Idea/Opportunity → Product/Service → Company Tracing the Trajectory of the StartUp Roller Coaster! ENT–203 Part I: Oct 3, 2016 – The Journey Part II: Oct 6, 2016 – Challenges & Learnings Dr Ram Ramdas, Founder & CEO - Herald Logic (a SINE Graduate Company) +91-98205-38685 / ram.ramdas@heraldlogic.com
Aim to start being “Minimally Viable”... Confidential, not for circulation
...Aim for “the Good and Not “the Perfect”! Confidential, not for circulation
...Continuous Discovery, Iteration, Validation Confidential, not for circulation
… “Failure”, Rejection & Being Misunderstood 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... "Invention requires a long term, deep rooted willingness to be misunderstood by the world" – Jeff Bozos Confidential, not for circulation
… “Failure”, Rejection & Being Misunderstood "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 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 Confidential, not for circulation
Maximize chances of “Healthy” SURVIVAL... 20 months: Average Time Between a Company’s Last Funding Round and Death Research based ONLY on FUNDED startups! Many more die without funding! Confidential, not for circulation
...Maximize “LEARNING” https://steveblank.com/2010/01/25/whats-a-startup-first-principles/ Confidential, not for circulation
...and Build a “Very Valuable” Company Dharmesh Shah Founder HubSpot Confidential, not for circulation
Four Steps to Epiphany DISCOVERY -> VALIDATION -> EFFICIENCY -> SCALE Confidential, not for Confidential, not for circulation circulation
LEAN Startup – Iterative Cycle Confidential, not for circulation
Wisdom of Ozzie the Oracle – Learn, Iterate, Pivot From Selling the Wheel by Jeff Cox Confidential, not for circulation
Business Model Canvas – (eg Zynga) Confidential, not for circulation
Scale ONLY A.F.T.E.R Learning Confidential, not for circulation
Consistent progression across the 4 Stages Confidential, not for circulation
“Crossing the Chasm” a.k.a. The Valley Of DEATH !!! Geoffrey Moore - “Crossing the Chasm” ; summary courtesy: Henrik Berglund, Chalmers University of Technology Confidential, not for circulation
“Crossing the Chasm” - Types of Customers Ilustration of Gmail -> http://blog.mailchimp.com/major-email-provider-trends-in-2015-gmail- takes-a-really-big-lead/ Confidential, not for circulation
Understanding the “Chasm” and the “Valley of Death” Confidential, not for circulation
Strategy for Crossing the Chasm Confidential, not for circulation
Omaha Beach : D-Day Normandy Landing WW2 https://en.wikipedia.org/wiki/Omaha_Beach Confidential, not for circulation
Scaling to be a Very Valuable Company 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/ Confidential, not for circulation
Part 2 Challenges & Learnings from the the StartUp Roller Coaster Ride The Herald Logic Story
Timelines of the Journey 2016 onwards : Accelerate MORE VALUE. Replicate the CMS business model for Digital Lending – Birth of WonderLend Hubs 2016- : Accelerate value; SCALE CMS 2013-2016 : Pivot Again : Product --> Subscription Service 2010-2013 : Pivot: Platform --> “Whole” Product : Channel & Distribution Management 2004-2010: Valley of Death- Right inside the Chasm !!! 2002-2004: Genesis of the IntelliRADAR Platform - “Just ADD DOMAIN” 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 Confidential, not for circulation
2000-2002 : Idea → Platform Events What we did right “Raw Engine” Bootstrapped Stanford Global Kept Costs < Disruptive Tech Revenue What we learnt FRUGAL award Multiple free & Outsourced “non- Understanding paid POCs, paid core” activities when to say NO Close to ZERO pilots Selective, Founder Team Overheads conscious Balance in expansion experimentation Continued in Founding Team Absence of Retained FOCUS Incubator Business model Engine –> Kept our BELIEF canvas map Instituted sound Platform (pivot) Chasing investors Received an hiring practices early is a mistake Culture & DNA “attractive” Turned down acquistion offer acquisition offer !!! 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 Confidential, not for circulation
2002-2004 : Birth of Platform Events What we did right Platform Remained in What we learnt development KRESIT Incubator Sign up FIRST Built some cash 1 customer NOT REAL PAYING surplus EQUAL to Market Remained customer (US Chasing investors Hedge fund) FRUGAL early is a waste of Multiple free & Started focusing energy paid POCs, paid on developing our Hasty conclusions pilots Business Model about our market A Few “serious” Retained FOCUS and customer investment & BELIEF on core segments discussions vision Inital business Multiple “semi- model Turned down M&A serious” Dropped “BAM” as investment offer !!! a market Angel Money: discussions Dropped US focus Another M&A offer Customer Angel money Partner One Qualified received Angel 2002-2004: Genesis of the IntelliRADAR Platform - “Just ADD DOMAIN” Confidential, not for circulation
2004-2010 : From Early Adopters → Chasm (Valley of Death) What we learnt Events What we did right Multiple paying Proved value of customers in multiple platform in PREMATURE domains multiple domains SCALING is Multiple releases and Enhanced DEATH !!! enhancements of robustness of Mass market platform platform adoption needs Entered into a Global Chased marquee “whole solution” - Alliance customers than Internalised Scaled “rapidly” investors Crossing the Huge Cash Losses Turned down Chasm theory Took on significant angel round offer A platform in itself External Debt after very hard is NOT a “whole Some founders thinking (not an solution” branch out; another easy decision!!!) Without an SURVIVAL – joins ecosystem, Angel round albeit very painful impossible to offer Retained Belief termsheet whole solution Ecosystems need money & muscle!!! 2004-2010: From Euphoria of Early Adopters to the Valley of Death Confidential, not for circulation
2010-2013 : Pivot From Platform to “Product” What we learnt Events What we did right Revamped business Sharp Customer strategy & business segmentation Decrease Sharp focus model customer & CMS product and Pipeline building segment market evolution concentration Some early wins Challenges of BFSI sector, LUMPY revenues especially in turmoil Pitfalls of traditonal CAPEX driven ON-Prem license models Lack of control over sales & conversion cycles Inneficiences of delivery & support processes 2010-2013: From Euphoria of Early Adopters to the Valley of Death Confidential, not for circulation
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