SLIDE 1
Idea/Opportunity Product/Service Company Tracing the Trajectory of - - PowerPoint PPT Presentation
Idea/Opportunity Product/Service Company Tracing the Trajectory of - - PowerPoint PPT Presentation
Idea/Opportunity Product/Service Company Tracing the Trajectory of the StartUp Roller Coaster! ENT203 Part I: Oct 3, 2016 The Journey Part II: Oct 6, 2016 Challenges & Learnings Dr Ram Ramdas, Founder & CEO - Herald
SLIDE 2
SLIDE 3
...Aim for “the Good and Not “the Perfect”!
Confidential, not for circulation
SLIDE 4
...Continuous Discovery, Iteration, Validation
Confidential, not for circulation
SLIDE 5
… “Failure”, Rejection & Being Misunderstood
Confidential, not for circulation "Invention requires a long term, deep rooted willingness to be misunderstood by the world" – Jeff Bozos First, no one’s heard of you. Then, they’ve heard of you but think you’re nuts. Then, they understand your product, But think it has no opportunity. Then, they view your product as a toy. Then, they see it as an amazing toy. Then, they start using it. Then, they couldn’t imagine life without it. And this can take years or even decades...
SLIDE 6
… “Failure”, Rejection & Being Misunderstood
Confidential, not for circulation The story of the Wright Brothers is a perfect example of: "Invention requires a long term, deep rooted willingness to be misunderstood by the world" – Jeff Bozos "Before the Wright Brothers, no one working in aviation did anything fundamentally
- correct. Since the Wright Brothers, no one
has done anything fundamentally different." Darrel Collins, Kitty Hawk National Historic Park http://www.wright-brothers.org/History_Wing/Wright_Story/Wright_Story_Intro/Wright_Story_Intro.htm
SLIDE 7
Maximize chances of “Healthy” SURVIVAL...
Confidential, not for circulation 20 months: Average Time Between a Company’s Last Funding Round and Death Research based ONLY on FUNDED startups! Many more die without funding!
SLIDE 8
...Maximize “LEARNING”
Confidential, not for circulation https://steveblank.com/2010/01/25/whats-a-startup-first-principles/
SLIDE 9
Confidential, not for circulation
...and Build a “Very Valuable” Company
Dharmesh Shah Founder HubSpot
SLIDE 10
Confidential, not for circulation Confidential, not for circulation
DISCOVERY -> VALIDATION -> EFFICIENCY -> SCALE
Four Steps to Epiphany
SLIDE 11
Confidential, not for circulation
LEAN Startup – Iterative Cycle
SLIDE 12
Confidential, not for circulation
Wisdom of Ozzie the Oracle – Learn, Iterate, Pivot
From Selling the Wheel by Jeff Cox
SLIDE 13
Confidential, not for circulation
Business Model Canvas – (eg Zynga)
SLIDE 14
Confidential, not for circulation
Scale ONLY A.F.T.E.R Learning
SLIDE 15
Confidential, not for circulation
Consistent progression across the 4 Stages
SLIDE 16
“Crossing the Chasm”
Confidential, not for circulation Geoffrey Moore - “Crossing the Chasm” ; summary courtesy: Henrik Berglund, Chalmers University of Technology
a.k.a. The Valley Of DEATH !!!
SLIDE 17
“Crossing the Chasm” - Types of Customers
Confidential, not for circulation Ilustration of Gmail -> http://blog.mailchimp.com/major-email-provider-trends-in-2015-gmail- takes-a-really-big-lead/
SLIDE 18
Confidential, not for circulation
Understanding the “Chasm” and the “Valley of Death”
SLIDE 19
Confidential, not for circulation
Strategy for Crossing the Chasm
SLIDE 20
Confidential, not for circulation
Omaha Beach : D-Day Normandy Landing WW2
https://en.wikipedia.org/wiki/Omaha_Beach
SLIDE 21
Scaling to be a Very Valuable Company
Confidential, not for circulation
Sustainable Competitive Advantage – how big is the competitive
Warren Buffet Moat?
Presence of Network Effects – does the model tip to a single
vendor?
Visibility/Predictability – is the revenue consistent? Customer Lock-in / High Switching Costs – is it expensive to leave? Gross margin levels – How much leverage exists is the business? Marginal Profitability Calculation – is the leverage still expanding? Customer Concentration – are there key dependencies? Major Partner Dependencies – are there key dependencies here as
well?
Organic Demand vs. Marketing Spend – is customer acquisition
expensive?
Growth – how big will the future be?
