the legitimacy in the need for such a service or product. Therefore, it is imperative that one engages with one’s customers and understands what could cause a significant value addition to their world, builds the service one intends to provide on it and pitches these ideas as solutions addressing the customers’ pain points that could take the business to the next level.

 

Have a well-structured and logistically well-handled pilot

As important as it is to sell an idea, it is even more so important to execute the idea. A pilot is the testing ground where one has the opportunity to encounter issues that one could have only known through execution. While this is true, it is also this that will determine whether the buyer buys into the business. Have a pre-planned structure for the roll out of the product or the service into the pilot environment that is easily absorbable at the schools or colleges through trainings, feedback sessions and quick quirk-fixes while making sure the logistics run smooth. With all the planning in place, the last mile delivery is a definitive constraint that can be addressed through a champion, either from your side or the buyer’s side, who is well-briefed and trained.

 

While updating your pricing, upgrade your product too

The business matures when one is ready to take on a long term commitment with a buyer and this essentially comes about when one sees an upward gradient in the quality and/or the number of services provided. While any kind of an upgrade requires funding and resources which translates into the pricing, it is necessary to also keep an eye on whether the upgrade is truly seen as a considerable value add by the end customer and business too.

 

[About the author: Vijay Kumar is a passionate startup enthusiast and an engineer from BMS College of Engineering. He works at Deloitte Consulting and in his spare time, narrates inspiring stories about the people striving to make a socio-economic impact through innovation and entrepreneurship.]