The Billion Dollar Startup Club

The Wall Street Journal and Dow Jones VentureSource are tracking venture-backed private companies valued at $1 billion or more. See how the club has expanded since the project began in January 2014 and select companies to learn more about each.

Accelerating Time to Market Cap for Internet/Mobile Companies

Must read analysis by Playbigger for Internet/Mobile entrepreneurs. Summary at beginning to report,

Metrics for Early-stage Mobile Apps

Have been talking to many “mobile app” entrepreneurs of late, and one question I get consistently is around how they should think about metrics for mobile apps, to gauge early traction, and with an eye on first round of investors. Here are some thoughts.

In my view, valuable mobile apps fall in two zones – apps which will have tens of millions of users over time, but might not have a short term monetization model; and those which would have fewer users but strong anticipated monetization (think few hundred rupees per active user – a million monthly actives and Rs 100/monthly active gives a $20M annual business.) By and large, I am seeing the first kind of businesses in the Indian market, perhaps because mobile payment and monetization is still nascent. Getting stuck between these two end goals is generally not attractive to venture investors looking for scale.

Here are some metrics that startups and venture investors are using to assess early traction:

  • User growth: Installs and active installs are the first line metrics. Some notion of active users measured at a frequency which depends on usage context of the application – could be daily actives, weekly actives or monthly actives. One thing that seems to have lost emphasis since web days is the virality coefficient – have not seen great examples of viral growth of apps, perhaps because content sharing to app install workflows still seem broken. At a more operational level, tracking the pre-install and uninstall funnel can provide great optimization tips.
  • User engagement: This is perhaps the most important one, and where I have seen most distortion. Active users and/or percentage of users active, IMHO, are not great ways to measure these, because they interfere with user growth metrics – higher growth can lead to larger number of active users without improvement in app experience; lower growth can make the percentage metric look better. In my view, measuring cohorts is the best way of gauging this. First, active user cohorts (i.e. what percentage of users who installed in a particular period are still active). Second, activity level cohorts (i.e. how is the cumulative activity by a cohort of users growing). Active user cohorts provide an insight into leakiness of the bucket. The second one, of rising engagement – for great apps, activity level cohorts are rising charts, not falling over time. The metric of activity at the app level could be sessions per day, average screen views, time spent, or other metrics important for the business (such as messages sent for a messaging application). Note that the DAU/MAU metrics are sometimes used to assess user engagement, but for reasons mentioned above, they are not great metrics for engagement.
  • Key application tasks: A measure of how well and how often are business tasks being accomplished. These depend on the application intent – for example, in a match making app, this might be the funnel into generating a match. Very often these might be “funnels” and not single metrics, and it is a very useful tool to figure out where the flow of actions is constrained (i.e. conversion to next stage of funnel is low), and then fix those to optimize the funnel.

I have not included monetization metrics above because for the first class of applications, that can be solved at the next stage of business evolution. However, providing a directional sense of monetization mechanism and per user potential is important in setting scale expectations from the business. I have also not included a measure of “design excellence” above for lack of an objective measure – it is certainly something that is very important to provide a great user experience, and attain some of the metrics listed above.

Would love to hear from mobile app entrepreneurs on this forum on what they have found effective to gauge the progress of their businesses.

How to effectively use the Rs 10,000 crore allotted for entrepreneurship

I wrote this Op-Ed piece in Economic Times on how the government can effectively use funds allocated to entrepreneurship fund-of-funds.

Key points:

  • Leverage the funds to generate private participation and hence enhance the size of the pool
  • Leverage capacity that exists in corporations, microfinance institutions and the like
  • Emphasize under-served areas that align with national priorities, such as job creation, manufacturing, defense, social sectors etc.
  • Promote geographical and social inclusion to ensure a balanced growth

Comments welcome!

Back to the future

Last few months have been full of uncertainty and choice. It is rare that life provides us with an opportunity to step back and ask ourselves the all important questions of what makes us happy, and what do we really want to do with ourselves. It is even more rare that it simultaneously provides us with the right context to help us answer those questions. Over past few months, I was offered both, due to circumstances ranging from tragic to serendipitous on personal and professional front.

I am glad to share with my friends that my instincts have led me towards attempting to do another startup, instead of continuing with the venture investing business. At Canaan, we have built partnerships with entrepreneurs who we feel very proud to be associated with. We will continue to back and support those relationships, both institutionally and personally. However, I will not be making fresh venture investments. I am now on a lookout for a co-founder and an opportunity, which provide me with an uncompromising mix of fun and challenge over next many years. I look forward to help, support and guidance from my friends in startup, investing and corporate world, as I charter into what is always an unknown territory.

