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Snapdeal Saga- This is the first step towards Snapdeal’s merger with PayTM

February 23, 2017 Leave a comment

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Snapdeal laying off 600 people and the two founders forgoing their salaries has been dominating the startup news headlines since Wednesday. Although a lot of people took the news as a surprise, but had one been following the incidents that led to yesterday’s email from the founders, this should have been expected.

Lets see what happened in last couple of months. 

Jason Kothari was brought in to clean the toxic elements created during the tenure of Rahul Yadav as the Founder-CEO of Housing. To his credit, Jason de-toxified Housing to make it attractive enough for PropTiger to bite in for an ‘all stock deal’- which means peanuts.

Within a couple of days of the Housing-PropTiger deal, Jason was announced as the Chief Strategy & Investment officer at Snapdeal.

‘Strategy’ and ‘Investment’. 

Snapdeal along with Flikart has been finding it tough to get the right valuation for raising the next round of funds that both of them want to raise. While Kalyan Krishnamurthy has been tasked with cleaning up Flipkart, Jason has been brought in to clean up Snapdeal of the toxins and make it attractive enough for investors. Most of the money losing initiatives have either been shut down or are in the process of being shut down. The founders, in their email also stressed on the renewed focus on ‘core’ business and strengths. The ‘core’ here being e-commerce.

SoftBank- The thread that binds Housing and Snapdeal. 

SoftBank was the biggest investor in Housing. It is also a very significant investor in Alibaba too. Alibaba has been flirting with the idea of buying into or buying out Snapdeal for long now. Alibaba also has been the biggest investor in PayTM. And, to make things complex, PayTM also has an e-commerce arm. Alibaba would never like to invest in two competing companies (it might have done so in 2014-15, but today the story is different). Sometime back, PayTM did spin off its e-commerce platform into separate business from its payments business (or vice-versa).

Opportunity for Alibaba, SoftBank, PayTM & Snapdeal.

The current situation presents a ripe opportunity for all the parties involved. Snapdeal has an opportunity to set its house in order, Alibaba has a wonderful opportunity to enter one of the biggest e-commerce markets in the world via PayTM investment and set up a head-on clash with Amazon for the long pending battle of ‘South-East-Asia’ between Amazon and Alibaba (Alibaba has already started digging in its heels in the SEA market with the Lazada investment).

Not an Insider News. Not even a rumour. My own views.

All the events discussed above are either factual and have led to where we are today or logical and plausible extension of the same into the future. I strongly feel the events in the future will go the way I have spelled out. If not, the involved parties might want to use this article as a food-for-thought for chalking out their strategy.

 

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F*ck The Unicorns and Cockroaches, become a Business First!

December 2, 2016 Leave a comment

 

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Two years ago, everyone wanted to become a ‘Unicorn’ (the term that is used to refer to a rare mythical creature in general and to a billion dollar company in the startup world). Every morning there was news of one more startup raising a few or a few hundred million dollars in funding at a valuation, which you would have never heard of earlier. Fast-forward to 2016, the funding freeze has set in and there are people advising on how to become a cockroach startup. Scores of articles have been written on how to survive the funding winter till the sun rises again and investors start showering you with millions- not sure if that is going to happen anytime soon.

As a founder of two ventures earlier where I did not have any funding and then having led a venture of where I had a few million dollars at my disposal from Rocket Internet and now again when I am building a seed-funded startup, I have been through the grind. These few years spent in building startups have given me a perspective of how important it is to create a business out of an idea.

There would be millions of businesses across the globe. The range of size of these businesses in terms of revenues and employees would be astonishing. There are businesses run by the single-man show of a roadside street-food vendor and then there are the likes of Coca Cola and Boeing. How many of them have raised funds? The answer is – A negligible minority. One thing they all have in common is that they focused on creating sustainable businesses. I consider an idea to transform into a business when there are people willing to pay for your service or product and this number, at a certain size, can help run the business profitably.

As I mentioned earlier, I am currently running a venture that is seed funded since January 2016. At the outset, with my previous experience, I was clear to create a business and not a unicorn or a cockroach. Since last six months we have customers who pay form the service we provide and although we are small, we will turn operationally profitable I next two to three months. This does not mean that we do not want to become a hundred million or a billion dollar company- we do want to, but in a planned manner. Now that we have converted out idea into a business, there is confidence in the team, the seed investor and also the prospective investors on the growth path of the venture.

