3 startup models that can get funded

It’s usually during fund raising that I hit reality. That’s truly when I understand what the market is telling me. Until then, I live in this cocoon with my users and my team, thinking only about how to improve the product and make our users happy. My early assessment of the market today provides new startups with a few options

I. A start up involving currently trending technology (Crypto currency, Blockchain, may be at the tail end of VR hype, or some out of space crazy tech only Elon Musk will understand)

If you have spent the last couple of years in any of these industries, you are best positioned to start something and raise a shit ton of money for a half decent idea involving em. No one really knows what the future is for these topics so they are looking for ideas from you.

II. A start up that can generate revenue with an excellent ROI at a low CAC.

This seems obvious but it isn’t for most founders because it’s friggin’ hard to get this done. Given — It doesn’t matter what industry but if the ROIs are great, VCs will be interested. It could be the most boring industry ever but like I said, it doesn’t matter. It could also do very little with tech but there has to be some tech involved. Ex: Stitchfix. They probably have a lot of back end and intelligence but what you see in the front end is very little. But, majority of their workflow is still offline merchandising, etc.

Now, if you are thinking of choosing this path, you have to consider the following:

  • How can I reduce my costs mainly engineering and support costs? Remote teams…not engineers from the valley…Cross platform technology…simpler tech solution….etc
  • How do I reduce my CAC? Network effects…untapped market (highly unlikely…the only untapped market are the ones that don’t pay much and aliens…may be Elon got that too)…partnerships…competitive pricing (this is again dependent on reducing ur costs)
  • How to choose a paying industry? Keep shipping..Keep experimenting. This, again, seems easy from the outside. But, I think you need to work in an industry for at least 2 years to understand who will pay and for what will they pay? From the outside, it seems obvious that we would pay $10 for an uber ride but uber had to spend a few years in the industry experimenting with black cars, etc to figure out what consumers will pay.
  • What’s the TAM? Again, the best of us go wrong here. We define TAM very broadly but usually the actual TAM is a part of what you think TAM is. For this, again, you need to know what they pay for existing alternatives or how much they will save with your solution and multiply that with the number of potential users.
  • How do you truly feel about the industry? Are you passionate about this industry? If not, none of the above will work.

III. A startup with mad growth of users (every founder’s dream)

This is still true. If you are able to get to a million users very quickly and then to 10 million quickly again, even if you are clueless about revenue, there are ton of funds out there for you. This usually has to appeal to the fun side of your users even if it’s a productivity app. Ex: Slack. it’s fun to talk to all your colleagues about anything. So, everything including design needs to fun themed. And emojis. Yes, emojis. (Or if the target audience is a small segment of users (ex: Insurance brokers, real estate agents), adoption % & revenue per user are key! This kinda goes back to II)

Leading, then and now

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If they are already better, we need to worry about making them awesome.

 

Very often, in the last 5 years, I have gone to sleep worrying about what I am doing wrong leading my team.  How do I get the most out of my team?  First of all, I don’t think Leadership qualities can be picked up from a book.  And especially, not from a book that was written more than 10 years ago.  Everything is different now.  People are different, teams are different, businesses are different, attitudes are different.  Obviously, the way you lead a team has to be different.  I find it more useful to read books written by young leaders of recent large companies than read about leadership in IBM or Apple or GE.

So, what has changed?

  1. Information is easy.  Everyone knows a lot.  A simple search on a topic can get anyone access to wikipedia, blogs and articles which can teach much more than what you know.
  2. This access to information and overall exposure have given everyone a strong sense of confidence.  This confidence is very useful if channeled in the right direction.
  3. Independent thinking.  Everyone has a view and an opinion now, which is obvious because if you have ‘x’ and ‘y’, you should have an f(x,y).
  4. People don’t react positively to strictness.  If you behave like Denzel Washington from Remember the titans today, you wont have half your team by end of the week.
  5. Opportunities are plenty.  People are not looking for opportunities anymore.  They are looking for a wonderful experience being part of a great team.