As I discussed these options with few close friends early on, something strange happened. Two of my good friends, entrepreneurs themselves, came back and solicited help on issues they were facing, in a way they never had before. Perhaps my position as a prospective investor in future drew boundaries on what they felt comfortable sharing with me. With those boundaries gone, new conversations opened up. I hope that I will continue to have the opportunity to share perspectives, which being on both sides of the table has allowed me to earn.

42 is a good age to begin. Again.

Video Interviewing Technology for Start-ups

One of the biggest challenges facing start-ups is getting the right talent. Or rather, in attracting the right talent. There is no dearth of talent in the market, but getting the right people to join your fledgling organization is a problem that most start-ups face. Why? Very few people want to join an ‘unknown’ entity.

One other problem plaguing the technology world is ‘resume fraud’. Candidates hype their resume, a more skilled person writes the test, telephonic interviews are taken by someone else to get a better rating and more often than not the fraud is discovered only when you get to meet the person face-to-face or after the person actually joins. By this time you have spent a lot of time, effort and money in hiring that person. This is something a start-up like yours can ill afford.

There could be a way out of this conundrum. A slow but steady shift is taking place across the globe in the way companies are innovating recruitment processes using the latest technology. Companies are seeking to drive a paradigm shift in the way they acquire talent making it more effective in acquiring the right talent. The new age talent acquisition process is ‘Video Interviewing’.

I am sure you will wonder what is different and innovative about this. Don’t we all use Skype or Webex or Go-to-Meeting for such interactions? Yes. You do. But it is mostly for personal interactions. Have you thought of making it a part of your business process?? Have you thought of making video interactions an integral part of your recruitment process?

There are solutions available for such video interviews on a pay-per-use SaaS model. Is it the same as a Skype interaction? No. It is much more. It helps you to incorporate videos right from the early assessment stage. In any typical recruitment process:

  • Instead of initial telephonic interviews, you can send out a set of standard questions to the short-listed candidates and they can video record their responses in real time and upload the same to the platform. They can do this at their own time and from anywhere, even using their mobile device.
  • You can review these videos at any time convenient to you, which relieves you of spending prime work time on such interviews and thereby making your day more productive.
  • You get to see the candidate in the first round itself, giving you a better feel for and assessment of his or her suitability and baseline the candidate’s attributes.
  • You can also have virtual panel interviews, making it more convenient for all the stakeholders in the organization.
  • The further shortlist is now even more refined and you can now also use the platform for real time one-on-one video interviews.
  • You then invite just 1-2 right candidates for a final face-to-face interview and make an offer to one or even both.

So how does this benefit you as a start-up with your talent acquisition?

  • Reduces cost of hire as it reduces time-to-hire and travel costs.
  • Brings in predictability and reliability to your hiring process. Helps to avoid instances of fraud.
  • Introduces a ‘Wow’ factor that could enhance your reputation with the candidates, making your organization more desirable to join.
  • No upfront investments, as most of these solutions are available on a Monthly Subscription basis.

India too is not far from adopting such means to enhance and enable their hiring process. Such solutions are available in India now. India also has its first video based job portal. So this is the future of talent acquisition and will help young enterprises like yours to better showcase your organization and attract the desired skills.

The author, Srikanth Vasuraj, is a Business Consultant focused on Mentoring and Advising start-ups. He can be reached at +91-98454 78585 or srikanth@nodiva.co.in . For more information please visit www.nodiva.co.in .

Mary Meeker’s 2014 Internet Trends report

Mary Meeker (who now does growth stage deals for Kleiner Perkins) has released the 2014 edition of her annual Internet Trends report. Lots to read and digest here.

Introducing In50hrs Healthcare Edition

Chennai is the Healthcare Capital of India; That’s a fact. Healthcare and Education are also the two areas that stand to be disrupted in the hands of an entrepreneur in this country and Globally. Yet, time and time again, We witness entrepreneurs building solutions that have no relevance to any of the pressing needs of those in the healthcare ecosystem  - be it hospitals, clinics, doctors, physicians, administrators or those who perform the operational tasks of these institutions.

We decided to turn this on its head, and bring the two stakeholders together, give those interested to disrupt the space, with a chance to “Live-in” with these stakeholders for a week, understand their world and find opportunities to make things better. We believe that anything you can do to make the lives of these stakeholders better, improve efficiencies, tap new opportunities, visualize data, will all significantly enhance the care that the patients enjoy.

