I am personally a big fan of podcasts. They are very convenient to get my daily dose of inspiration — especially when I’m working out or commuting. Over the years, I have been listening to a bunch of different podcasts but a few of them have been extremely helpful.

This got me thinking why not a podcast aimed at first time entrepreneurs in India — INSIGHTS Podcast Series is aimed at this target audience. The goal is to bring them up to speed on common issues that first time founders face and to help them avoid known mistakes on their entrepreneurial journey.

There are some amazing podcasts already available that I highly recommend founders to listen. Some that I listen to regularly are:

Reid Hoffman’s — Masters of Scale

Y-Combinator’s — Startup School Radio

NPR’s — How I Built This

But, none of these are focused on Indian entrepreneurs. Many lessons from the podcasts above are very much applicable to entrepreneurs globally, but there are some nuances of each geography. The aim of our Insights Podcast Series is to address some of those issues that are more specific to India more sharply and to bring out stories from Indian founders and investors so that its more relatable for Indian founders.

We have kicked of the series with a chat with my partner Shekhar Kirani that you can listen to here:

We have covered the topic of “A good founding team” in this episode and over the next couple of episodes, we will hear on the same topic from Rajesh Yabaji (co-founder and CEO of Blackbuck) and Sriharsha Majety (co-founder and CEO of Swiggy).

Over the next few months, we plan to cover common topics that are top of mind for most first time founders. For each of these topics, we will hear from an experienced investor on their perspective and then from one or two founders on the same topic. Some of the topics we plan to cover are: product-market fit, various aspects of the market opportunity, growth phase of the startup, building successful teams, fundraising and exiting startups — just to name a few.

We would love to hear from you on what topics, as an Indian founder, is top of mind for you, that you would like us to cover through the INSIGHTS Podcast Series. Please share those topics as a comment below or tweet us at @Accel_India

In my previous blog, I wrote about what products/services are online in India. In it, I referred to the Indian Urban Mass as coined by Goldman Sachs in their detailed report on India. It is a very insightful report and I’m including a couple of images from that report in this blog.

At this moment in time, India has north of 300M smartphone users as per various publications (here’s one report by the Economic Times). With the launch of Reliance Jio, and subsequent mobile data price wars, the average price of data in India is one of the lowest in the world. What this means is there are 300M+ people in India capable of transacting online.

But, when you actually look at the transaction data across the various businesses described in the blog above, there are only about 60M+ people transacting online. One of the major reasons for this is the income levels across India. Majority of people transacting online belong to the top 4 categories of people in the Income Pyramid — Movers&Shakers, Govt/SOE Employees, Urban white collar/SME owners and the Educated Urban mass — which add up to about 60M.

Don’t get me wrong, these 60M people are transacting quite actively on the internet. If we look across startups in India, some of the best in class startups which started around 2015 are able to get to a scale (in terms of # of transactions/day or GMV) in half the time than a startup that started around 2011–12. This is mainly because of the increasing comfort of the higher end of the Indian consumer to transact online — thanks to the first generation of Indian startups such as Flipkart, Myntra, BookMyShow, Ola, etc. to name a few.

Having said that, the 60M transacting users is still a small fraction — 1/5th of the smartphone users. And that bring me to the reason for this blog — the importance of the Urban Mass in India. The Urban Mass, comprising of the Educated Urban Mass and the Urban blue collar/migrant workers account for about 130M people in 2015 and projected to grow to 165M by 2020. Their average income is projected to grow from $3200 (2015) to about $4800 (2020). This is projected to add about $400B in aggregate earning pool.

If you look at most of the online services in India, only a few of them currently cater to this Urban Mass population. As an example, very few services in India, like Flipkart, PayTM or Ola serve north of 50 cities in India. But if you look at many of the other online services in India that are listed in my previous blog, they are focused on probably 20 cities or lesser in India. In comparison, many of the online services in China serve 300 cities.

Over the next 5–10 years, the Urban Mass with their increasing income and widely prevalent internet connectivity are going to consume/demand more of these online services. There will be a class of products/services that will cater and scale to this Urban Mass. But, there are probably going to be a new set of companies created who are more focused on this Urban Mass.

Any predictions on which products/services will be unique to the Urban Mass — in the top 20 cities or the broader population in the next 100+ cities? This could be across categories such as communication, commerce, entertainment, health, education or any other sector.

