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Shocking! After Raising $34m in Funding, this CEO Got Arrested Yesterday!


 

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Travel startup Stayzilla, which announced halt of its operations last month, ran into fresh trouble with its founder and chief executive Yogendra Vasupal taken into custody by commissioner of police in Chennai and locked up in Puzhal prison, a source ET spoke to confirmed.

According to an email sent by cofounder Sanchit Singhi, Sanghi asked investors of the company to help Vasupal who went ‘missing’ or out of contact after Vasupal last confirmed his location.

Started in 2005, Stayzilla recently shut down operations in February to rethink its business strategy.

The company that had raised about $34 million across four rounds of funding, counts Matrix Partners India and Nexus Ventures Partners among investors.

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 ]

Casey Neistat’s Beme app in CNN basket, brings the YouTuber in-house

November 29, 2016 Leave a comment

CNN has acquired Beme, the social app co-founded by YouTuber Casey Neistat. As part of the deal, Neistat will lead the Beme team as a new standalone media sub-brand operating under CNN’s umbrella as executive producer, and all 11 members of the Beme team will join CNN.

Beme’s had an interesting history, with a founding vision of providing a means for users to share quick, short clips of video without edits, as a means of bridging the gap between live streaming and more polished YouTube-style creator production.

The social app actually launched in summer of 2015, but despite early success claims including half a million downloads and one million videos uploaded within its first few days of availability, things went quiet about the app following its debut – so much so that Neistat even posted an explainer video on YouTube a year after launch explaining “what the hell happened” to the app. This preceded a May relaunch as the app exited beta with many bug fixes and functional adjustments in tow.

Beme still never really found its footing, at least not with anywhere near the success of comparable social video apps like Snapchat or Musical.ly. Still, CNN is acquiring it with the intent of investing in the team and the product in order to create a new brand focused on a millennial audience, according to Variety.

Neistat had previously announced he would be ending his long-running daily vlog to focus on other projects, and now it’s clear he was talking about this tie-up with CNN.

Learnings From AskMeBazaar Shut Down


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Today morning I woke up to the news of AskMe shutting down its services leaving thousands of its employees and lakhs of its vendors and partners in quandary. It is not unusual for startups to stumble and fail. Globally more than 95% of the startups shut down.

AskMe was a different care altogether. The startup had raised $119m from Astro Holdings and other investors and were in talks to raise another $200m at a valuation of $1b. But then Astro decided not to participate in the next round. Things came to a dead end when Astro skipped the last Board meeting and AskMe wrote a letter to Registrar of Companies not to let Astro wind up their operations before clearing their dues (Approx Rs300 Cr).

I was surprised why it came to such a situation that the company had to shut overnight and lay off all its employees. The reason I found out was that Astro Holdings owned a whooping 98.5 % stake in the company. Let that sink in.

I am not sure what the founder were thinking while raising funds, but this is an insane amount of stake to be offered to a single investor. It does not leave room for other investors to have their say. In this case Astro did not want to participate in the next round of funding and I am sure the legal formalities would have got messed up for bringing in new investors of raising funds from other minority investors (if any).

The biggest learnings that the other entrepreneurs should learn from this incident are:

  1. Never have one single investor own an insanely large chunk of your company. 98.5%….never!
  2. When you get money in the bank, try working out the unit economics rather than burning the money at an insane rate. AskMe spend a large chunk of money hiring Bollywood brand ambassadors for TVCs. The same would have given much better ROI had the amount been spent on online marketing.
  3. In case such a situation arises, take care of your people. They trusted the startup ecosystem and toiled for your venture day in and day out. Never leave them high and dray by wrapping up operations overnight. I am sure the founders would have known the situations months ago. They should have told the truth to the employees and held them in faith to turn around things. Now the employees will not only lose the faith in the founders, but also the Indian startup ecosystem.

I failed in a Food-Tech Startup- Here are my five key takes from that failure.

February 27, 2016 2 comments

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I incubated and ran a food tech business (EazyMeals) for about 8 months and reached a volume of 100+ orders a day. I was in talks with a few investors as well to raise the angel round but then took a decision to shut the business down and write off the investment (why we did not pursue investors even after a commitment of $250K from the CTO of a billion dollar e-commerce company is a different story for a different day). But, before I shut down the business, it taught me quite a few interesting lessons about food tech sector. Here are some key takes:

  1. Getting Volume on Orders is Easy, Delivering the same is Tough: It is very easy to reach a number of 100+ orders a day. You may even reach 200+ in a short span of time but managing the preparation and delivery of these numbers is tough. We started the business in Indirapuram, one of the most densely populated areas in the NCR region. Food was great and prices nominal so getting initial traction was easy. We found out that bringing in new orders is not that tough. You need additional orders- Get on to FoodPanda. You need even more- Get on to Swiggy, Tiny Owl, Zomato etc. You still want more, invest in Google and FB Ads. Start Push notifications from your app or test SMSs. There is a lot you can do to increase orders, the problem comes in managing those orders. Reason being- whether it is 50 orders or 500, they have to be prepared, packed and delivered in a span of two to two-and-a-half hours. Where as a normal e-commerce company has a day or a couple of days to pack and ship a product, the food startups have just 30-40 minutes to arrive at the doorstep of the customer from the time he places an order. Believe me, its not easy. Customers do not care if you are a startup. Their expectations have been set at “30 minutes, else free” level.
  1. Focus more on Food than Tech: From the time the Food-Tech sector gained investor interest, there is a lot of focus “Tech” part in a food startup. My experience shows the focus should be more on “food” than “tech”. You can build a wonderful App or a website. You will have weeks and months to build and then improve it. But you hardly have any control on the quality of food when you are a small startup. The quality and taste is in the hands of the chef and what he does in those 10 minutes that he spends on the order. Those 10 minutes need much more attention than the website or the app. If the food tastes great, the customer does not care even if you do-not have an app or a website. He will come back.
  1. Focus on Retention than Expansion: Food is a business where one can achieve a very high repeat rate with customers if the quality of food is good, prices are nominal and service is within acceptable limits. The more your retention rate is, he lesser will be spend on marketing. Food is something which the person eats every day. Three times a day. Keeping your existing customers happy helps lowering the customer acquisition costs and in turn managing the unit-economics.
  1. Work on Unit Economics: Achieving unit-economics in food business in India is tricky. Customers want good food at a nominal cost. My venture was into low-cost-daily-meals. The average order value was around Rs100. The food quality was great, the repeat rate was high, we had achieved a volume of about 100 orders a day, but unit economics sank us in. While providing a meal at an average cost of Rs100, the COGS itself came around Rs40, the delivery per order around Rs18, if the order came via any of the food ordering platforms, the commission itself came out to be Rs15-18. We made a margin of around Rs30 per order (on COGS and Delivery) or about Rs1.2 lakh to 1.8 Lakh per month. This was not sufficient to cover for the salaries of one chef, two assistant chefs, a site manager, a cleaner and four delivery boys plus the rent for the kitchen and maintenance of the equipment.
  1. Use FOPs Intelligently to Your Advantage: Food Ordering Platforms are good for increasing the volume of orders. But, use them with caution. We were on four platforms- FoodPanda, Tiny Owl, Zomato and Hungry Buddies. These platforms do help you achieve volume of orders, but eat into your margins. On an average the FPOs charge around 16-18% commission and taxes. That’s a big chunk of your margin. I would suggest to use them for a period of time to build loyal customer base and then serve those customers from your own website or app. You will at least save Rs16 on every Rs100 that comes in.

Reflecting back, I feel I could have done many things in a much better fashion than I did. But will I go back and start-over again. No. But I thought these points would be of some help who has just started of is planning to venture into food space. These five are not the only points to keep in mind while running a food business, I am sure there are many others. But, they can be used to set some ground to build upon.

Real-Time Data from the Biggest Tech Companies

February 7, 2016 1 comment

Check out this wonderful platform for the real-time per second data from some of the biggest tech companies of the world.

Revenue & Profit:

Data  Stats:

2014- The year of e-commerce Startups!

December 30, 2014 Leave a comment

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2014 will be remembered in the startup ecosystem of India which was  completely dominate by the e-commerce startups. Be it the success of mega funding  rounds of Flipkart and Snapdeal or the price wars raged by the e-retailers on each other. Or, the sweet-bitter memories of the one-day mega sales and shopping festivals. Or, the protests by the small shop owners who claimto have been mauled by the e-retail giants. Love it or hate it- the year was that of the e-commerce.

The Indian e-comm industry has yet to learn a lot of tricks of the trade, but one thing is for sure, it is here to stay and will only grow big.

The potential for growth can be judged from the fact that the total size of the Indian e-retail revenue for the year 2014 is less than half the revenue for the Singles Day sale of Alibaba in China. Market size of retail in India is estimated to be at $600 billion a year. Which makes the e-retail industry less than even 1% of the total retail market (organized and unorganized). There are many gaps in the current market that need to be addressed and will be addressed by new players. The coming years will see this percentage share grow to at-least 6-8% which gives a huge space for growth for the existing players as well as a fertile ground for new startups.

With new investments flowing into the Indian e-retail industry, I also see consolidation happening in the market. The 2013 and 2014 also saw some consolidation happening in the e-retail space with Flikart acquiring Let’sBuy & Myntra and Amazon trying to acquire Jabong. The consolidation will gain momentum in next two years to eliminate some of the redundancy in the market.

All said and done, the next couple of years are going to see a lot of action in the e-retail space. Get ready for a lot of click-click!

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/