My advice to fellow startup enthusiasts and entrepreneurs is to have a plan to convert the idea in to business, focus on execution and then utilize funding to scale the operations. Do not startup just with the sole aim of raising funds. In the past many have done so, have even succeeded in raising millions but failed to survive- just because they could not turn into a business even after raising millions.

Forget the unicorns and cockroaches, let’s build businesses and enjoy the exciting journey as we do it!

[The writer is the co-founder and CEO of Feelance Co. and has been involved with the Indian StartUp ecosystem since 2009. He can be reached at harshdeep.rapal@feelance.co or harshdeep.singh.rapal@gmail.com ]

Where Entrepreneurs Succeeded Because Government Failed

January 20, 2016 Leave a comment

 

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This may come as a surprise to many but the government (both central and state authorities) has helped entrepreneurs in India in an unexpected manner – by failing in some functions, which it is expected to perform by default. I have been analysing the start-up ecosystem in India for some time now and have come across many entrepreneurs who succeeded just because the government failed to provide the required services to the citizens. Not only did these entrepreneurs step in to fill the gap, but they also provided livelihood and jobs to many others. In this article, I have tried to bring out 4 such areas where the enterprising minds found their opportunities.

1. Potable water: Every morning, we see scores of pick-up vehicles laden with plastic canisters supplying drinking water to homes and offices. The failure of the government to provide sufficient and quality potable water has provided an opportunity to entrepreneurs to step in. Over a period of time, supplying potable water has become such a lucrative business that it has created gold for companies ranging from billion-dollar corporations to small-time entrepreneurs – thus creating a multi-billion-dollar industry.

2. Power generators and inverters: The power situation in India is far from satisfactory and with the rising consumption of electricity, the gap between demand and supply is getting wider by the day. Many entrepreneurs have seen an opportunity there and now provide a number of solutions – from solar lanterns suitable for one-room huts in villages to huge power generators installed in factories and offices.

3. Security agencies: Security of life and property should be the prior concern of the government. But with the rapid rise in urbanisation across India, the security set-up has failed to cope up with the requirements of the growing population in the cities. The government agencies have failed to provide the required level of security and this has given a chance to private security agencies to provide services to home, offices, factories and apartment buildings. Thousands of people are employed by these private security agencies, providing security services to lakhs and more. So much so that a few Indian private security agencies have started taking up international assignments as well.

4. Sports: Of late, the best of the sports people in India do not come from government academies. Majority of the Indian boxers, who have been dominating world boxing, have come from the private sports clubs in Haryana. Similarly, Indian shuttlers, who have recently made their mark in world badminton, have all trained at a private academy in Hyderabad. And there are scores of private academies honing cricketers and other sports people in India.

Also, most of us are aware of the mess created by the government agencies in managing the Commonwealth Games. In stark contrast is the organisation and management of the Indian Grand Prix, held at Budh International Circuit or even the recently started Indian Badminton League. The success of such sports events have inspired many other entrepreneurs to come forward and they are now planning similar events for other disciplines as well.

But the Indian entrepreneurs’ ability to make the best of the situation (where we find below-average services) is not limited to the four areas I have picked up to discuss. If we look around, we will find many such areas where entrepreneurs have picked up the loose ends and provided the missing links.

So there is a ray of hope for other entrepreneurs as similar opportunities are waiting to be explored. Just look around and you might be able to identify the next big start-up for such services.

Startups & Technology come to the help- Of People & Terrorists

November 30, 2015 Leave a comment

 

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Two weeks ago we saw the deadly attack on Paris and closer home (India) the havoc caused by Chennai rains. While Facebook activated its Safety Check feature for the Paris attacks, Uber and Air BnB came out to help people travel to safer places and find a place to stay.

During the Chennai rains Ola came up with the innovative idea of rescuing people with boats and Oyo Rooms slashed rents and allowed group stay in the rooms on its platform. On many earlier instances we have seen people using Twitter to report live from the scene of accidents and attacks and also using Google Maps and other location based apps to track and inform on locations. There have been numerous instances of technology and the quick-moving startups coming to the rescue of people in distress situations.

With the pros come the cons.