A few things a good leader should be doing today:

  1. Empower the team by listening to them.  Give them a problem instead of explaining a solution.  It’s safe to assume that they know more than you in their line of work. They can come up with better solutions that you can.
  2. Don’t hide anything from your team.  More information they know about the business, the better they feel working for the company.  Even if it’s bad news.
  3. With each person in the team having a strong confident personality, it gets very difficult to get all of them to think alike and work towards one focal point.  Confidence is good.  In fact, your job as a leader is to make them more confident.  There will be arguments and disagreements and there is no point fighting it.  On the contrary, this needs to be encouraged and made into a positive thing.  Turn these arguments into discussions by leading every meeting with one goal – to finalize on the best possible solution to a given problem. When a solution concluded by the team is added to your roadmap, it helps increase the entire team’s confidence.
  4.  If discipline needs to be encouraged, you cannot do it by saying it.  You can only do it by setting an example for them top down and bottom up.  You need to behave like the team you need and have a few people in the team behave the same way.  The rest of the team will follow suit.
  5. Responsibility is the main incentive.   This might not have changed in a while but there is no better way to show appreciation than giving more responsibility.
  6. Encourage the team to appreciate each other.  Today, appreciation from the leader is the easiest part.  But, it has become equally important to get appreciated by your colleagues.  Setting this culture is important.

 

Knowing this now, I don’t go to sleep worrying about leading my team.  I worry about other things 🙂

Success is a process

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It’s been a while since I last wrote something here.  It’s definitely not because of a lack of exciting events since my last post.  On the contrary, there were lots happening.  In this post, I would like to type a few things about building a great team and product.  One of the big realizations in the last 3-4 months for me is the very definition of success.  How does one achieve great heights in any field they are in?  Is there a rule of thumb?  Is it the ability to come up with new ideas?  What is it that makes an idea click?
There are founders like Elon Musk, who may define creativity as creating a hyper loop or creating a habitable colony in Mars and there are founders like Zuckerberg who may define creativity as making a channel for teenagers to share and like photographs on their phones.  Then, there are founders who just replicate another business in their own way and become really successful at that.  Personally, I had a big problem of involving myself in something that is not the first of its kind and used to look down on founders who did that, even if they are immensely successful.  Books and experts always say it’s not the idea but the execution that matters most.  It’s a cliche that everyone knows.  But, what is the difference between a bad execution and a good one?
Before I try to answer these questions, I want you tell you something that happened 2 months ago.  In February, me and my co-founder (Vijay) met one of our investors, Mr. Gokul Rajaram who is currently Head of Products at Square and previously created products like Google Adsense and Facebook Ads.  We discussed some of the issues we were facing with respect to product development.  But, we approached the discussion wrong.  We started with a quick demo of the product and started asking him questions on ideas for future product features.  He, instead, started asking us questions on our team, structure and processes.  The discussion went on for an hour and our takeaways were more useful than product ideas that we initially wanted feedback on.  Some of the important ones are:
  1. Every quarter, the entire company should have 3 main priorities.  It’s a company’s vision for the next three months, for a lack of a better word.  Every feature built, every process undertaken, every team meetings should revolve around these 3 priorities.  Define this right at the beginning and row towards that.  It could be something like “Increase the number of photographs uploaded on the platform by 10x” or “Make sure every car manufactured have the exact same dimensions”.  All these priorities should start with a verb.
  2. If you have a small engineering team, always hire full stack or train every developer to be full stack.  If you hire an iOS front end engineer, train him/her to build web services.  There should not be anyone in the team who say “I have done my part and I don’t know why it’s not working”.  If it’s not working, you better find out why and for that you need to be a full stack engineer.
  3. Good engineers have the best ideas because they know what the code can do.  So, have quarterly internal hackathon events to get the best out of them.
  4. A start up engineering team cannot have hierarchy.  It has to be fluid.  Every product feature should have a lead and this can be anyone in the team.  The lead is responsible for two things
    • Implementation, manage resources involved and reports
    • Track performance of that feature over a period of time for further tweaks until it’s successful.
  5. Daily code review.  The head of engineering should do code reviews on every update.
  6. Finally, document everything.
When we got out of that meeting, Vijay and I were blown away.  We went in to buy a TV remote and we came out with the knowledge of building a home theater on our own.  This was brilliant.  Since then, I realize more n more that it’s not the idea that matters.  It’s not what you do or what you wanna do.  It’s not even just the passion or perseverance to do something.  Of course, all of those matter too but the key difference is the Process.  Gokul obviously went through his career building great products not knowing everything but he was probably always on the lookout for flaws in his processes and kept improving on that.  Now that he has that experience and learnt from his mistakes, he can build any product.  It could be Adsense, Facebook ads, a car, or a rocket, anything.  I am sure I can still improve on the 6 points mentioned above in building a great team/product/company with time and there are probably many more best practices out there which people have realized.  We just need to keep looking to improve processes towards perfection and that’s the underlying secret.
Today, I am on a mission to make everyone in our small team think the same way, believe in the process and become leaders in their own domain 🙂

