Thus spoke Rajeev Purnaiya at last Sunday’s Open Coffee Club in Bangalore. OCC Bangalore is an informal fortnightly meet-up organized by Amarinder Singh, Ramjee Ganti and Vaibhav Pandey. It is aimed at getting together entrepreneurs and ‘intrapreneurs’ in companies to share business ideas and get informal feedback and mentoring.
This particular OCC was hosted by Hooeey.com. A couple of things happened at the event including a presentation, introductions to new entrepreneur forums, and useful networking. In this post I will mainly transcribe some of what Rajeev shared in his fascinating entrepreneurial story of Cyberbazaar and Hooeey.
I will cover Rajeev’s talk through the lens of several key aspects of entrepreneurship:
1. Team building and advisory board
Rajeev mentioned that during the formation of Cyberbazaar he and his co-founders found a natural alignment with key required roles. One founder had a good grasp on dealing with the telecom regulatory authorities, another was good at Sales & Marketing and a third had the financial expertise while Rajeev was the man on the ground managing everything. Other than the core team, Rajeev mentioned their leverage of an informal Advisory Board which even had mentors who could bring a perspective from related industries. Hooeey has also successfully conducted an internship program and graduated 25 summer interns in 3 batches.
Personal Note: I can strongly relate to the value added by interns to a company and its product development process. In my experience with interns from the IIT design programs in the past few years, I have felt that these interns have added a great deal of energy, perspective and value to the projects they worked on.
2. Product development – Cyberbazaar
Cyberbazaar was India’s first conferencing service provider. It understood the pain points of the IT industry in india especially how employees had to stay back in the office to make US calls. It was a pure phone conferencing service that could be run off any ISP and hardware which could be used by employees to work from home and communicate with their US peers. The service evolved to include into an online conferencing offering as well.
Rajeev and his partners thought Cyberbazaar was a good idea since liberalization had taken wings in India and the Internet was just getting its foot in the door.
When they started CyberBazaar, they first ran into the venerable Department of Telecom (DOT) and the VSNL and suddenly realized that what they wanted to do (phone conferencing service) was just not possible because of the VSNL monopoly.It took Rajeev and his team a good 3.5 years of full time product development before they sold a single unit. They learnt a lot about licensing, funding issues, dealing with bureaucracy and red tape. Rajeev felt trying to convince people in state agencies was a useful experience – it helped them modify their own assumptions.
3. Product development – Hooeey
Hooeey is a memory system for the web which is the next step to managing your web experience after bookmarking. It provides a longitudinal view of your browsing history.
Rajeev started hooeey by first looking into areas of the web experience which he felt could do with improvement.
(On Hooeey versus Google: Google showed a spotlight on the web history area recently and that has helped raise awareness about the need for this product space. Hooeey in general is more discretionary as a product and does not do auto-logging.)
One possible business model for Hooeey is to provide recommendations based on past browser history/usage and provide both consumer and enterprise productivity features based on the aggregated data collected by Hooeey. Hooeey is free for consumers but is looking to build premium services for customers and looking at licensing and tie-ups.
Personal Note: Hooeey is a good example of a service incubated in India which targets the global community of internet users. Its ‘design’ is neither Indian nor American but global - let no one say Indian companies cannot create good consumer web experiences!
4. Dealing with the government
While dealing with government agencies can be tricky, it is useful to keep simple straight examples at hand and explain things calmly. For example, when asked about whether Cyberbazaar would be able to keep privacy of phone conversations, they gave the example of how in India if passports are couriered, then the delivery person can always open and see the passport. The reason this does not happen is because the delivery person (and Cyberbazaar and other vendors) have no personal interest in the business conversation/transaction of the two parties they are connecting. Rajeev mentioned this seemed to have worked with the government. I appreciated Rajeev’s even handed description of working with government bodies.
