Archive for the 'Ideas & Companies' Category

Launching an Experiment to Spot Problems Worth Solving

It is a little over ten years now, since I started working with the Startup Ecosystem here. Much has changed – and I’d say for the better. Funding has improved. Startups are mainstream. And Entrepreneurs are celebrated. Yet, when I look at some of the companies and startups that we showcased at Proto.in ( Between 2004 – 08), it seems some of them were quite out of the world, compared to the me-too startups we see.

Chennai, a tier-2 city by most metrics, has 52 food delivery startups (that we know of). In a conversation with a group of students in IIT and when I prodded them asking why they aren’t going after some of the bigger problems, their answer was simple; “Sir, we read that some of these companies have raised 10s of millions. We look at their venture and it seems so simple and we believe we can do it better”. While the audacity is to be applauded, It also makes me wonder if the best and brightest need to be going after ventures that are essentially time-bound courier service ventures.

As part of The Startup Centre, we’ve been running In50hrs (a prototyping event) for four years now. We’ve been active in 8 cities across the country – organizing close to 14 events a year. I personally love it – seeing entrepreneurs from each of these hubs, and their ideas. But it seems that most of them are drinking out of the same watering hole for their inspirations.

I strongly believe that the ecosystem will sustain as long as we are solving real problems. Inflation and frothy valuations only kick in when there is excess of capital but not enough opportunities to chase. Capital being available is a good thing; I wish if we could direct it to a better purpose.

A few months ago I started talking to a few people to collate problem statements (alok was kind enough to send a few of his own). We are trying to see if we can seed these problem statements – not ideas, but problems – so that the ecosystem can benefit out of.

We put all of them in a Google spreadsheet and shared. I have an inbox full of requests to show that people were indeed interested (or perhaps just curious). But there wasnt a way for folks to interact, and build on it. I opened up the access priviledges and it only took a few minutes before it got vandalised.

Building from the learnings, a week ago we launched Ideaspace. We are building a community around problem solvers – the same community that came together for In50hrs, but this time centred around problem statements – both seeded by us, and those that the community throws up. We’ve a little over 400 users on the platform right now. If you’d like to participate, do let me know. You can signup via http://ideaspace.in50hrs.com. If you are simply curious and just want to have a glimpse of the problem statements then you can do so via http://ideaspace.in50hrs.com/problems

I’d love to have your feedback – and thoughts on the same.

 

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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.

Online classifieds – calling again

Hindu BusinessLine carried this interview of mine on online classifieds market. Online classifieds remains perhaps that most rewarding space thus far in the internet domain from an investment standpoint, on M&A (carwale, jobsahead), IPO (naukri, justdial) as well as continued companies getting to scale (matrimony, property, food). Surprisingly, it has not generated equivalent entrepreneurial interest, especially as some of the disruptions around location and mobility create new opportunities.

We have also been seeing a distinct evolution in classified products, around the following elements:

  • Quality of content – Traditionally, classified businesses have relied on the sellers putting up the content, without much support for authenticity of information. New classified businesses are innovating to improve quality of content
    - (a la Cartrade) – by building automation around content generation, through connectivity with ERP systems
    - (a la Zomato, Indiaproperty) – by making the content richer, including maps and audio visual content
    - (a la Bharatmatrimony) – by verifying 100% of the listings
  • Relevance of content – Traditionally, classified business have relied on search as a method of generating relevance of results. New classified businesses are using social graphs to
    - increase relevance by leveraging the social graph (a la Shine, Tripadvisor)
    - augment content from social graph to make content richer and relevant (a la Bharatmatrimony)
  • Actionability – Traditionally, users are left to their own device as far as responding to ads is concerned. New classified businesses are enabling immediate and always-on connect (a la justdial mobile/ premium)

Perhaps an area for entrepreneurs to dig in more purposefully.

SWOT Analysis – Importance and Need

For those who are not aware of SWOT, it stands for Strength, Weakness, Opportunity and Threat and an analysis of all these factors is done for any new product, service or company. I have come across many business plans without a SWOT analysis. People probably underestimate the power of such an analysis. A good SWOT analysis gives you a top-view of the entire business plan, even before the actual business plan is made. Done with sincerity and honesty, this analysis can help you with:

Product Definition: Once you have clearly identified the target segments and understood their attributes, you will probably take a harder look at your product. A good understanding of whom you are trying to sell your product to would help to define the product better and position it appropriately.

Identifying Inherent Deficiencies: We all think our product is good and that it can definitely deliver benefits to the customer. But the longevity of a product is not in what it can deliver now but how it delivers it, will what it delivers continue to be a need and what more can it deliver over time. This analysis is critical to have a predictable and scalable business plan.