Music, a time machine.

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Today a founding member of the Eagles passed away.  I lined up a bunch of their best hits and it reminded of the good old times.  Somehow, life got very complicated immediately after.  Back then, there was joy in not knowing what’s coming up while listening to good classic soft rock.  An experience, when shared with friends who haven’t figured out their life either, made it a better memory than it was supposed to be.  My early 20s, at entirety, was filled with such memories.  Things changed, people changed, I changed.  I didn’t try to stop the change and welcomed it with blind enthusiasm.  Little did I know that those events will never happen again.   The Eagles, the Jefferson Airplanes, Queen, Tom petty, Sting, Fleetwood Mac, The Doors, Floyd, Dire straits, REO, The Who, CCR…the list goes on.  Put the record on, start your engines and you will never want the road to end and you will love the person sitting next to you for life.  Today, when I am 32 and listen to the same songs, I understand the lyrics even more.
As Boston put it
“I looked out this morning and the sun was gone
Turned on some music to start my day
I lost myself in a familiar song
I closed my eyes and I slipped away
 So many people have come and gone
Their faces fade as the years go by
Yet I still recall as I wander on
As clear as the sun in the summer sky”
It is more than a feeling, isn’t it.  All those days, these brilliant artists were warning us about a time we didn’t know was coming.  We live now, in a familiar time with new people close to us, lost yet found.  RIP Mr. Frey!
Learning to fly, but I aint got wings – TP      

A year of belief to a year for fulfillment

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In the beginning of this year, all I had was belief.  A belief that my business plan would be a company.  A belief that I can convince investors to write us our first check.  A belief that I can build a good team.  A belief that we can make a good product for real estate professionals.  Getting into Angelpad accelerator program was my highlight of 2014.  I had to uproot myself from India and move to New York in under 3 days.  A big thanks to my family, who did not see that coming, still raised no concerns.  In hindsight, it was the right call.  Changed my life.

This year started with me incorporating Agentdesks and preparing for the “Demo day” of Angelpad, followed by a bunch of meetings with investors. As expected, many highs and lows for 4 months.  Things started looking up in May.  We lined up our investors in June and closed the round in July. And the journey of Agentdesks started immediately.

I knew my first task at hand was to set up good leadership and a good team.  Agentdesks is not my first company and there’s one thing I learnt from my previous startup.  You cant do it all alone.  You need people who are better than you to get a startup going.  Enter Sanya Gurnani (COO) and Vijay Bharath (CTO).  Both have better experience than I do in their respective fields.  I already had 3 engineers prior to raising money. Mithran, Raghu and Devi had been with me since my previous company, Metroplots.  And, we now have a stellar team of ambitious and hard working colleagues.

Over the next 4 months, we put in a lot of effort in hiring the best people for Agentdesks.  Apart from skills, we mainly looked for attitude and how hard working they are.  Product wise, we only had 10% of the product we are supposed to build.  By the end of October, we had a solid team of engineers, designers and a customer success manager.

