And then there was light…

There comes a time in every venture’s lifespan when it needs to scale the mountain, round the bend, bell the cat, bite the bullet – or in layman terms: Start running on its own cash flow!

There is only one thing that I can say for this event: Its a proud moment, and an EXTREMELY liberating one. FYI: We arent there yet – but god willing, we will be there by end of next month. We eat what we reap. We start generating positive (monthly) cash flow. We have enough commitments from our clients to become operationally break even next month.

Its been a long journey – and could have taken much longer. It started when there was the ‘Inception’ of an idea in my head by a gent called Krishna Jha. Krishna is a partner at TelNet ventures and a previous entrepreneur with experience of building and exiting a business in the telecom space. I had met him at Proto and had interacted with him many times. He had come to our office a couple of months back and at that time, we were clocking Rs. 40K per month. Krishna’s advise was to triple the revenues – Bring it upto 120 K. His words were “Simulate a kick in your balls. Right now – you are running on the cushion of investment – Simulate a scenario that you dont have that much cushion.” The idea stayed with me – and morphed into a bigger hydra than what Krishna had suggested. Why some? Why not NO cushion?

We thought about the ways and means of enhancing revenues to become operationally break even and yet keep growing. We thought hard but not for long. We did only two things:

1. I went back to our investor (who had committed SGD 1Mn of which we had utilized 15%) and said with a lot of difficulty: “No more money please. We have decided to live off our own produce. No more ‘Khairat’”. I think the investor was a bit taken aback at first – it isn’t often that they hear the entrepreneur telling them that we don’t want your money any more. The fact that he appreciated it much more became clear when he made me a director on the board of Regional Airports Holding International Ltd. (RAHI) <– that’s another story.

2. We got out there and started gunning for business. Raised the prices, went back to our clients and thankfully our product was good enough for them not question the raise in prices – but rather they came out and said give us 10 times more! We obliged. One client went from Rs. 20K to Rs. 200K in one month flat. Next month – they want to double that!

We are still a bit away from complete operational break even, but the ‘feeling’ that I am already getting is one of sheer exhilaration – and frankly, I cant explain it enough in words. Its a mix of the bubbles in the stomach & the twitching smile &  the jump up high & the scream out loud feeling.

So here we are: Some extremely marquee names as paying clients. Currently integrating on top of a unified telecom platform in India. International launch as a VAS service on top of probably one of the most innovative operators in the world in 2 months. 3G launch on an Indian operator (signed, done – launch whenever it happens). Brought down the sales cycle from 5 months to 1.2 months – and focusing only on the VERY big clients. And a situation where we will break even operationally in a months time. With all of 9 extremely dedicated and proud people.

Its too early to start taking bows. Its too early to break out the bubbly (we will have a nice session the day we actually get to operational break even). It is actually time to start taking stock of the much harder road ahead. Time to think about scaling while maintaining your own cash flow and business. When someone asks me about investment – I say that yes, we are looking to raise funds. Not because we wont get there, but because with the right ‘kind’ of investment, we will reach there faster.

A reputed VC recently told me: “Thats quite a bit of progress for a year of operations”. My response was “Not enough. Not nearly enough”.

Watch this space!

M

From the Trenches: Launch – 10 days!

Gents and ladies,

Not sure how many of you have actually experienced the exhilaration, thrill, fear, anxiety and enjoyment of waiting for the magic door of your product / service / shop to open up publicly and your product fixing all that ails this world! I have – and while the feeling cant be shared here, the experiences can be. This is a first in a chain of posts where I will discuss what I learnt while hunkering down in the trenches with my comrades! Here goes…

Fellow entrepreneurs: There are a few ground rules that you just have to accept. I learnt them the hard way – and here they are, along with how we tackled them :

1. Murphy will strike every single f*!$&ng time: Whatever can go wrong, will definitely go wrong. In our case, the list is quite long! The PRI card that we purchased was the wrong one – and didnt fit our severs in Mumbai (We are in Noida). The PRI line didnt get installed. Once it got installed, it was not activated in the right manner. The technology had bugs in it – which didnt want to go away. Our web guy left us 10 days before the launch. Our clients were breathing fire down our neck for delays that were beyond our immediate control. The invite functionality was not functioning properly etc. etc. All this carried on till 3 days before the launch! I learnt a lot from this:

a) Allow people to set their own deadlines, and you accumulate them to get to a single date in time for launch: Allows people to own their stuff and get things done. You need to give direction – not dictate every thing that has to be done (I say this today – even though I know that I tend to get down and dirty far too many times for my own liking).

