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Posts Tagged ‘entrepreneurship’

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.
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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:

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.

 

 

Let’s face it: Neutrality does not exist for start-ups.


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There have been a lot of heated arguments going on against the telco’s plan to encroach on net-neutrality in India (and the world). Last couple of weeks, the internet was up in arms against the telcos and their internet partners. So much so that the likes of Flipkart faces a social media crisis and pulled out of the infamous AirTel Zero platform. One of the arguments being given was that it will be difficult, or rather impossible, for startups to compete against the big boys. Point taken.

But neutrality never existed for startups. Let’s face it.

Take the case of e-commerce startups in India. Majority of the big players are in losses. Huge losses. In e-commerce today, one of the major factors for survival is that how much loss one can bear. And, the loss bearing capacity depends on how much funding one has. The kind of money funded startups can spend on advertising, discounts and partnerships, the boot-strapped or self-funded can’t. Discounts and marketing is just one area. The funded startups can spend a lot of money on the best of the systems, can hire the best talent from the market and can create best of the workplaces for this talent.

Eve the internet today is not as ‘free’ or ‘neutral’ as we assume it to be.On the internet, we donot see what we want to see. We see what is shown to us. Organisations spend a lot of money on Facebook and Google ads to reach out to the customers. Again, the company with deeper pockets is ‘seen’ more.

The path for a new startup has never been easy and will continue to be so. Startups have always been innovating to beat the big boys. Some are able to, some don’t. That’s how it will be always.

Starting an E-Retail Venture in India: Five factors to Keep in Mind

September 9, 2013 1 comment

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Organized retail in India has been a grand success in the last decade-and-a-half. The rapid urbanization in Indian cities gave rise to malls, multi-brand and single brand stores. The increase in income levels across the population as well as double incomes of the new generation nuclear families contributes to the substantial increase in the disposable income of the Indian consumer. Of late, the physical infrastructure is not able to keep pace with the rate of increase in urban population, giving a chance for both the consumers and sellers to explore alternate options.

With the increase in accessibility of the internet in India, the retailers have started going ‘virtual’. The ‘virtual stores’ or the ‘e-stores’ scene is already bustling with activity in India and given the demand there is a huge scope of expansion for established players and also a scope for new entrants. E-retailing scores over traditional retailing in a number of ways. The retailer is spared of the costs related with the brick and mortar set up whereas the consumer gets the benefit of choosing from a wide range of products sitting in the comfort of her home thus saving on travel costs and time.

A country’s prospect for online retail success is closely related to how many people use the internet and how many of them are comfortable purchasing online. There are almost 120 million internet users in India and looking at the 2020 vision it could reach to 1 billion if it continues to grow at this rate. A quick look at the demographics of India reveals that 64% of the Indian population is in the working age group of 15-64 and 35.0% is relatively young, aged 15 to 34. This is the user group readily willing to adopt the e-retail culture.

Given these figures, the Indian e-retail market is a very attractive proposition. There are already many e-retailers in India and many are planning to set up shop here. Even though the market is attractive, every day there are stories of online stores going bust. This is because online retail in India differs in many aspects from the other parts of the world. I have listed below the top five factors which an online retail business needs to pay attention to if it wants to avoid failure in India.

1. The ‘hybrid’ shopping experience: The Indian e-retail market is not a pure-play ‘online retail’ market. It is gradually moving to and will firm up as a ‘hybrid’ model where the customer ‘orders’ the product online but ‘buys’ only after checking it physically at the time of delivery. Although, this happens more in the cases of apparel where the customer needs to try the fitting and size of the product before buying. With the customers already feeling comfortable with the model, it will spread to other product lines such as electronics and even consumables.

2. Reliable delivery and returns: One of the most important factors contributing to the success of an e-retailer is the on-time delivery of the products. It is a known fact that the supply chain infrastructure in India is not up to the global standards. So, an e-retailer has to ensure that either he sets up its own delivery network or partners with a trusted party. The delivery network not only needs to ensure the delivery of the products but also the returns in case of change of mind at the time of paying or in case of faulty goods.

3. Cash-On-Delivery payment mode: The unreliable delivery infrastructure in India helped ‘cash-on-delivery’ option gain popularity. The customers were wary of paying upfront in the wake of uncertainty of delivery. The COD option allayed the fears of the customers as the cash exchanged hands only at the time of delivery. Even with the improvement in delivery infrastructure, cash-on-delivery will always be preferred payment option. Consider the fact that an established e-retailer such as Flipkart, which has a robust delivery network trusted by the customers, receives 60% of its payments as cash-on-delivery of card-on-delivery.

4. Pass on the savings to the customers: The Indian customer is very price sensitive, especially in the case of branded products. She would check the price of the article at multiple websites or stores before buying it. The e-retailers generally save on costs which tradition brick and mortar sellers incur on the physical infrastructure. Majority of the e-retailers are already passing on these savings to the customers. This has helped building a perception that online prices of products are and should be lesser than the store prices. Any new entrant in the market will have to follow the trend.