The same technology that comes to the resume of people in distress situations also helps the terrorists and anti social elements coordinating with and connecting to each other. Post the Paris attacks we have seen Anonymous taking down the Twitter accounts helping recruit fighters for ISIS. The same Twitter which helps people connect to and help each other is being used by the very people who pose threat to our security.

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Toyota is known to build affordable and sturdy vehicles which require minimal after sales care. The Toyota trucks have been known to survive in the harshest conditions across the globe. Very good for the consumer. But, the same Toyota trucks have fallen into the hands of ISIS and other terrorist organisations and have caused much damage to humanity.

The advancements in technology are a wonderful thing. The unrestricted and easy access of these technologies is again a wonderful thing. But, the biggest question that arises with this kind of free access is that how do we ensure these technologies do not fall into the hands of people who intend to use it to harm humanity. I know there is no direct answer to this question. I am not even sure if such an answer even exists or not. But this is something we need to think as we move along developing new technologies and making their access free and fair.

 

 

Start-ups ride the Cloud!

September 8, 2014 Leave a comment

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Cloud computing services (SaaS, PaaS, IaaS) offered by various market players have over the years reduced the TCO for many Industry players. Although, about ten years ago when the cloud services started becoming popular, the reigning thought was that only smaller and mid-size industry players will move to the cloud. The bigger players will still prefer the ‘on-premise’ option. But, today we see even largest players in their segments availing the advantage of the cloud services to keep costs in control by paying-on-the go rather than incurring capital expenditure upfront.

‘Pay-as-you-go’ cannot me more beneficial to anyone else but start-ups. We all know that start-ups work on shore string budgets and would it will be foolish for them to spend on something which they are not using right now. Computing capacity is one such item on the list of start-ups. Why should a start-up pay for a storage space which it is not using? They would love the idea of expanding the storage space as their storage needs expand. This is one example of many instance where the costs for start-ups have been drastically brought down by the Cloud service providers.

A recent survey of 550 start-ups by BestVendor found out that majority of start-ups prefer using cloud-based resources for various activities- QuickBooks (71%) for accounting, Google Analytics (70%) for BI, Salesforce.com (59%) for customer relationship management, and Dropbox  (39%) for storage and backup. 

Reduction on up-front costs:

 A report on statistics on start-ups by O’Reilly Media shows that companies can save up to 30% in IT costs over a three-year period employing cloud resources versus on-premises equipment. This is a compelling proposition for the startups who would like to extract the maximum out of every penny available. The first three years are again very crucial years for a start-up. If the start-up is able to save 30% of its expenditure on IT- why should it think twice?

Fixed costs vs variable costs:

Every organization likes predictability. Larger organizations might be able to predict their future needs for various resources based on their empirical data of the past, but same is not the case for a start-up. One never knows how the demand for various resources needs to pick up (or go down). Cloud services help one to convert majority of the fixed costs on IT into variable costs. Now, that is what brings predictability to the forecasts for a start-up. One can ‘order’ storage space, processing space, number of email IDs etc on the go.

One of the biggest concerns earlier on cloud services was reliability of the provider. But, today, many big players in the IT industry today provide cloud services. The presence of Google, Amazon, Microsoft, SFDC etc. has brought a strong factor of reliability and security to cloud services. Majority of these companies have a strong focus on start-ups and its prudent for start-ups to explore these resources. Why not use these cloud resources on offer and save some precious dollars for your start-up?

 

X For Y: Try This Business Formula To Start Up

September 8, 2014 1 comment

Ever heard of an OKCupid for dogs? Or a LinkedIn for pets? Surprised? Don’t be, because I have heard about a start-up pitching itself as the LinkedIn for pets. There have been many successful start-ups that started as X for Y and then evolved their business model as they grew.

I am not a strong supporter of entrepreneurs pitching their ventures as X for Y as it kills the sense of innovation and originality, and creates more of a copycat or me-too feeling. Having said that and no more on the pitching part, the X for Y formula still holds water when it comes to presenting new business ideas and giving a sense of direction to new initiatives.

So how does one leverage this formula? There are two ways of doing it when you want to develop your own business idea. In the first case, take a small part out of a bigger business plan and create a niche around it. Out of a large customer base, try to target a segment with slightly different (or special) needs and build a service or product around these needs.

