From idea to investment: startup success tips from 15 outstanding founders
Aspiring entrepreneurs looking for insights on how to proceed from trend-spotting to product-market fit will find a wealth of advice in the book, No Shortcuts: Rare Insights from 15 Successful Startup Founders. It is a practical blend of storytelling and business analysis across sectors.
The book is the result of an 18-month project, with interviews of founders such as Girish Mathrubootham, Nithin Kamath, Jaydeep Barman, Gaurav Munjal, and Tarun Mehta. They founded Freshworks, Faasos, Unacademy, Zerodha, Slideshare, Pulse, Aspiring Minds, Madhouse/Morpheus, Akosha, Ather Energy, Instablogs, GreyB, LikeALittle, Wingify, and Fashiate.
Nistha Tripathi studied computer science at the University of Illinois, Urbana Champaign, and dropped out of an MBA programme at NYU Stern to venture into the startup world as the founder of Festsy and Quizzlr. She returned to India in 2012 and founded Scholar Strategy, an education counselling company.
Nistha was a speaker at the Bangalore Business Literature Festival 2019, where her book was a finalist for the BBLF CK Prahalad Best Business Book Award. The winner was Alok Kejriwal’s Why I Stopped Wearing My Socks (see my book review here).
Focused on Indian entrepreneurs, the book is inspired by Founders at Work: Stories of Startups' Early Days by Jessica Livingston. The profiled startups are from a range of sectors: analytics, automotive, food, e-commerce, media, entertainment, and fintech. Some are bootstrapped, others are venture-backed; some have pivoted, others have shut down or been acquired.
The 15 profiles span 280 pages; each chapter ends with highlights of the entrepreneurial journey. Here are my 10 key clusters of takeaways from the book. See also my reviews of the related books Young Turks, Startup Land, Cut the Crap and Jargon, I Love Mondays, China’s Disruptors, The Prosperity Paradox, and Arise, Awake.
1. Spot trends and problems
Spotting trends, transplanting business models to new markets, and solving problems for oneself and for others are effective ways to begin the entrepreneurial journey. For example, Girish Matrubhoom worked in IT companies like HCL-Cisco and Zoho, and spotted an opportunity in helpdesk software when he experienced a shipping problem. Freshdesk was launched in this space, and drew insights about pricing and glitches from customer forums about competing products like Zendesk.
Zerodha founder Nithin Kamath worked for Reliance Money and became quite popular in many trading firms before spotting an opportunity for discounted flat-fee brokerage. “I had done 20,000 hours of work in this industry before even starting something,” he says, emphasising the importance of domain knowledge.
Paras Chopra was dabbling with tech entrepreneurship since his teens, and decided to work in online marketing. Spotting the difficulty for marketers in using Google Website Optimiser, he launched Wingify’s Visual Website Optimiser for A/B testing.
Successful businesses are built on need, persistence and rare insight, according to Prasanna Shanker, founder of “flirting” app LikeALittle. He spotted a pattern in the way FitFinder was taking off in the UK, and decided to replicate it in the US.
Husband-wife duo Nandini and Ankit Maheshwari were early trailblazers in the Indian blogging landscape, and their collaborative platform Instablogs (later renamed as Instamedia) raised funds from the Times of India group. It was later sold to investors from Dubai and Canada.
Tarun Mehta spotted an opportunity for electric vehicles on par with petrol counterparts. He founded Ather Energy as a vertically-integrated manufacturer of electric scooters, thus positioning himself in the tougher segment of hardware startups. Though the journey is long, the impact is large and barriers to new entrants are high.
The founders of Slideshare (‘YouTube for presentations’) spotted the opportunity for the platform during a Delhi BarCamp. They noticed that speakers were finding it cumbersome to use email and pen-drives to share presentations quickly.
Ankur Singla was a lawyer in London and returned to set up a legal-tech startup in India. He launched a platform for legal documents, but spotted an opportunity for consumer complaints redressal. His startup Akosha pivoted to HelpChat and then to Tapzo.
Jaydeep Barman’s love for food from his home city Calcutta manifested itself when he was working in Pune – he brought a cook from home to launch the first Faasos kitchen. It was kept running while he studied at INSEAD and worked in London, and then scaled up via online ordering and “dark stores”.