5. Difficult to fit one size to all: Always remember that India is a country with 1 billion plus population which speaks 20+ major languages and boasts of diverse cultural and demographic characteristics. No organization to have uniform policies and tactics across the country and hope to succeed. Same is the case is with e-retailers. They have to customize the products and services according to the requirements. The mantra here is to be receptive to the feedback, sense the needs of the consumers, tweak your operations and serve the customers.

On a concluding note, although the Indian online retail market presents a great opportunity for retailers to explore, many factors need to be kept in mind before taking the plunge. The entry barriers are low and there are hardly any restrictions from the government agencies to set up an online store. This is bound to increase the competition. Only those who go to market with a customer centric approach will be able to survive and flourish.

Rise of the Angels- Why are Angel Investors so important today?


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Before the arrival of the computers and later internet, most of the enterprises were either based on manufacturing, trading or providing services. It took a good amount of money and time to take the idea from the drawing board into the hands of the first customer. Back then, a start-up could easily employ 20-50 employees even before getting its first customer. Even when the computers came, it was still very costly to acquire or lease a computer and build a team to work on it.

The last 15 years have seen the computers becoming affordable, internet reach wider and tools to ‘build’ the idea cheaper. The affordability of the computers and the internet, has drastically reduced the cost of creating a prototype and building a small team.

Venture Capitalists generally are process driven and have a long ‘Due Diligence’ process and like to invest an amount which falls in their ‘investing range’ and also would want a ‘Board Seat’. A start-up which requires just a 4 member team and softwares worth a couple of hundred dollars and a small place to work for a couple of months to create a prototype or ‘start-up’, might not want to go through the due diligence process or offer a board seat. And, yeas, the amount of money required to start-up and scale might not be that large.

Enter the Angels!

The Angel Investors generally invest much lesser amounts per start-up than the VCs. Angel investors are typically well-connected, wealthy individuals. The lesser amounts of initial funding required these days to start-up (which means a lesser risk to the investor in case the start-up fails to take off), has induced more investors in the start-up ecosystem. They have a much shorter or no due diligence process. For a start-up looking for small yet quick investment, Angel Investors become the automatic choice.

So, Angels are here. And, they are here to stay. The lesser amounts of money required to invest in start-ups today and the bigger risk appetite of the Angels, has made them very important to the start-up eco-system. They are the ones who germinate the seeds of entrepreneurship.

So what makes Start-ups prefer Angel investors over VCs?

There is no hard and fixed rule which separate the Angela and the VCs. Vcs behave like Angels and vice-versa all the time. Sometimes the investor participates in one or both the funding rounds- As an Angel or a VC. So, if you are ‘starting-up’ and are looking for investment, just check on the intentions of the investor.

Company vs the Product: Where as VCs come with a bigger investment, they are more committed to the creation of the company and guiding the entrepreneurs, the Angel Investor helps developing the product, or, as we say- prototyping the idea. So, if someone is looking for scale and growth, VCs are the ‘to go’ investors. The VCs also bring in their experience, contacts and also the early adopter customers. The Angels will just give you the money and generally do not involve in mentoring. So, take your pick. Carefully!

This is what Apple should be doing!

March 3, 2013 3 comments

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Apple stock tanked to $430 last week in the wake of concerns on the future of the company and its future range of products. The stock is 40% down from its peak.

There are rumors of Apple working on a ‘wearable gadget’ and has even filed for a patent application. But there are doubts on the success of this product. Also, this is going to be in the low price band ($100-$200), which definitely means lower margins. Also, going by the trend, Apple now will be spending much more on marketing its products than it did earlier. Times look tough for Apple.

Now what should Apple do? I have a suggestion.

It is high time Apple gets into Gaming. Apple, especially in the US dominates the UI for mobile phone and tablets (and to some extent the laptops as well). Given the ‘mobility’ of mobiles and tablets, Apple does have a great chance at Mobile Gaming.

Now, there are many games available in the Apple Store as app downloads. Yes, Apple is also making considerable amount of money from the downloads. How different Apple Gaming should be from the normal gaming Apps available at Apple Store? Apple should make the best use of the hardware available in its devices and introduce the ‘elevated gaming experience’- both online and offline, single player and multi-multiple leveraging the wi-fi and the 3G. Currently there are a few players in the mobile gaming arena but all of them either offer downloadable apps (Angry Birds by Rovio) with online integration or online games using the internet (Zynga on Facebook). There is also another category of devices such as the Sony PSP providing the ‘portable’ gaming experience. The true mobile gaming experience is still missing.

Now, if Apple is able to capitalize its dominance of the mobile UIs and its expertise in the hardware-software integration, it can usher a whole new arena for Apple to spread its reach and find a new revenue channel.