Personal Note: Dealing with the government is never easy, but arguably, the government is also human and if one can build the right channels, the Indian government still remains the largest consumer and distributor for technology products and services
5. Partnerships with large companies
Cyberbazaar partnered with WebEx which had slowly grown to a $25 million company. It had already scaled to Chennai, Delhi, Hyderabad and was moving into niche horizontal services. In 2004, WebEx offered to acquire Cyberbazaar. As passionate as the Cyberbazaar founding team was, Rajeev felt that an entrepreneur has to be very dispassionate about selling and consider the inorganic growth opportunities and the value created for early employees.
One word of advice Rajeev shared was to get a good internal referral within the large company that one is targeting. A strong referral who believes in you and can put in a good word helps in working the channels within large companies. Also useful is getting people used to the service and then building a case with upper management based on feedback from the early adopters. One audience member mentioned that there are 3 types of people in large companies that entrepreneurs encounter: Influencers, Decision Makers and Showstoppers. It is important to build bridges with all three of them so the deal does not get stalled at any level.
Personal Note: Large companies are notoriously monolithic, narrow-visioned, and political. It certainly helps to be savvy and plan the political maneuvering upfront - and if required spend more time in drawing the network of influencer, decision makers and show-stoppers and plan a relationship strategy.
6. Market research
While formal upfront market research is a luxury for start-ups, they can always study the market by tapping research results from universities and other individuals. In case of web products, there’s already a lot of research on online consumer patterns that can be found on the web and this can be leveraged. Informal sources of data can be valid if entrepreneurs can make ‘reasonable’ conclusions from these sources. It may also not be a bad idea to take feedback from a close and knowledgeable circle of friends and family. Hooeey even takes product feedback from bloggers and visitors, whether about their site or the product. It is important to meet enough people in the trade.
Personal note: Using online and crowdsourced research services and leveraging university research is a great way for new companies to stay ahead of the curve. R&D on end users need not be siloed into an ‘innovation’ or ‘design’ department. If the right question can be framed, the Internet-Goddess will figure out a way to find out the answer in most cases.
7. Other tips for new entrepreneurs
Regarding whether one should work full time on their start-up or work part time and bootstrap on the side, Rajeev strongly felt that working full time on the startup was a decision that worked very well for them. Also, while you bootstrap it is crucial to network relentlessly with people within your industry, build your own ecosystem and learn to pitch your services in different settings.
Regarding WebEx acquisition, Rajeev and his core team conducted town hall meetings in different national centers to smoothen the transition. They felt the core team had a good opportunity with WebEx and all the founders also continues on with WebEx except Rajeev who moved out after 1 year of working as Managing Director of WebEx India.
Regarding product ‘originality’, Rajeev felt that every product idea or implementation in technology may possibly have an ‘alter ego’ product our there. The trick is to have a clear focus, get the basic market targeted correctly (before targeting the enterprise market), getting the viral online loops worked out and working closely with the online and blogging community. Early R&D including on Amazon S3 and EC2 helped Hooeey months before the product was actually built.
Regarding managing expenses, Rajeev stressed that many of the expenses incurred in the first startup were better managed in the second startup. For example, he optimized more on spending on capital goods and instead devoted part of the money to R&D. He also felt that the main difference in doing a startup the second time around is that there’s more patience and the ability to stick to the plan when things are not picking up. Otherwise as such he felt entrepreneurs are free to make new mistakes and explore new opportunities as well everytime they start a new venture.
Regarding facing crisis situations, Rajeev felt that entrepreneurs should not internalize all the chaos and struggle they feel. They can also externalize and open up to a larger community and build their support structure. Also, crisis situations are opportunities to precipitate your own thought process and reach new avenues of thought.
Regarding where things can go wrong, Rajeev felt that the biggest problems occur when assumptions are not validated and enough time has not been spent on the ground to understand how people actually work and what their real problems are (is the product solving the right problem?)
Personal Note: Entrepreneurs like Rajeev do not see the world in Black and White absolutes - they are able to navigate very flexibly through changing assumptions, shifting market preferences and wavering stakeholders. My personal experience is that one can gain a priceless amount of real world business experience by working with the right kind of startup.
Do you have your experiences as entrepreneur to share - do write a comment : - )
Entries (RSS)