Defining Target Markets: Identify your opportunities and the impediments to maximize those opportunities would help in a more comprehensive Go-to-Market plan. You may just end-up realizing that there are more avenues for generating revenues than the ones you had thought of or may end up taking a re-look at your target market itself.

Understanding Key Market Attributes: Demographic, geographic, social and cultural attributes of your prime markets could seriously affect your overall business plan. Getting to identify these important factors could help to develop a more complete product offering and a marketing plan, to target specific needs that may have otherwise missed your attention.

Competitive Analysis: In trying to define your threats you would be forced to do some more work towards understanding your competition and where your product stands in comparison. Getting to know the reasons for your competition’s success or failure would only help you in making your offering more robust.

Identifying Threats Other Than Competition: Direct competition may not be the only threat. For example, the watch industry’s biggest threat is the mobile phone, with more and more people using this ubiquitous device to also check time. So, such an analysis would help you to do more homework to address such competitive variants and build your competitive barriers.

Any start-up should first do a SWOT of what he intends to create before even attempting anything. This will help him/her to validate most of the assumptions that had been made while planning the enterprise and enable focused efforts leading to meeting objectives.

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 . Please visit www.nodiva.co.in for more information.

Blogging helps to generate traffic for your site

Having built a great website, how do you get traffic to your site? It is one thing to have product or service relevant content, but what would be found more interesting is regularly updated content relevant to the product, industry or target groups that you wish to connect with.

Search Engine Optimization (SEO) is one way, but another effective way is to post blogs on your website. Blogging helps to create credibility for you and the service that you offer. The blogs should be credible, interesting and relevant to your service or product, the eco system that it addresses and related information that could be of interest to your focus groups. It would also be a good idea if you could get customers and people from within your eco system to post blogs on your site. It would help to increase visibility for your site.

More you blog, higher the traffic. Frequency of blogs should be atleast once a week or more, which would then attract regular followers. Once you establish a regular beat rate, followers will regularly visit your site to read your posts. Use as many search words as possible in your blogs. Provide links from your blog to some relevant page within your website or some relevant article. Make sure your titles are interesting but also contain your search words. All this is part of SEO.

Typical SEO activities that would help to attract more traffic are using search words in your website content as well as blogs, representing your search words in italics or bold, using search words in your headings and sub-headings, providing links to relevant pages within and outside your site etc.

Blogging is also a way to advertise your domain knowledge and establish yourself as a thought leader.

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

 

Internet in Tier II/III towns

My article in Strategist regarding the challenges and opportunities for Internet services in Tier II/III towns. Read on…

http://www.business-standard.com/article/management/overcoming-the-digital-divide-113060200429_1.html

Captain your Ship

As an entrepreneur or the CEO of a start-up, you need to clearly take the lead position, as it is your vision and mission that the team has to take forward. Not all CEOs of start-ups have the experience of leading an organization. But you don’t need to let that inexperience reflect in the way you deal with your people.

Build your ‘A’ Team

This is the most important task that the CEO has to put in place first. Choose your team for the special capabilities that they bring specific to your business. People with domain expertise, with experience setting-up new enterprises, experienced advisers etc. Use them to implement your ideas. You may not have all the attributes to run a business entity, but your team will. Have faith in your team. Allow them to make mistakes. Give them time. No business is an overnight success.

Set up a system for review and accountability

The CEOs job of managing his team becomes easier if a clear set of KRAs and milestones are set for each member and a well-defined periodic review process is followed. This will ensure accountability and adherence to timelines.

Communicate your ideas clearly

This is one area where a lot of business heads fail. Sharing of thoughts and ideas about the business with your team is important as it will serve two purposes – (a) they will know that you are on the job all the time; and (b) it will give them an opportunity to share their opinions and experiences with you and the rest of the team. Such exchanges will only help to better the business plan.

Establish lines of communication

Have an open-door policy. Encourage everyone in your organization to walk in to meet and talk with you. You never know where that winning idea could come from. Keeping your channels open would also help to keep a tab on the mood in the company, especially when things are not going as per plan. Have an open mind and treat each bit of information without any bias or prejudice and give its due credit. In fact, this could help you stay ahead of the curve.

Do not be afraid to make mid-term changes to your plans

As I have mentioned in one of my previous posts, most new ventures have had to change the entire plan atleast once in their life-cycle. By this I do not mean that you need to look at new business ideas and solutions. What normally happens is that the go-to-market or product/service/solution strategies go through major revamp, with acquired knowledge of market realities regarding your business. Most business leaders shy away from doing anything to their product/service/solution, as that is very close to their heart. This takes courage and an astute business mind. Afterall, the business was started to take it to success. It is important to keep your focus on this end-objective.

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 . Please visit my website www.nodiva.co.in .