Note: Blog also posted here

I personally think it is worth a shot for an entrepreneur to try reaching a potential venture capital (VC) or angel investor via LinkedIn. Particularly if you can find a mutual contact to provide an introduction. The main benefits of this approach, over just cold calling or dropping a note on the investing firms website, are the following:

• The investor can quickly browse through your profile to get a good sense of your professional background and relevance to the startup you are working on
• Check for mutual connections to do a quick reference check

But, here are a few suggestions while trying this approach:

• Do some research on the VC firm you are trying to reach and figure out the most appropriate person to reach out to, based on their profile. Most investor profiles list areas of investment interest (e.g. internet, mobile, education, etc.) and so this should not be tough to do
• Reach out only to one or at most two people at that firm who are appropriate for your particular startup. It does not help if your ping everyone in the VC firm. Yes, this does happen often and if anything it’s counterproductive. What happens is one of the investing team members who receives this, will forward it to the other team member who is more suitable to look at your company (based on interest areas) and if they realize you pinged all the members indiscriminately, it shows that you have not done any research on which of the investors would be better suited for your startup
• If you have a mutual connection with the investor, see if you can get an introduction by the mutual connection (especially if this person knows the investor well and is willing to refer you)
• Avoid requesting to “add as connections” directly. Try sending a message via InMail or through mutual connections. Many investors are particular who they add as connections and so, if you directly try adding them, they might “ignore” your request
• See if the VC is part of any group that indicates a mutual interest area and use that group to reach out to him/her
• Keep the LinkedIn message short giving a 3–4 sentence summary on your teams background and what you are trying to do. Ask the VC if you could get 15 mins over the phone to give more background and see if mutual interest. Avoid very long messages.

While on the topic of reaching out via a social network, I would highly recommend reading the following article by Ried Hoofman on “The real way to build a social network“, if you haven’t already read it.

This is more a personal post. I grew up watching my mother put her heart and soul into teaching for more than 25 years of her working career. My childhood memories revolve around her always doing something around teaching — even at home — correcting papers, preparing for her class, etc.

And my wife, is a music teacher who went to the prestigious Berklee College of Music and loves teaching. And is one of the most sought after music teachers in Bangalore in her private music studio

And so it goes without saying, I have a real soft corner when it comes to teachers. I still remember with appreciation all that teachers have done for me, right from school to college to my post graduate degrees. I won’t be what I am today but for all those wonderful teachers. And I’m sure most of you resonate with what I’m saying.

On my encouragement, since both our kids go to school now, my wife decided to put her teaching skills to broader use and has been teaching for a couple of days a week for more than a year now. This is in one of the most reputed schools in Bangalore

Through this process, I realized, how little we value teachers in our society. My first shock was on finding out how little teachers get paid even in this day and age — irrespective of their backgrounds and what kind of schools they teach in (private, international — doesn’t matter). An entry level software engineer (from a decent college) probably​ makes more money than most teachers you know. And this is for the most important job of educating our next generation.

But, what’s even worse is that they are treated as dispensable commodities in the schools. From what I hear, most of the teachers in my wife’s school feel they are treated badly — and when I checked with other teachers in my ecosystem they reflect the same. And they are forced to work there since they don’t see an alternative.

An incident happened a few days back that was the hair that broke the camels’ back for my wife. She was called into the office along with another teacher by the HR person in school. When they went into the room, the HR person didn’t even offer them a seat (this was the first day of the new academic year) but handed them their contracts and shared the salary information verbally in front of each other. Imagine if that happened to you and a colleague, with your HR. A complete invasion of privacy!

My wife was so devastated and disappointed that she decided to resign the very next day after informing the school management. Funny thing is that the school management feels the HR person did nothing wrong! And this is one of the top schools in Bangalore.

Why aren’t more teachers voicing such concerns? Because most have no other income streams and are afraid they might lose their jobs if they speak up.

On this #TeachersDay, I write this with a heavy heart. I don’t have any solutions but wish this sad state of affairs changes and changes soon in India. For any teachers out there, please do share if you feel I have this whole thing wrong and things are much brighter out there. That would be very encouraging to hear.

Had the pleasure of hanging out with my longtime friend Gokul last evening. We were chatting about his book “Management Lessons from Movies” and I was  excited to get a signed copy from him. It is a quick read and I really enjoyed it. I was surprised to find that I had seen 20 of the 33 movies he refers to in his book – not being as big a movie buff as Gokul – he sees on an average 230 movies in a year across most Indian and world languages!