We asked many entrepreneurs who are working in the healthcare space, what their biggest constraint has been, and most often than not, we heard the phrases “access to hospitals” mumbled somewhere in between. We decided to do something about that.

In50hrs Healthcare Edition (June 2nd – 8th), unlike the typical In50hrs, will run a tad bit over 50 hours. The first five days are an immersive experience to be in a hospital, and understand the world of hospitals (and few other healthcare partners), and for you to witness what goes on in their day to day professional life.

Over the five days, Physicians, head of units – be it labs, operating theatres, general practitioners, nutritionists, along with the CIOs and several experienced entrepreneurs will both share some of their pain points that you can solve, or will be there for you, to answer any questions you might have.

The Weekend that follows that, follows the general template of In50hrs as we do it – and explained at www.in50hrs.com#agenda - a bootcamp, followed by pitch sessions, forming teams, building the prototype – except that here, in the end the jury are going to be the head of units and CIOs of hospitals. Should your prototype seem to show promise, you will be granted an extended six months, and access to deploy your solution at the hospital and a guarantee (on success) to be your first referral customer.

if you know of aspiring entrepreneurs in the space, do let them know.

More details and registration at www.in50hrs.com/healthcare

Lead Nurturing Strategies for Start-ups

This is the most critical and heart-breaking part of acquiring customers. It can sap even the most persistent. But there is no alternative if you want to convert your qualified lead to an invoice. In the first place, consider yourself lucky you have a set of qualified leads. Most start-ups do not enjoy that luxury. Now it’s only about how you grab this opportunity with both hands and push and prod them to a decision.

Having said that let me tell you there is no ‘best’ or ‘sure fire’ way of nurturing leads. You have to feel your way through. But remember, whatever you do be consistent.

What is Lead Nurturing? It is the consistent process of keeping the lead engaged with a series of focused and relevant content that is both informative and educative about your domain and its impact on the prospect’s business.

Please note, this engagement may very well be just one-way. The lead may or may not respond. But you can rest assured that the information you are sharing is being read, assimilated and filed away for future reference. More important, you are in the process establishing high recall for yourself and your company. The idea of lead nurturing is to get you the inside track in a highly competitive environment where there is a surfeit of information and try and evoke a reaction, be it a step towards a decision or start a conversation or just a response, with the kind of content that you present.

What is the kind of information you should share with the prospect? This is something most sales people ask me when we discuss lead nurturing. Having understood the target segment from where the lead has emanated, you need to come up with content that is relevant to the prospect and adds value to the prospects business and decision-making process. The content could be anything like Blogs, Customer Use Cases and Testimonials, New Customer Acquisitions, a New Use Case, White Papers, Company Newsletter, Webinars, new product development or enhancements etc. You could also share links to relevant blogs on other sites which could help to improve the prospect’s knowledge and intellectual property. Share lists of customers in their line of business or located in their part of the woods. This could help as most customers suffer from ‘herd mentality’. If someone from their domain or region or locality has taken that leap of faith with you, then you must be ‘Ok’. So share as many such confidence boosters.

Another innovative way would be to visit their website, understand their business, the processes they could be following and try and build a possible Use Case specific to their business where the benefits from using your product or service could be better highlighted. I find this a very powerful method as nothing will convince the prospect more than transplanting an idea in their environment and making a point.

If you start to think out-of-the-box I am sure you will come up with many more innovative ways of keeping your prospect engaged. Keep ideating and coming up with new ideas of how to keep your prospect engaged. Trust me, pressure of targets brings out the ‘Einstein’ in most sales people.

What is ‘consistent’ engagement? I am often asked how often should one write to the prospect. How consistent is consistent? How often is too often? It all depends on where you had reached in your interactions with the lead. That will help you to judge the level of communication you need to employ with the prospect.

  • If the lead has visited your website and filled a form to download some resource and you have sent a ’Thank you’ and ‘Introduction’ mail to which there has been no response, then in the initial couple of weeks from first contact you should keep sending some information once every week. If there is still no response, then thereafter slow it down to once a month.
  • If the lead has either taken a product walk-through on your site or you have connected and given a product demo and thereafter drops from the radar, then keep pushing a lot of product information and customer use cases. Again keep up the pressure once a week for a month or so and thereafter taper off to once a month. During this time you could also volunteer some special price schemes to elicit some reaction.
  • If the lead disappears after a demo and price discussion then in all probability they are studying competitive products and/or going through the internal process before a decision. This is when you need to share more information on business benefits and ROI. Information that would help the user get the necessary approvals. The follow-up should be intense, probably once every 2-3 days for 3-4 weeks. Follow-up should also include telephone calls.