Building a Scalable Sales Process

To ensure a predictable business plan it is important to have a repeatable and scalable sales process in place. Thereafter, increasing revenues as per the business plan would only mean increasing the sales team and the geographies that you intend to address. Once the sales process is in place, the sales team would only need to follow the process that has been set in place to start generating business. A scalable sales process should include:

-   An effective marketing strategy for lead generation

-   A good understanding of the prospective client’s decision-making process

-   A Go-to-Market (GTM) strategy that is built around the client’s process, to ensure progress of the sales efforts to predictable and desired outcomes

-   A sales process that will help to control the cost of customer acquisition

An Effective Lead Generation Program

To establish a regular business beat-rate, it is important to ensure that the sales force is regularly fed with qualified leads that they can then take forward to a possible closure. This can only be achieved if there are several lead generation strategies in operation. These should include, but not limited to:

-   A good and effective in-bound marketing strategy using the website and social networks

-   Some amount of out-bound marketing to create some overt awareness, like interviews with opinion leaders, planting business-specific articles, organizing/participating in events etc.

-   Cold-calling through an internal or external team, using any qualified databases

-   A referral program for employees, customers and other external sources

Using these and any other lead generation program would help to ensure that the sales force is kept busy and they have a healthy funnel to work with.

Understanding the client’s process for a scalable sales model

This is extremely critical for ensuring a predictable process, without which the sales team will never be able to correctly forecast business closures. Understanding this process will give a clear view of the way the sales effort is progressing and the actions required to be taken to move the sales process forward. This knowledge will also help you to plan and put in place the necessary actions that need to be taken at every stage of the sales process to ensure that the client has the necessary information to push it to the next level internally.

For example, if the decision maker is looking to garner internal support from other departments, this should be clearly tracked and the relevant material should be ready for circulation within the decision-making team, even before they ask for it. This would help to bring down the sales cycle-time and also establish some level of credibility. Similarly, if you know that the CFO/CEO may be the final decision-makers, then you should be ready with the business case and ROI calculator, to be able to quickly present the business case when the need arises, instead of reacting. Such proactive initiatives will go a long way in building credibility for yourself and give the impression that you have done this many times before. This is very important for a new venture.

Once this process has been streamlined from the experience of selling your solution or product to atleast 10-15 different clients, you then know you have a process that is now predictable and ready to be scaled. You now have a process that is customer-centric and is able to predict the client’s requirements at every stage, enabling you to take pre-emptive actions.

Controlling Cost of Customer Acquisition

With a predictable and repeatable sales model, you are now able to track the sales progress and the time it should take at each stage. Any time over-runs will mean an increase in the cost of sale. Monitoring and managing this at every stage will ensure customer acquisition within reasonable timelines and cost.

Also, this model will now empower you to take decisive calls on how far to engage the client before business closure. The usual sales problem is continuing to service a client for unreasonably elongated timelines and still having no closures, leading to an unpredictable sales forecast and inflated cost of sales. With this customer-centric model, you can predict where the bottleneck is and come to a reasonable conclusion on the probability of the business closing in your favour or closing at all, helping you to take that difficult call of pulling out of the opportunity. In most cases, this is usually the difficult part and that is entirely because of a lack understanding of the client’s decision-making process and therefore a high reliability on ‘HOPE’. Knowing when to say ‘NO’ is very critical to ensure sales costs are kept within permissible limits.

Controlling cost of sales, increasing sales productivity and bringing in some semblance of predictability to the sales forecast are issues that even established organizations are grappling with, and I do hope that my experience in trying to address these issues, as enumerated above, would be of help.

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 . Please visit www.nodiva.co.in .

 

HR Ideas : Fresh Talent Acquisition, Campus Hiring, Tests for Hiring, Group Discussions & Just-In-Time Fresh Talent

In this blog post we would focus on one of the key aspect of any building fresh talent pool for growth. Every growing organization cannot ignore this essential method for talent building. This method is successful based on the Job market, Industry awareness & Social Influence on the Young Generation in that market.   There are many Government initiatives in various countries based on the business/economic environment in those countries. India – Govt. of India spending lots of money in developing resources through their National Skill Development Programs.  In Wales-UK the companies are provided grants upto 50% of employee salary to companies based on the location and skills they are hiring.

 

Hiring Fresh Talent:

Businesses across the globe strive to build efficiency in People, Process and Technology. A growing organization would have no choice to build within. A building within the organization means a plan for cost efficiency and building future talent the way you run your business. Many growing organizations keep certain percentage of the new workforce hiring for Fresh Talent. This gives them an edge of building and sustaining Hands to Deliver and Senior Management Head to think.  It becomes many times inevitable to recruit fresh talent for growth.