I have created a IMDb List for those interested in checking out these movies. The average IMDb rating is 8.25 for the movies and so a good collection. Gokul has classified these movies into 25+ categories such as the few listed below and in each category he has listed at least 4 movies (in addition the movie he reviewed) and so in all there are more than 100 good movies to checkout from the book. Some of the more fascinating categories that I plan to check out (Can you guess which movie belongs to which category from the above IMDb list?):

1. Reverse Chronology
2. Parallel Universe
3. Time-loop
4. Docu-fiction
5. Hyperlink Cinema

And a handful of takeaways from the book that I found particularly relevant to startups – listing a few of them here so that you can checkout the rest in the book directly.

• Sky is the limit (Forrest Gump) – In the book, Gokul quotes how Forrest keeps stretching his goals while running “That day, for no particular reason, I decided to go for a little run. So I ran to the end of the road. And when I got there, I thought maybe I’d run to the end of town. And when I got there, I thought maybe I’d just run across Greenbow County. And I figured, since I run this far, maybe I’d just run across the great state of Alabama”. The same applies to startups – first you focus on getting one customer, then ten, then a hundred and the good ones just keep scaling – and there are challenges all along the way, which you take it in your stride.

• Managing with Limited Resources (Children of Heaven, Persian; Taxi, Persian; The Birds, English) – There are multiple examples of managing ones meager resources and this is a theme across three movies at least – its either the protagonists managing meager resources (Children of Heaven) or the director making the most of his limited resources (Taxi). It goes without saying, startup journey is all about making the most from very limited resources of time, money and talent.

• Know your team’s strength (Lagaan) – One of the few Indian entrants in the book, it talks about how the protagonist builds a strong team with a handful of riff raffs just by identifying special skills that each of them possess. Goes without saying how applicable this is to startup leaders.

• Small Joys Matter (Amelie, French; Lagaan, Hindi) – In this busy world, we don’t end up celebrating small successes as much as we should – this is well highlighted in these two movies and very relevant for most of us reading this blog and in particular startups that are always running at light speed with very little time to stop and celebrate the small victories.

There are 100 such takeaways in this small but very delightful book. Hope you get a chance to check it out and maybe the movie buff in you will spot a movie and a lesson that Gokul missed. If so, do highlight it here in the comments.

Note: Blog also posted here

At this moment in time, India has north of 300M smartphone users as per various publications (here’s one report by the Economic Times). With the launch of Reliance Jio, and subsequent mobile data price wars, the average price of data in India is one of the lowest in the world. What this means is there are 300M+ people in India capable of transacting online.

But, when you actually look at the transaction data across the various businesses described in the blog above, there are only about 60M+ people transacting online. One of the major reasons for this is the income levels across India. Majority of people transacting online belong to the top 4 categories of people in the Income Pyramid – Movers&Shakers, Govt/SOE Employees, Urban white collar/SME owners and the Educated Urban mass – which add up to about 60M.

Don’t get me wrong, these 60M people are transacting quite actively on the internet. If we look across startups in India, some of the best in class startups which started around 2015 are able to get to a scale (in terms of # of transactions/day or GMV) in half the time than a startup that started around 2011-12. This is mainly because of the increasing comfort of the higher end of the Indian consumer to transact online – thanks to the first generation of Indian startups such as Flipkart, Myntra, BookMyShow, Ola, etc. to name a few.

Having said that, the 60M transacting users is still a small fraction – 1/5th of the smartphone users. And that bring me to the reason for this blog – the importance of the Urban Mass in India. The Urban Mass, comprising of the Educated Urban Mass and the Urban blue collar/migrant workers account for about 130M people in 2015 and projected to grow to 165M by 2020. Their average income is projected to grow from $3200 (2015) to about $4800 (2020). This is projected to add about $400B in aggregate earning pool.

If you look at most of the online services in India, only a few of them currently cater to this Urban Mass population. As an example, very few services in India, like Flipkart, Amazon, Ola serve north of 50 cities in India. But if you look at many of the other online services in India that are listed in my previous blog, they are focused on probably 20 cities or lesser in India. In comparison, many of the online services in China serve 300 cities.

