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Posts Tagged ‘start up’

Mix-Up! Users Uninstalled Snapdeal Instead of Snapchat.


 

 

Indians were outraged at the ‘alleged’ comment of Snap Inc. CEO, Evan Spiegel that Snapchat is not mean for poor countries like India and Spain. well, no one is sure that whether he said it or not. But just this allegation was enough for the every charged Indians to start berating the company and its CEO. Thousands of users uninstalled snapchat app and gave it a one-star rating on Google Playstore. The outrage was so high that the Snapchat was reduced to a one-star rating on the store. Bad.

The worse was that many un-initiated souls who did not even know what Snapchat is and what it does, started uninstalling what they had on their phone- the Snapdeal app.

Now, that act borders on stupidity. This is the second time when Snapdeal have had to bear the users’ wrath on the playstore. The first was when its brand ambassador Amir Khan’s wife made a statement which did not go well with the Indians. The outrage that time started with boycotting Amir but then led to the brands that he endorsed.

While I reserve my opinion for a later blog-post, but this is a sad case where one company suffered because of someone else’s ‘alleged-not-proven’ fault.

 

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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 ]

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.

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.

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!

Whats new with Mega?

January 22, 2013 Leave a comment

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Internet entrepreneur- Kim Dotcom came up with his latest venture a couple of days ago- MEGA. Mega is a the reincarnation of Megaupload- the cloud storage service that was declared an outlaw- accused of facilitating copyright violations and piracy. The site was shutdown in wake of an ongoing investigation while Kim is out on bail. In its heydays, Megaupload boasted of 50 million visitors daily and accounted for 4% of Internet traffic before it was shut down in January last year.

Dotcom launched the “Mega” site with a lavish party on Sunday, the anniversary of his arrest on charges related to Megaupload. Half-a-million users registered for Mega within 14 hours. The publicity for the new venture generated so much interest among users worldwide that within hours Mega was facing server troubles and Kim offered his apologies on Twitter.

So what is different in Mega? Mega users will have access to 50 GB of free storage space and will be able to share their files with other users. This is ten times the free storage space offered by Google Drive and 25 times the amount of space offered by Dropbox.

And what is the difference between Mega and Megaupload? Mega “enforces” encryption on the data being uploaded. This means before the data is loaded on to the Mega servers, it is encrypted and the encryption key is not with Mega. This means, Mega can not and will not have ‘access’ to the data. The encryption is more to save Kim and his company of accusations of copyright violations than for the benefit of the users.

I bet the investigation agencies will be already trying to find holes in Kim’s vest and I can only speculate whether they will be successful or not in finding one, but, I consider the launch of Mega and the kind of attention it has managed to draw nothing less than dramatic. Wish you success Kim!