There are articles. And then there are stories: ones that connect to me as a writer as well as an individual; and readers seem to relate to – going by the sheer number of them who read, share, and cite those in offline and online conversations.
The following are my picks from among all the stories I wrote in 2017. They are ones that lived beyond the short span of news pieces, that can be reread to glean insights and reshared. Taken as a whole, they also represent some of the issues that mattered to me as an observer of the startup scene this year.
“If somebody is not paying you to build the product, you are betting that your product is something people might buy. Then, you are in the gambling business.” When Professor Saras Sarasvathy told me this, I didn’t get it at first.
This top scholar on the cognitive basis for high-performance entrepreneurship has been studying founders and startups across the globe for decades. She has hard data to prove that the most successful startups in the world have been funded not by VCs but by their customers, suppliers, or both. After years of study, she came up with a theory of entrepreneurial success called effectuation, which revolves around a few principles successful founders practice.
This article is about how founders can build a sustainable, scalable business using effectuation principles and escape the high probability of failure that most VC-funded startups risk. It is timely guidance when the market is correcting itself after the irrational exuberance of 2015.
This was one of the most shocking startup stories that hit India in 2017.
A founder I trusted shared with me murmurs about trouble at Stayzilla, billed as India’s largest homestay network with 55,000 stay options in close to 1,000 towns across the country. The company had raised around US$35 million from investors, including Matrix Partners and Nexus Venture Partners.
I reached out to several Stayzilla employees who I knew were laid-off. Many refused to discuss it, but a few spoke on condition of anonymity. A senior employee said: “You will get to know down the line.” I checked out over 500 listings on Stayzilla of popular holiday destinations and all of them sported a “sold out” tag. Also, for days there had been zero activity on Stayzilla’s social media channels.
Armed with all that information, I reached out to the startup’s founders and investors. They refused to comment. So I reached out to homestay owners who had properties registered on Stayzilla, and from them I got the news confirmed and Tech in Asia broke that story.
A few minutes after the story went viral, the founder reached out to me and so we published a second story based on the reasons he gave for the shutdown.
Two founders from 500 Startups’ portfolio of 1,800 companies have committed suicide; 120 out of the 600 firms backed by their first and second fund are now out of business. Three founders developed cancer. Khailee Ng, managing partner with 500 Startups, revealed all this at Tech in Asia Singapore 2017 conference and announced a new initiative to help founders stay fit mentally and physically.
Dubbed “a personal life management accelerator,” the program creates more human connections between founders and fuels peer circles that help them mitigate the toll of high stress that entrepreneurs bear.
Last July, I collaborated with Prasanna Krishnamoorthy, founder of accelerator Upekkha, to write a three-part series of articles on the software-as-a-service (SaaS) industry in India.
We began by looking at why India was emerging as a hotbed for SaaS companies. We traced it through the journey of Orangescape. The startup from Chennai – dubbed India’s SaaS capital due to the unusual concentration of such companies in the city – tasted failure twice before arriving at a winning formula, capitalizing on some unique advantages that SaaS startups have in India. Then we dived into what it takes to build a successful SaaS startup. And we rounded it off with new trends in SaaS, and how Indian startups are grabbing those opportunities.
If I were to pick one question I hear most from founders, that would be: who are the best investors to reach out to. That’s why we looked up the most active startup investors in India. Funding data from CB Insights for the first six months of 2017 had indicated that investment activity had picked up pace again after a steep fall in 2016 – and that helped.
Blume Ventures – one of the first homegrown VC firms in India – topped the chart with the largest number of early stage startup deals. Indian Angel Network, Sequoia Capital India, Accel Partners India, and Mumbai Angels followed closely.
One can’t get choosier when it comes to picking up startup profiles. That’s one of the hard lessons I have learned after writing about countless startups that failed to soar beyond the initial promise. Quantta Analytics caught my eye because it was into dark data analytics. That involves ingesting unstructured data – text messages, documents, email, video and audio files, and still images – even from the deep web or everything online that is not indexed by search engines, including anonymous, inaccessible sites. Then it mines insights for businesses and other organizations.