b) Allow for a buffer in the deadlines: Things will go wrong. Definitely! So dont get yourself all worked up if you miss your deadline by a day.

c) Look at the big picture: Set 3 – 4 key objectives that you want to get validated / met by X date – and get everyone to focus on delivering them. (We did that – but after the launch)

d) Always be ready for a plan B: When our web guy left, we were left pretty much high and dry. Nothing much that could be done. Noone could join within a couple of days, and we didn’t want to outsource at that crucial juncture. Two things happened: Sandip (a true telecom tech guy) stepped up to take on the web tech as well while Arpit took over the actual product side.  Surprise surprise – they did it. We had to get a design company on board + get some simple coding help from outsiders – but it didn’t hold us back. We didn’t buckle. We adapted. More expensive? Yes. More taxing? Definitely! But done. The great thing about Plan B’s is that if they usually go better than you expect them to! :-p

2. Do yourselves a favor – set yourselves up for a fall: Everyone thinks that the day you launch a service, you will get 10,000 users and by the end of the first month – your service will be at 100,000 users (at least)! Right? Err… not really. My experience shows that there are a lot of things that have to go right for everything to go according to plan. Your PR plan, your social media strategy, your early adopters, your product itself and at least 20 other things. It wont happen on day one. Not saying that it wont happen at all – just never on day one. Its a marathon – not a sprint. Get ready for the long hard ride of customer acquisition. Plan for the best (100,000 users), but be mentally prepared for the worst (1000 users). <– btw these are just examples and not our metrics. We have seen a steady growth happening regularly since the time of launch. It seems much more like a recommended sign up rather than a forced one. A multiplier effect – that’s what we have going right now. Bigger challenges lie ahead: How do we engage everyone to ensure that the multiplier effect grows.

3. Go for the WOW: We did this – but not in a planned manner.  It happened more accidentally really.  This has two elements:

a) Remove as many bugs as possible: Test, test and more tests. We did this – but not in a planned manner. We should have had an excel sheet where we had the test cases etc, but we didnt for the first time. We had ONE sheet, where everyone consolidated all the bugs they saw – and then someone was responsible for fixing them. It should have been – 5 different people testing out 500 use cases, and getting the results across to the guys who have to fix it. There will still be lots of bugs  that will crop up, but its best not to have them in the core process / experience of the product.

b) Decide on the WOW bit: Think consciously about ONE wow factor that can be spoken about. Is it the seamless buying process, the interface, the ajaxing of your site – whatever. But it should be there. Not from a perspective of getting you more customers – but basically covering your ass from the downfall that you will likely have in case you dont have that WOW effect. Fundamentally – as a startup, you need the wow to remain at the same place you are at right now!  In our case – it was the registration and search / connect process. We tested that at least 300 times before saying – yes, that works. We didnt really plan for it to be wow – but when people told us that they really liked the immediate welcome call or the personalized IVR functionality – we had found it.

4. Enjoy the moment: We didn’t have a launch party, and I personally regret it. Everyone worked bloody hard to have the product up – and we all got extremely engrossed in the stats post that to realize that we had all come a long way, and in a very short time with very very limited resources.

- Here was something that large companies wanted (We have ~30 corporate clients now).

- Here was a product that was appreciated by almost everyone who interacted with it (We have been used by ~3000 individuals till date).

- Here was a concept that wasnt there anywhere else.

- Here is something that could solve all the ills of the world! (Or so we believe – and you will too (for your product / service)).

Dont lose that moment. No one knows whats really in store – but at that moment, the world was ours. Come to think of it – it still is! So with that – I am going to sign off, and actually organize a party tonight.  To celebrate the experience of creating something of value (to some people) from abso-f*&!ing-lutely nothing. To celebrate the fact that we are all here in the trenches together… and loving every minute of it!

M