Over the next 5-10 years, the Urban Mass with their increasing income and widely prevalent internet connectivity are going to consume/demand more of these online services. There will be a class of products/services that will cater and scale to this Urban Mass. But, there are probably going to be a new set of companies created who are more focused on this Urban Mass.

Any predictions on which products/services will be unique to the Urban Mass –  in the top 20 cities or the broader population in the next 100+ cities? This could be across categories such as communication, commerce, entertainment, health, education or any other sector.

Note: Blog also posted here

This is an update on a blog from 2011 titled What’s On(line) India? I wrote that blog about a year after I moved back from US and compared the online services that were available in India to the ones in the US. I had identified a few areas where the services had just launched in India and a few more where we did not have an equivalent service in India.

I was curious to check how things have changed in India and so did a refresh of that table.

Some observations:

Most categories popular in the US are all available in India and with reasonably good options

There are a few categories (particularly in O2O) that were non-existent (or very early) in 2011 that have quickly evolved in both US and in India and have got to reasonable scale. These categories are highlighted in green.

The categories that are driven by subscriptions or purely digital revenue (e.g. Movie rentals) are still early in India — particularly since subscription businesses are yet to catch the Indian consumers favor.

Most of these products/services are still getting traction mostly from the top of the Indian consumption pyramid

With the growing smartphone penetration and growing income levels, we can expect some of these products/services to trickle down to the next layer of Indian consumption — what Goldman Sachs calls the Urban Mass

The above list is by no means exhaustive. Curious to hear what products/services you would love to order from your mobile or your computer that you are not able to yet in India.

Note: Blog also posted here

This is an update on a blog from 2011 titled What’s On(line) India? I wrote that blog about a year after I moved back from US and compared the services that were available in India online to the ones in the US. I had identified a few areas where the services had just launched in India and a few more where we did not have an equivalent service in India.

I was curious to check how things have changed in India and so did a refresh of that table.

Some observations:

• Most categories popular in the US are all available in India and with reasonably good options
• There are a few categories (particularly in O2O) that were non-existent (or very early) in 2011 that have quickly evolved in both US and in India and have got to reasonable scale. These categories are highlighted in green.
• The categories that are driven by subscriptions or purely digital revenue (e.g. Movie rentals) are still early in India – particularly since subscription businesses are yet to catch the Indian consumers favor.
• Most of these products/services are still getting traction mostly from the top of the Indian consumption pyramid
• With the growing smartphone penetration and growing income levels, we can expect some of these products/services to trickle down to the next layer of Indian consumption – what Goldman Sachs calls the Urban Mass

The above list is by no means exhaustive. Curious to hear what products/services you would love to order from your mobile or your computer that you are not able to yet in India.

Note: Blog also posted here

Increased connectivity and the spread of smartphones over the past decade have completely transformed Indian commerce. As more and more Indians get access to online services, they become accustomed to buying online – from books and tickets to smartphones, TVs, electronics and increasingly grocery and daily goods.

Over time, the dominant business model of e-commerce players has settled on the marketplace model. While inventory driven e-commerce may often grapple with issues of warehousing or product sourcing, marketplaces have on balance less initial constraints to deal with. More than a dozen startups of the annual Unicorn list published this year by WSJ, had business models that would align themselves to marketplaces. The distinct nature of marketplaces is such that there are push-and-pull factors between buyers and sellers that lead to virtuous cycles – the buyers and sellers on the platform keep providing value to each other thereby bringing scale to the venture.

Before understanding the distinct nature of marketplace, it may be helpful to highlight some of the characteristics that markets must exhibit before they can be accessed using marketplace models. After all, not all offline services can be viably brought onto a marketplace platform. However, there are certain characteristics that take well to marketplaces such as:

1. High frequency use: The service being provided is of high frequency, such as hailing taxis, ordering food or making restaurant reservations. If the purchase cycles are longer, brand recall and user engagement tend to get minimized thereby preventing the marketplace from gaining network effects and scale.

2. Existing fragmentation of supply and demand: Fragmentation of value chains lead to hidden value that are either not being used or optimized. Further, it also means less friction for a new marketplace player to enter the market. Cumulatively there also appear to be greater advantages that sellers and buyers can receive from each other that they cannot by themselves.

3. Network effects: Over time, the marketplace ought to be giving you value that is better than the one that you received in the beginning. In short, the more people that use the service, the better it should get at providing it. Network effects of this kind end up creating tremendous value for both buyers and sellers.