For example, OLX.in allows posting ads for almost everything under the sun. But there might be a specific set of customers with slightly different needs. For instance, there could be people who want to sell or buy antiques. Therefore, one can create a platform for posting ads to sell or buy these collectibles. Now what we have is a business idea that can be called OLX for antiques. Once the core is in place, the bells and whistles can be added as per customer requirements and additional features can be developed, depending on early adopters’ response.

The second way is to start a parallel business. If there is an existing venture providing a service to a certain set of customers and one feels that there is another service that can be provided to the same set or a different set of customers, the solution is to create a ‘parallel’ business. Zomato, as we know it, is a review and rating platform for restaurants. A similar start-up can be a platform for reviewing and rating some other service providers. In fact, there is a start-up in India that rates private coaching institutes. So, here is an opportunity to start a Zomato for X, Y or Z.

Before we overestimate the power of X for Y, I want to end on a note of caution. The X for Y formula should not be expected to churn out new business ideas. This is not as good or as easy as it sounds. Had it been so, generating business ideas would have been much easier than it is today.

I find this formula to be more of an idea ‘incubator’ rather than an idea ‘generator.’ This means, it can more effectively help one incubate and grow an existing thought in a new space instead of generating a totally new business concept. Still, go ahead and try it out.

 

[This article has been published online by Business Insider]

Small Businesses, Get Online. With Ease!

August 5, 2012 1 comment

By the year 2020, India will have the third largest internet population, behind China and the US in that order. But, India will have the ‘youngest internet user’ out of the three economies.

The current online retail market for all the products and services is estimated at $10 billion. E- retail accounts for 6% of the total online commerce and is valued at $0.6 billion today. By 2020, the online retail or e-retail will cross $70 billion when the total e-commerce will cross $200 billion. Now that’s a huge increase! No wonder e-retail start ups are mushrooming all over the place and getting funded too.

The current market is cluttered with a handful of online retailers such as e-bay, flipkart, yebhi etc, and then a large number of tier two players with varying amount of reach and product catalogue depth. But what do small retailers with physical stores do to get online? Majority of them just discard the thought of ‘going online’ because they find it cumbersome to manage a website and to have an IT team of their own. This void has been there since long until Google came up with the initiative – India, Get Your Business Online. But, it is a tedious process to “get onto” the Google’s platform.

Here is s start-up, that is helping small businesses to set up their own online stores and web-presence- at a very minimal cost and with no need to worry about the hardware, the software and human resources for the task. RetailEMall (www.retailemall.com), a venture of Creative Monks, helps small businesses set up their online store on their own domain / website in few clicks. The best part is, it is FREE to some extent. RetailEMall does not charge these businesses anything if they are not able to sell anything through their online store. Business need to make a nominal payment as per their chosen plan only for the months when they do sell online on their e-commerce store.

Using RetailEMall one can start his online store in few minutes and can make it available on their custom domain like www.mystore.com. Have a look at their demo store. In addition to it, RetailEMall platform also provides an option of setting up Facebook stores (complete e-commerce store on Facebook) in few clicks, this feature is avaialbe to all store owners on platform. Have a look at sample Facebook store setup using RetailEMall. As soon as one registers an online store on RetailEMall, one will get an access to his / her store administration account from where one can manage every aspect of store for instance, one can manage products, store details, order details, customers etc from their store administration account. Store owners can also customize the store’s look and feel without an codng ot technical skills required. Stores on RetailEMall can choose a template from available ones to change their store’s look and feel. Store owners can further customize the  color scheme of selected template without any technical or coding skills.

Another excellent feature and key differentiator is that, the products of all stores on RetailEMall are also showcased on the “E-Mall” store front (www.retailemall.com/mall) – the mall interface of the platform. Its something similar to Amazon’s Junglee.com. This mall interface connects end-customers to vedors. If a customer clicks on a product on the mall interface, he is directed to the retailer’s online store to which that product belongs. The platform also provides integration with online payment gateways like PayPal, ccAvenue, EBS etc for retailers to accept online payments. Yes, the retailer just need to signup with payment gateway and simply configure the provided details in his store admin account, thereafter they can start receiveing online payments on their online store.

RetailEMall is a brilliant attempt at creating a ‘get online’ platform for small businesses. The major positive point of the platform is that a business can get online in just a couple of hours. The ease of use is pronounced by the fact that one does not need any technical knowhow to manage the store once it is set up.

And, yes, the RetailEmall team is always there for support!

For more details visit: http://retailemall.com/store/