The Sweet Spot to join The 10X Revenue Club : Score A+ on the 10 critical questions http://abovethecrowd.com/2012/02/01/why-facebook-clearly-belongs-in-the-10x-revenue-club/
SLIDE 22
Part 2 Challenges & Learnings from the the StartUp Roller Coaster Ride
The Herald Logic Story
SLIDE 23
Timelines of the Journey
Confidential, not for circulation
2000-2002: An Idea & a Dream The idea was to help businesses find actionable information in the sea of data that floods an enterprise and the dream was to build a world class software product company. Journey starts in KRESIT @ IIT-B 2010-2013: Pivot: Platform --> “Whole” Product : Channel & Distribution Management 2002-2004: Genesis of the IntelliRADAR Platform - “Just ADD DOMAIN” 2004-2010: Valley of Death- Right inside the Chasm !!! 2013-2016: Pivot Again : Product --> Subscription Service 2016-: Accelerate value; SCALE CMS 2016 onwards: Accelerate MORE VALUE. Replicate the CMS business model for Digital Lending – Birth of WonderLend Hubs
SLIDE 24
2000-2002 : Idea → Platform
Confidential, not for circulation
2000-2002: An Idea & a Dream The idea was to help businesses find actionable information in the sea of data that floods an enterprise and the dream was to build a world class software product company. Journey starts in KRESIT @ IIT-B
Events
“Raw Engine” Stanford Global
Disruptive Tech award
Multiple free &
paid POCs, paid pilots
Founder Team
expansion
Continued in
Incubator
Engine –>
Platform (pivot)
Received an
“attractive” acquistion offer What we did right
Bootstrapped Kept Costs <
Revenue
FRUGAL Outsourced “non-
core” activities
Close to ZERO
Overheads
Balance in
Founding Team
Retained FOCUS Kept our BELIEF Instituted sound
hiring practices
Culture & DNA Turned down
acquisition offer !!! What we learnt
Understanding
when to say NO
Selective,
conscious experimentation
Absence of
Business model canvas map
Chasing investors
early is a mistake
SLIDE 25
2002-2004 : Birth of Platform
Confidential, not for circulation
2002-2004: Genesis of the IntelliRADAR Platform - “Just ADD DOMAIN”
Events
Platform
development
Sign up FIRST
REAL PAYING customer (US Hedge fund)
Multiple free &
paid POCs, paid pilots
A Few “serious”
investment discussions
Multiple “semi-
serious” investment discussions
Another M&A offer Angel money
received What we did right
Remained in
KRESIT Incubator
Built some cash
surplus
Remained
FRUGAL
Started focusing
- n developing our
Business Model
Retained FOCUS
& BELIEF on core vision
Turned down M&A
- ffer !!!
Angel Money: Customer Partner One Qualified
Angel What we learnt
1 customer NOT
EQUAL to Market
Chasing investors
early is a waste of energy
Hasty conclusions
about our market and customer segments
Inital business
model
Dropped “BAM” as
a market
Dropped US focus
SLIDE 26
2004-2010 : From Early Adopters → Chasm (Valley of Death)
Confidential, not for circulation 2004-2010: From Euphoria of Early Adopters to the Valley of Death Events
Multiple paying
customers in multiple domains
Multiple releases and
enhancements of platform
Entered into a Global
Alliance
Scaled “rapidly” Huge Cash Losses Took on significant
External Debt
Some founders
branch out; another joins
Angel round
termsheet What we did right
Proved value of
platform in multiple domains
Enhanced
robustness of platform
Chased marquee
customers than investors
Turned down
angel round offer after very hard thinking (not an easy decision!!!)
SURVIVAL –
albeit very painful
Retained Belief
What we learnt
PREMATURE
SCALING is DEATH !!!
Mass market
adoption needs “whole solution” - Internalised Crossing the Chasm theory
A platform in itself
is NOT a “whole solution”
Without an
ecosystem, impossible to offer whole solution
Ecosystems need
money & muscle!!!
SLIDE 27
2010-2013 : Pivot From Platform to “Product”
Confidential, not for circulation 2010-2013: From Euphoria of Early Adopters to the Valley of Death Events
Revamped business
strategy & business model
CMS product and
market evolution
Some early wins BFSI sector,
especially in turmoil What we did right
Sharp Customer
segmentation
Sharp focus Pipeline building
What we learnt
Decrease
customer & segment concentration
Challenges of
LUMPY revenues
Pitfalls of
traditonal CAPEX driven ON-Prem license models
Lack of control
- ver sales &
conversion cycles
Inneficiences of
delivery & support processes
SLIDE 28
2013-2016 : Pivot AGAIN From “Product” to “Managed Service”
Confidential, not for circulation 2013-2016: Continuous learning from a product driven to service led Events
Converted CMS
proiposition to “Managed Service”
- ffering
On AWS ISV Tech partner of
AWS
Revamped sales and
delivery processes
Legacy clients
migration
New clients Expand to Retail
BFSI (Insurance --> Banks & NBFCs) What we did right
Managed the
transition
Bootstrapped Increased gross &
marginal profitability
Far higher client
satisfaction
>90% as recurring
revenues
Far smoother cash
flows
Decrease client &
segment concentration
ONLY player with
this capability What we learnt
Usage of product
is even more important than product
Far deeper
understanding our clients pain points and hot buttons
Pricing models Delivery & support
models
Repeateable sales
process till closure
Template driven
approach across client lifecycle
SLIDE 29
2016 and Beyond : Scale & Accelerate Value
Confidential, not for circulation 2016 onwards: Scale and accelerate value creation Scale CMS Business
- Deeper penetration across BFSI
- Expand to other distribution intensive verticals
- Explore other geographies
- Target 7X revenue growth by 2020
New fintech spinoff in Digital Lending
- Live customer processing 50K loans pm
- Experiment with multiple use cases
- As a service from Day One
- Create platform for rapid value creation
- Apply the learnings from CMS biz
SLIDE 30