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We built 3 Agentdesks apps, one for each web, droid and iPhone.  Today, we have 40% of our product on each of these platforms.  The product is now highly engaging with our active users and we know what we should do to improve it further.  We believe, we are doing the right thing by focusing more on increasing engagement amongst our active users instead of reaching out to more users right from the beginning.  Fortunately, our investors and board think the same way as we do.  We have been getting mixed advices from different experts on what we should be focusing on but our priority is to make a product we love and our users love.  When we get there, we will start pushing the growth pedal.   

We have learnt multiple things along this short journey so far.  Some from making mistakes and some by awesome people who have made these mistakes before.  2016 is the year for us to put all these perspectives to work and execute our plan with our perfect team.  Our goal for 2016 is to make lives of a number of real estate agents simple and make them independent by building the perfect product for them- a new age mobile real estate CRM.

Wish you all a Happy and life changing 2016!

San Francisco | NAR | ACDC | Agentdesks | Man united | Healthy living

The last couple of months have been good both personally and at work.  As a product, Agentdesks has progressed the maximum in the last 2 months. As a business, we understand our clients a bit more than before.  We understand what they are using our application for, we understand what they need and most importantly, we understand what excites them.  We revamped our Android product completely and we are en route to doing the same with our iOS application.  Our engineering team is kicking ass, everyone’s up to speed and we have great leadership.

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We attended a big real estate NAR conference in San Diego.  We had a small booth, giving away our application to real estate agents.  More than what we gave, we got a lot of positive feedback on what we are trying to do.  There were a lot of funny competitors walking by our booth to find out what we were onto.

IMG_2752AC DC had a concert here in SF.  Thunderstruck, I was.  Easily, the best concert I have ever attended.  All my childhood, whenever I listen to ACDC, I tell myself “I wish I attended their concert”.  It was perfect.  Then in a couple of weeks, Sir Alex Ferguson launched his book in SF.  I had the privilege to attend the book launch and get a signed copy.  Two of the greatest events of my life, happened in the same month.

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My second love, Manchester United is doing well theoretically.  Everyone’s complaining about their boring style of play but I believe in Louis Van Gaal.  If he can turn around Ajax, Bayern Munich, Barcelona and the Holland national team, I believe him when he says it’s a process.  Obviously, he is no Sir Alex who could get Aberdeen to beat Real Madrid.  But, if we beat Leicester, we are on top of the table.  That’s not too bad.  There are no superstars in United, which is great.  The entire team is doing an equally good job.  No leading goal scorers but goals seem to be coming from everywhere.  That’s how an outfit should work.

Going back to Agentdesks, some of the key learnings for me in the last couple of months are

  1. While building product, it’s better to make a long term play rather than a quick win.  Build for the future.
  2. Client who find you are more likely to give you valuable inputs to build the product further than the ones you reach out to.
  3. Until you see a big spike in usage, there is no point in going after Top of the funnel growth.

My goal in the next few months is to take care of personal health by doing the following regularly.

  • Biking or jogging or going to the gym everyday in the morning
  • Have a healthy breakfast
  • Sleep by 11 PM and for 6+ hours, at least.
  • Take a break from work on Saturday and do something that makes me meet new people.

Learning to lead a team (Part 1)

As a founder, one of the first questions that popped up in my head was – “What kinda leader should I be?”  Then I started reading about how good leaders talk, behave, do things.  Read quotes about leadership.  Research Steve Jobs, Sir Alex Ferguson, Elon Musk…..the list never ends.  And of course, listen to Ted talks about it as well.  Simon Sanek has multiple 15 min monologues about this.  Some common basic tips are:

  • Hire well.  It’s important to have a good team to be a good leader.
  • Define the vision of the company clearly to everyone.
  • Break down the vision into actionable items.
  • Empower your team.  Actively engage them in team discussions.

Some things I picked up with experience

  • Stay healthy and create more mind space.  Stay away from distractions.
  • Prepare for the week every Sunday.  Have a clear plan of action.
  • Be detailed about everything.  Success is truly in the details
  • Be the hardest working member of the team.  Your team will respond to it.
  • Make it a personal mission to make everyone at work an expert at what they do.