Beneath this view of marketplaces, a helpful distinction can further be made between different categories of marketplaces in this regard. In a sense, not all marketplaces are created equal. Indeed, based upon the service, marketplaces can be divided and sorted into three main categories: basic listings, curated marketplaces, and managed marketplaces. Some characteristics of these are listed below.

Basic listing: These are the plain vanilla listing platforms that basically allow anyone to sell products that they own. A prominent example of this model in the beginning was Ebay and Craigslist. Such platforms have no tabs on the pricing of goods placed on the company as well as they do not dictate the precise user experience (UX) for each good. Expectedly, the service level that a buyer would gain from each listing also varies.

Curated marketplaces: The key difference between this and the basic listings model is the added input that the marketplaces themselves provide to make sure the user experience is a somewhat standardized one. In such a model, there is a filter imposed to vet services/goods providers. In addition, there are mechanisms in place that manage the curation experience through ratings and so on. A large chunk of the marketplaces that have gained scale and have entered the billion+ valuations such as AirBnB, Etsy and Groupon can be bracketed under this rubric.

Managed marketplaces: The last category is that in which services are still provided by a third party. However, the environment, pricing as well as service experience and customer support are all guaranteed by the marketplace itself. TaxiforSure and Ola are perfect examples of how an effective marketplace can develop with buyers and sellers operating under a standardized user experience that in turn is coupled with an assurance provided by the marketplace regarding certain basic quality parameters.

Accel and marketplaces

At Accel, we have worked with many terrific entrepreneurs and helped them in building businesses that have had well executed marketplaces at the core. Globally, we have led the charge in helping build marketplaces that have redefined categories. In the US, Accel has been involved with marketplaces such as 99designs (design services), Etsy (handmade products), Groupon (daily deals) and Trulia (connecting home buyers, renters and sellers). Furthermore, in Europe, Accel has led efforts in startups such as Avito.ru (Russian classifieds), BlaBlaCar (ride sharing service), Deliveroo (food delivery) and Wallapop (a P2P second hand goods marketplace).

In India, our partnerships with entrepreneurs in the marketplace category have ranged from hugely successful e-commerce players such as Flipkart & Myntra to movie/event ticketing platform BookMyShow and taxi hailing service TaxiForSure and Ola. More recently, we have also backed innovative new companies across industries such as Capricoast (home furniture solutions), Coverfox (buying insurance online), Medigo (arranging medical tourism), Portea (healthcare at home), PropTiger (real estate transaction facilitator), Swiggy (food ordering and delivery), Vedantu (online tutoring for K12 students), UrbanClap (all your local services) and ZopNow (grocery ordering). All these startups connect service providers across various sectors while ensuring certain standardized quality that the Indian consumer now expects and demands.

In addition, marketplaces also have tremendous value in streamlining and improving the efficiency of business-to-business transactions. Power2SME is an example of a marketplace that functions in the B2B space. Through Power2SME, Small to Medium Enterprises (SMEs) get connected to suppliers of essential commodities and supplies that allows them to gain savings and ultimately scale their business more efficiently. Similarly, we have three other businesses in the B2B category that are still early in their evolution.

The future of marketplaces

The broader ecosystem of connectivity that has led to the emergence of the new Internet economy also has other components ranging from the tremendous smartphone penetration to social media engagement among India’s younger demographics.

There is, therefore, a huge opportunity to remake the first generation of Internet marketplaces (across industries) and make them more responsive to the needs of the young Indian mobile consumer. In particular, the demands of the smartphones would place greater emphasis on the User Interface (UI) and User Experience (UX) of the product so that it meets the experiential demands of the discerning Indian consumer. The emphasis that mobile products place has shifted from being transactional — getting the best value for a particular good to being experiential – enjoy using the medium that allows me to get a particular service. In the current scenario, the feel and user friendliness of the medium of availing the service is almost as important as the service itself.

Through YourStory’s ‘The Marketplace’ campaign, we hope to engage with a whole new set of startups that are using innovative marketplace models to disrupt traditional and first-generation Internet businesses in India and to touch millions of Indian consumers and businesses in the years to come.

If you are building one, then apply now! – http://themarketplace.yourstory.com/2015/

Note: YourStory published this blog here.

image credit – shutterstock