Sameer Guglani and his wife Nandini Hirianniah used to watch Netflix when they were living in the US, and decided to replicate the model in India. As compared to mature markets like the US, their startup Madhouse was almost four companies in one – handling logistics, call centre, payment, and content.
Narayana Murthy and Nistha Tripathi at BBLF 2019
2. Business model
Many of the featured startups grappled with freemium models and SaaS pricing points before using techniques such as benchmarking with salary levels and number of hours saved by using the product. Wingify used “value-based pricing” in this regard.
Unacademy decided to use a two-sided model to connect educators to learners, rather than making the content itself. Time limits were set on individual lessons, and tools were designed for Indian conditions such as low bandwidth in smaller towns.
Opportunities were spotted in areas like government exam preparation and teaching coding in Hindi. Monetising opportunities identified are paid events to meet celebrity educators for discussions, and subscriptions to save lessons offline.
Instablogs tapped high-end advertisers like Mercedes; it also had sponsored posts and syndicated content. SlideShare roped in advertisers through Google’s ad network, and also added SaaS-based subscription for content marketing.
Zerodha invested extensively in its technology platform, including reliable leased lines. “As we have scaled, we became a car that is going at 200 km per hour on a road that can only support 100 km per hour,” Founder Nithin Kamath jokes. The platform also has an uncluttered and easy-to-use interface.
Ecommerce tool Fashiate was based on deep learning algorithms to help shoppers locate items via image recognition. The founders zoomed in on the fashion sector where images were an important purchase consideration, and eventually sold the product to Snapdeal.
Rather than assembling electric vehicles with components from China, Ather Energy decided to build the overall product in India. Instead of just re-engineering existing products or re-conditioning them to Indian conditions, it nurtured the mindset and tenacity for full production.
Instablogs developed its own content platform instead of launching on others like Wordpress; this helped with greater control over features and business opportunities for monetisation. Analytics helped monitor traffic patterns and devise strategies such as cross-promotion, and dashboards helped contributors manage their content.
Slideshare polished its presentation player to deliver a fast user experience. However, for some time it did not pay adequate attention to its codebase which became shabby (‘technology debt’ from poor code management).
Varun Agarwal based the technology for Aspiring Minds on the science of adaptive testing along with educational psychology. Large data sets helped validate the business model for recruitment; the product was designed for Indian constraints like poor Internet connectivity. The product is scaling to other emerging economies with similar challenges in hiring and testing.
4. Understand the customer
Empathy and dialogue with customers have helped entrepreneurs become successful. For example, Instablogs fine-tuned its understanding of the needs of content contributors when it added citizen journalism features to its blogging platform. The founders tracked trends in news in sectors like gadgets.
Faasos tests new recipes regularly for ‘UMD’ factors – unique, memorable, and delightful. Feedback from customers is frequently collected. Freshdesk conducted a comprehensive survey on its customers to find out what features they liked and wanted.
5. Marketing and channels
Girish Matrubhoom advises figuring out which marketing channels work most effectively, depending on the context. For Freshdesk, BuySellAds turned out to be more suitable. Free users were tapped for viral branding, with ‘powered by’ messages.
The choice of name is also important; ‘Zerodha’ stands for zero obstacles (rodha means barrier in Sanskrit). Freshdesk was later renamed Freshworks. Zerodha relied on word-of-mouth publicity and never spent on paid marketing.
Wingify tested earlier product versions via posts on Hacker News, and published case studies of businesses effectively using its tools. Using free content in this manner improved SEO. Unacademy tapped celebrity influencers to add credibility to its platform, such as Kiran Bedi and Shashi Tharoor.
Instablogs interviewed celebrity bloggers to increase its own traffic; some of the interview questions were also crowdsourced, leading to further viral marketing. Slideshare promoted outstanding presentations on its home page, and also organised annual contests for the ‘world’s best presentation’, thus creating cascading traffic.
Ankit, of Pulse, turned negative news into PR when it was sued by the New York Times, apparently for not sharing revenues with publishers. Ankit contacted the Wall Street Journal for a story on how he had not done anything illegal, and the story generated a lot of publicity (eventually things were settled with NYT).