But, one of the biggest takeaway for me is that there is no recipe to be a good leader or a successful leader.  There cannot be.  We all have different personalities.  We are all unique in our background, our experiences and the way we do things.  So, there is an element of personalization that’s unique to you while answering the question – “What kinda leader are you?”

For me, I’d like to know what’s happening with everyone in the team.  I like people taking ownership of discussed responsibilities and most importantly, making sure it’s done.  I take a lot of parallels from football (soccer).  I am a firm believer in everyone doing their bit to make the team successful instead of having a few rockstars in the team.  On a particular day, the opposition/competition can get the better of you but a strong defense can make you win the league.  In our case, a strong defense is having a team with a well structured plan chasing a big vision.

Setting up an Indian subsidiary for US companies and startups

At Agentdesks, we decided it’s in our best financial interest to have our engineering team in Bangalore, India.  As soon as we closed our seed round at Agentdesks, I traveled to Bangalore to recruit and set up our engineering team.  I truly believe it’s a good option for most startups in the Seed / Series A stage to think about setting up an engineering team in India (assuming you already have a good network in India).  I decided to write this blog to make it easier for other startups to do the same

Administrative

  1.  As a first step, I registered a wholly owned subsidiary of Agentdesks in India.  This involved a bunch of paperwork, which our accountant took care of.  Keep in mind, you should have at least 2 directors to start a subsidiary in India.  So, the second director can own 0.00001% of the company or something that insignificant.  It doesn’t really matter
  2.  We found a co-working space, that’s plug n play in Electronic city, Bangalore.  It just takes a day to shift.  I would advice not to waste time in finding a dedicated office space and furnishing it, etc.
  3. Starting a bank account – Pick a Citibank or any other bank that has Global presence.  We picked up HDFC Bank and struggled for a couple of weeks to get it going.

Recruiting and team management

Now, about setting up a team – Recruiting engineers is the most difficult job anywhere in the world.  It’s as difficult in India as it is anywhere else.  Engineers who join a startup are already taking a big step in their career to stay away from normal.  This means that they need additional assurance before joining your company.

  1. You definitely need a Head of engg, who can code, understand architectures very well and is a proven winner.  Recruit him/her first.  This person should be an experienced engineer who has led teams before, at companies that have scaled up fast.  He/she is your go-to person and an integral part of your co-founding team.
  2. Spend enough time in India explaining the vision of your company and why you are doing what you do.  Everything you believe in is easy for you to understand but it might take a while for everyone else to catch up on.
  3. In India, getting engineers who are really good at their job and want to work for a startup are really rare and expensive. So, interview them really well.  Most of them say they know everything but they really don’t.  As a startup, speed is the most important thing for you. So, take your time in getting the right engineers.  It’s alright to spend a couple of months to get the right engineer.  Don’t be in a hurry and settle for anyone.
  4. For us, I am not sure if this is a rule of thumb, websites like LinkedIn, naukri and a multiple other websites didn’t really work out.  Neither did HR consultancy firms.  All our hires have been through references.  So, as a first task, we really think you should spread the word out through your networks and your team’s networks.  When it comes to joining a team, most engineers make that call based on who the team already has.  If they are comfortable working with someone, the decision becomes easier.
  5. Once you have a good team, it’s very important for both teams (Indian team and your US team) to be on the same page almost every day.  There is definitely a layer of complexity added to the team structure because of the distance between the engineering team and the sales team.  But as a CEO, it’s my responsibility to bridge the gap.  I have a call every day with engineers in India and I keep everyone in San Francisco posted on what’s happening.  Once a week, both teams have a call too.

This is an ongoing process of learning for me and I will keep posting blogs about it.  If you are planning to set up a subsidiary in India and have any questions, feel free to shoot me an email at biju@agentdesks.com.  I will try my best to help you out  🙂

Making the best out of a VC meeting

VC Meetings
VC meetings

Over the last 2 months, I have had the opportunity of interacting with multiple VCs in the valley.  If you ask any founder actively fund raising, they will say it’s the most stressful, soul searching exercise with many cycles of ups and downs.  And they are right, it is.  As frustrating as it is, it could be a great way to get better at so many different levels.  All you need to do is listen carefully to every question and every point of feedback they give and get better at the following

  • Investor deck

When you make an investor deck, you are obviously assuming that’s the best deck to explain your business plan.  It’s important you think so because only then can you make a good presentation out of it.  But, also keep in mind, you gotta improve it with every meeting.  Include information that you gave a complete blank look for when some questions were asked.