The startup, founded four years ago, is modeled after the secretive data giant in the US Palantir, according to founder Ritesh Bawri, who used to run a multi-million dollar cement company. Quantta is the global partner of data analytics company Optimus that has worked behind the scenes in the campaigns of several elected officials in the United States.
This was an acquisition that took me by surprise.
Within two months of Zarget’s inception in 2015, when its marketing automation toolkit was only a prototype, it had bagged seed funding of US$1.5 million from Accel Partners and Matrix Partners. A few months later, Sequoia too joined the other VCs to finance a US$6 million round for it. Zarget managed to get over 400 customers within eight months of launching its product as well. Then why did it go for a quick exit with Freshworks is the question that I tried to answer in this article.
One of Southeast Asia’s most valuable tech companies Sea filed for an IPO on the New York Stock Exchange a few months ago. Sea is the parent company of Garena, which owns one of the largest digital content platforms in Southeast Asia, largely around games, ecommerce business Shopee, and fintech company AirPay.
This is a detailed chat with Nick Nash, group president at Sea, about the company’s growth philosophy and expansion strategies.
I don’t know many startups in the online learning space that have come anywhere close to profitability. That’s why I went for this story when Springboard, a professional education provider, hit US$6 million in annualized revenues and turned profitable. How it achieved that, mistakes made, course-corrections, strategies that worked, and challenges are questions that I tried to answer in this article.
A few weeks ago, Springboard announced its series A funding round of US$9.5 million.
American tech giants are known to try and replicate their models in different markets. Amazon has played it differently in India from the very outset when local regulations forced it to adopt a marketplace model with no inventory of its own. From cash on delivery to heavy investments in warehousing and logistics, it has committed itself to an Indian gameplan with a highly empowered local leadership.
In this story, I got a chance to see at first hand a manifestation of this local strategy. While Amazon was one of the first to adopt robots, it has chosen not to deploy them in India, even as local ecommerce leader Flipkart has pushed ahead with warehouse robots. A visit to Amazon’s biggest warehouse in India and interactions with senior executives on the ground gave me a glimpse of how the global behemoth thinks about the Indian market.
Indonesia’s first unicorn startup Go-Jek’s engineering team works out of Bangalore, even though India is not a market for the company – not yet at least. Go-Jek set up its tech base in India after it acquired two Bangalore startups, C42 Engineering and CodeIgnition.
In this story, Go-Jek’s head of engineering Sidu Ponnappa – founder of C42 – took me through how the company achieved brutal scaling up and the unforeseen challenges that came with it. For example, the number of completed orders, excluding Go-Pay (Go-Jek’s payments product) transactions, were at 500 per day when the app launched in January 2015. That grew 900x to cross 450,000 per day by June 2016. The team had “grossly underestimated our growth rate.”
100 million app downloads, 13 million visitors every day, 200 million daily pageviews – it’s not often that one gets a behind-the-scenes look at how data is managed at that scale for actionable insights. Flipkart’s head of engineering Sandeep Kohli provided a rare insight into the work of data scientists at India’s leading ecommerce site that is in a fight for dominance with Amazon to win the next big market after China. From how the data is structured to asking the right questions, there’s something to learn for every entrepreneur dealing with analytics and customer insights.
This is the story of Upekkha, an unorthodox accelerator for startups selling software to other businesses. Most accelerators invest money into startups that they pick for acceleration and take equity against that investment. But Upekkha promises startups revenue outcomes through its 24-month accelerator program. If the startups do not hit the revenue milestones, Upekkha gets no equity – that’s the risk it underwrites.
To sustain itself during the wait for equity returns to kick in, Upekkha takes a percentage of its startups’ revenues. Earlier this month, Upekkha stepped out of stealth mode, revealing its first milestone: an 88 percent revenue growth on average for its first cohort of startups within seven months. The founder of this accelerator as well as founders of all its startups candidly shared details of specific scaling-up problems they tackled to hit the revenue milestones.
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