 

Idea: Create a simple processes for Fresh Talent Hiring in Organization including pay range(Your affordability + availability in your areas of operations), designations(do not go by fancy designations – simple meaningful for the role), Training & Orientation time (Must for getting value), Measurement of performance parameters and Growth Opportunities in future. Hit the road once these things are defined with clarity.  Variations can be possible based on Industry, market & Social circumstances around employment region.

 

Campus Hiring :

Campus Hiring is all about building your brand with the potential employees and bring some of the bright and new ideas into the organization. However, It’s not as easy as it sounds. It is a hard work for the employer to make an effort to identify the potential colleges who can produce the best that suits for you. No campus is right for everyone, please identify your own campus based on what you want and if they college graduates are tuned to come to your campus.

Idea: Do not go by the rank of the school when you choose.  Talk to the head of the college and see how his/her focus in grooming the students in their college.  They would be able to give you multiple options including they can send their students to your office than you going to the college.  However, there are advantages if they visit your office to keep them more close to the realities.

 

Hiring Tests for Evaluation:

Conducting Test is a universally used process for filtering from more applicants. This test can be applicable based on the position (especially jr.level) unless it is a mandatory Regulation in specific positions. A Selection Test can focus on the work related and non-work Related. Work related test would include the areas of business/function. Non-work related can be to test the mathematical, logical thinking ability etc.,

Idea: Building a Test for evaluation can be tedious many times. However, use this as a point of elimination first, but the result of successful candidates can be used for Discussion point during personal interviews. Build a simple test and administer internally to see the reliability and build some Upper and lower control limits for elimination (Tolerances). Do not make it lengthy, but focused on the output that you may want to draw. Include Work related & non-work related together to save time and give equal number of questions as far as possible.

 

Group Discussions:

Group Discussions are generally to evaluate one’s ability to collaborate and communicate with the group. This can also bring about the team dynamics and the adaptability of the individual who are involved.  The participants can be put to discuss a specific topic related to their function or general ability/knowledge. This method is again used for elimination/filtering from a large group of applicants.

Idea: Building Group Discussion evaluation is important which can focus on 3-4 key parameters which would impact the potential job that the applicant is going to face inside your organization. Typical parameters include Communication (verbal, non-verbal), Interpersonal skills, Building Ideas & Developing Relationships.

 

Just-In-Time Fresh Talent:

Business wants any resource Just-In-Time to make sure that the return on investment is perfectly timed. Any Business organization would be thrilled to see If they get a readymade resources for them. Currently governments are building lot of talent pool to make sure that the employment generation happens quickly. All the efforts are made to build employable people as soon as they complete their education.

Idea: As always “No pain – No Gain”. A step forward can help you to a great extent in building your talent. If you are in a specific area of specialization you could design a program which can be given to the Government Initiatives (India – National Skills Development Program). You may get in touch with your Industry association to ask for your required resources and help yourself (In India : http://www.nsdcindia.org/our-work/industry-associations.aspx, http://www.nsdcindia.org/faq/entrepreneur-faq.aspx  in UK wales govt. :http://www.gowales.co.uk/en/Graduate & UK Govt. https://www.gov.uk/jobcentre-plus-help-for-recruiters  )

 

 

 

 

Things to know about Angel Investors

As a start-up, if you are looking for angel investors, it would help to remember the following:

Have a complete Business Plan:

Remember, you don’t need a 30-page plan. Investors do not have the time to go through such huge plans. They need all the information in a precise and concise form. It would help to consolidate your entire plan in a 10-slide PowerPoint presentation. Clearly outline the business model, how you will get your revenues and your exit plan, so that the investors will know how the business will grow and when they will get their return.

Most important – start with the problem-solution statement. The solution details can follow.

Get your numbers right:

Investors look for a plan with a clear potential to scale. That means you must be addressing a market that is atleast 10 times the revenues that you are projecting for the 5th year. Your year-on-year growth should be in double digits. Anything less would make the Angel sceptical. Keep your numbers credible and doable. Do not over project.

Business Knowledge:

Angels feel more comfortable dealing with people who have good domain knowledge for the business they are planning and/or have prior experience in setting-up companies. Please do not mistake domain with solution. You will have a good knowledge of the solution but may or may not have knowledge on the business domain that your solution is addressing.

Go to a known Angel:

Angels prefer dealing with people who come through a known source. Make sure you activate your network to get connected with some Angels before you actually start looking for funding. Sending mailers to large number of Angels will not work. They will treat your mail as spam.

Look for an Angel in your city:

Angels normally like to be actively involved in the venture. So it does not make sense to work with an Angel from some other location.

Size of Funding:

Angels normally fund anywhere between Rs. 50 lakhs to a Crore. For anything bigger, you will need to look for VC funding. Angel investors also help you get VC funding when you need to get larger funding to grow the business or explore new markets. This is in their own interest.

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 .