  • Domain and industry trends 

You obviously know better than anyone else about your industry.  That’s why you have founded this new business of yours.  Right?  Wrong!  We don’t know the previous companies in the last 20 years that have come up in this space and have failed.  The VCs know why because they have invested in this space before or companies similar to yours.  They read monthly / quarterly reports from their investee companies that keeps them updated on industry trends.  So, sometimes it’s good to keep your ears open.  It’s useful information for you whether they invest in you or not.  It’s gonna save you a lot of time not making the mistakes you probably would have made.

  • Defining metrics that matter

This is obvious.  VCs ask you for specific metrics like cohort analysis or WAU/MAU ratio, CAC, etc.  If you dont have it already, make sure you have it in the next meeting.  It’s not just useful for raising funds but also to grow your business week on week.

  • Identifying parallels

Some VCs asked me what other startups in other industries are similar to ours.  I wondered why they ask.  The best that I can come up is because they want to know what other companies they have invested in is comparable to yours.  So that, they can better assess where you are in the growth cycle and what metrics are essential.  But, the most important thing is so that they know what challenges are you likely gonna face and if you have answers to mitigate that.  So, it might be useful to know other startups/companies similar to your in other industries

  • Greater trends and truths in the big financial system you can be part of 

One VC once forwarded one deck that they use internally to understand larger trends in the investment industry.  For example: Changes in human attitude towards technology or what large multi – billion dollar corporates would really pay for today.  What are they missing, etc.  They understand the shift that’s happening in Consumers and Businesses.  Most times, we founders are focused on the smaller 2 year / 3 year goals.  We focus on improving customer stickiness, improving design, adding features but sometimes we lose the larger picture.  These meetings help in understanding that and if you do, puts you in the path of larger success.

How Uber is helping startup founders and they don’t even know about it

that $15 is worth it
that $15 is worth it

I just moved to San Francisco and obviously I am dependent on buses, trains and Uber for the last mile.  Almost every uber driver I have met so far has had a deep understanding of the technology scene in San Francisco.  One of them even told me that they have read about Agentdesks somewhere and was gracious enough to recommend features that we might implement.

Here are some amazing ways in which they help Founders

1)  Recruiting

One driver in the city (his name was Alex) said he meets at least 10 software engineers every day.  When they are going to office in the morning, out for lunch, getting to late night parties.  He just rambled on names of tech giants and how each of these engineers hated working there and are looking for new jobs.  So, I asked him recommend Agentdesks to the next iOS developer who comes in and gave my card.  He said, he will do it.  What if all the drivers were recruiting officers for startups.  Think about it!

2)  Client acquisition

Another driver in San Mateo, has a lot of real estate agent friends.  He took 10 of my business cards so that he can pass it on to his friends.  Perfect, right?  Context – I run Agentdesks.  Agentdesks is a sales application for real estate agents.

3)  Ideas

When you discuss with San Francisco drivers, it’s usually productive.  Some great ideas came out of a conversation I had with a driver this week.  He said, I should think about providing our agents with insurance plans and make that part of their lives easy.  That will create loyalty as well.  And many more ideas!

4)  Fund raising

You pick an uber driver in Menlo park.  Rest assured, he has dropped 2 other founders in the same day at different VCs.  You can expect questions like “what’s your cap?” / “what are your biggest costs?”  /  “who is your target audience” from your driver.  Great practice!  Also, they recommend more VCs that you can meet.

5)   Uber pool

When you are in the city, always Uber pool.  9/10 you will meet another software engineer.  He/She could be your next engineer.

So, do it.  Uber everywhere.  Don’t buy a car.