The above is only to give some directions on the approach you could adopt to take a lead to closure and not necessarily the only way. Your actual interaction with the prospect will determine your line of action.

During all of the above or wherever you may be in the sales process it is important to get the prospect to give some indicative timeline at the very least. Understand his use case and reasons he is even thinking of your product. If you know why he is out shopping, you then have the opportunity to tailor your communication accordingly. All this is part of the lead nurturing process.

But remember, don’t lose wind. Keep up the efforts. Not all will actually close. But such lead nurturing has yielded closure rates as high as 45-60%. That should encourage you to keep pegging away. Results will surely follow.

The author, Srikanth Vasuraj, is a Business Consultant focused on helping start-ups to grow. He can be reached at +91-98454 78585 or srikanth@nodiva.co.in . For more information please visit www.nodiva.co.in .

Lead Generation Strategies for Start-ups

Being a young enterprise, you have a product and you have your first set of paying customers. Now the challenge is to take your product to market, generate volumes and gain market share. What are the strategies and plans that you need to adopt to generate a list of prospective customers whom you could pitch your product to? This is where start-ups usually hit a road block. Most new entrepreneurs are unaware of what to do to put in place a robust and scalable lead generation strategy.

Any good go-to-market strategy should have an ‘Inbound’ and ‘Outbound’ lead generation plan.

Inbound is about helping potential customers find you on the net and Outbound is to proactively search for such prospects and inform them about what you have to offer. No go-to-market plan is complete without a good mix of both strategies. A lot of start-ups just follow the ‘Inbound’ route as it costs less. But fail only because they are not consistent with the actions that need to be taken regularly for driving traffic to their site. So a mix of both will help to ensure a steady flow of ‘qualified’ leads.

So, what is a ‘qualified’ lead? A qualified lead is one who has heard about or found your product and has evinced interest, though there may not be an immediate need for it. Such ‘qualified’ leads help to reduce the selling cycle and improve chances of converting the same to a customer. Most leads may not buy immediately which is why you need to also have a strategy in place to nurture the lead till closure.

Briefly detailed below are some typical actions that could be implemented as part of your lead generation strategy:

Website:

Build an informative, interactive and well-designed website, with as many CTA’s (Calls-to-Action) as possible to enhance the visitors experience about your product and help take an informed decision. The navigation should be simple and quick with the prime objective of keeping the visitors engaged as much as possible thereby extending their stay on your site and improving the chances of converting them to prospective buyers.

Content:

This is the most critical component of your marketing strategy. To provide good content on your site you should first be absolutely clear about who your target audience is. All content created and published should be relevant and valuable to that target audience. This is what will attract such visitors to your site and keep them engaged for the maximum time. It will also ensure repeat visits and help to establish mind-share for your product and thought-leadership. Don’t forget, most prospective buyers do a lot of due diligence before buying anything. You should figure in that process. Content includes Blogs, White Papers, Case Studies, Newsletters etc.

Social Media:

Make sure you have a good digital marketing strategy, which includes promoting your product or service in all social media platforms like Facebook, LinkedIn, Twitter, Google+ etc. These platforms are being increasingly used for lead generation, as people search for information and research what they looking for using these platforms.

Direct and Email Marketing:

This is by far the most popular lead generation strategy followed by most. A well created and targeted mail campaign can help you get in front of people quickly and share relevant information that they may otherwise miss while searching the net. To get the desired results, a typical email campaign should follow a clear plan:

  • Create the database of your target segment
  • The campaign should have a Teaser, Main Mail and Follow-up Mail with 3-4 days gap in-between
  • Cold calling and follow-up calls. Both should be well scripted, with a plan to handle FAQs.
  • A good product training program for the tele-callers

Online Ads:

These could be just display or pay-per-click (PPC) ads on other websites, search engines or popular platforms.

Having put in place a good lead generation program, it is also critical to have well defined internal processes for Lead Allocation to sales and Lead Nurturing. Most leads do not decide immediately. But having evinced some interest in your product they will buy one day. Lead nurturing will significantly improve the chances of converting the lead into a customer.

My next post will discuss what goes into building a good Lead Nurturing Process. In the meanwhile, trust the above helps to either build your lead generation plan or reinforce what you have already implemented.

Hang in there and stay the course! Consistency and determination is the key to success!

The author, Srikanth Vasuraj, is a Business Consultant focused on Mentoring and Advising start-ups. He can be reached at +91-98454 78585 or srikanth@nodiva.co.in . For more information please visit www.nodiva.co.in .