Thursday, February 2, 2012

"India is difficult for product-startups"


Mobiles have become an indispensable part of our lives and their utility has expanded from just being a communication device to a service provider. The entire gamut of information is now just a click away. Quantama.com is one such start-up that uses mobile to help consumers to discover awesomeness existing around and in turn bringing relevance closer to them. Quantama’s founder, Preetham V V throws some light on how it came to be:
What is Quantama?Quantama.com is a mobile LBS provider in the Retail space. QUB3 (powered by Quantama, pronounced as Qube) helps consumers to discover points-of-interest, promotions and events around them which are relevant to them. QUB3 also enables the Retailers to conduct Behavioral-Targeting and Location-Based-Engagement with their consumers who are in the vicinity of the store.
How and why did you choose the particular idea?While starting Quantama I did draw a framework to myself where I wanted to work on an idea that impacts a large consumer base, is scalable, exciting and something that I would invariably love to do.  I also wanted the idea to be challenging and something to do with the mobile devices. The current idea evolved as an amalgamation of several ideas that were churning in my mind.  I was thinking of a dating engine which hooks-up people in the vicinity to serendipitously discover each other over mobile phones.  Also, due to my past experience in developing software for Retailers, I was pondering on ideas that can help retailers power-up their revenues.  That's when I realized that a dating engine for getting consumers and retailers together fits well into my defined set of criteria.   Upon initial market research, I did find that there is enough scope for the idea as it addresses some core problems of the Retailers in the areas of consumer engagement.
How did you go about executing the idea? Once the scope of the idea was chalked out, I started to run it across several people including investors, colleagues, friends, neighbors and occasionally to teenagers.  This allowed me to distill the idea where an execution plan can be put together and initially decided to execute the idea as a mobile proximity story over Bluetooth networks.  With a projected burn-rate for the execution, I thought of going after angel funds and prepared a full working prototype end-to-end in about 3 months before approaching them.  After a couple of months of pitching to the angels, I realized that the nascency of the industry is seen as a bigger risk for the investors. I was getting terms at higher dilutions than I was ready to accept and decided that it is not worth de-valuing the idea based on someone else's measure of risk (which is very relative).  I have bootstrapped the idea on my own by pulling out my savings and assets as well as performing occasional consulting engagements. Recently I raised a small round of funding from supportive friends.
How and why did you select the target industries?Given the core idea of our business, we can apply it across HealthCare, Insurance, Retail, and Banking etc.  We chose Consumer Retail as our Phase-1 Go-to-Market strategy, considering the intensity of the pain faced by the Retailers that needs to be solved and also due to a higher percentage of reach that we can grab with the end consumers.  There are 5.5 retail outlets for every 1000 people in India. The market size of $350billion is made of only 5% organized retail compared to other countries.  The un-organized sector is definitely hurting to execute efficiently compared to the organized counter parts.  Also, every one is hurting equally to engage with their end-consumers. This is where Quantama can make a significant impact.  We have decided to go after specific formats in the consumer retail segments which have higher margins. Our revenue model is based on zero capex and a subscription fee for usage. We are very focused on consumer adoption more than revenues.
What is the current profile of the company? What kind of growth did it witness over the years?Quantama is front-footing the LBS and Behavioral-Targeting story for the Retailers. Also our consumer value proposition is to help discover awesomeness that exists around them.  We have just launched the LBS model over last 4 months. We have been able to get a small group of initial adopters who are helping us stabilize the platform.  We have also acquired initial set of Retailers who are helping validate the model.  We have tagged 3000 retail outlets on the QUB3 platform which is contributed by our consumers organically. We have registered in excess of 60,000 mobile hits on our platform since launch. All this tells us that we are probably on the right track. 
What kind of challenges did you face in the initial stage? What mistakes did you make?The initial execution plan was to enable a push-based engagement model over Bluetooth network. I did bet a good portion of my resources building the idea on proximity hoping that Bluetooth adoption in my space shall accelerate.  I made a mistake by not accounting the fact that not many people were building businesses over Bluetooth as of yet.  What this does is shift the market-making cost entirely over to me which is capital intensive and I wasn’t ready to foot this cost.  Realizing this mistake, I quickly reinvented over to the LBS model which is relatively less capital intensive and has lesser friction in the consumer adoption lifecycle.  But we are still learning and evolving to the new market dynamics and shifts in consumer trends. We are also constantly innovating to be quick and effective and build a model which is sustainable in the long run.
What have been your learnings' in the process of building the start-up?Stating that start-ups are a tough environment is a cliché. India makes it difficult for technology entrepreneurs, starting product companies, due to lack of access to relevant mentors who have built successful product startups.  Also a higher maturity in investor vision is sought to fairly assess the risks involved in product based startups. We are yet to see large scale success here. You can check out my blog link on these thoughts:(http://ow.ly/3jTFi).  Added to this, I have to sustain the down-cycle of markets of 2009-2010. Lot of investors pulled back funds or were on freeze for a while.  Retailers here in India put a freeze on all their expenditure and investment plans. Some retailers went out of business over the last year. India (though stable compared to USA) had to re-factor the economic growth rate. 
In the midst of this turmoil was my idea, trying to change the world. My learnings are multi-fold. I learned that it requires great amount of tenacity to stay focused in such adverse times.  You should be in love with what you are doing to reduce the noise levels. Choosing an idea that you love (however irrational this may sound) is the key. It is important to accept mistakes and have the ability to quickly re-iterate over the plans.  It is important to engage with your mentors and vet the ideas thoroughly. I also learnt to keep distilling the idea to a level of simplicity which can be expressed in probably 3 sentences to the relevant audience.  The biggest learning is to make your idea an inclusive process from day one along with your users and customers.  This helps you either to kill bad execution models quickly, or to allocate proper resources to eliminate confirmatory-bias that may exist in the markets.
What is your vision for the company? Throw some light on its expansion plans, innovations, future prospects.Quantama's Innovation shall be in the Behavioral Targeting space through click stream analysis. The holy-grail is to enable "Relevance" to the consumer. Learning about the behavior of the consumer by analyzing the click stream is a very challenging task.  One needs enough data before even starting out to make any reasonable guesses. Collecting such data is what we are focusing on in the immediate future.  As far as expansion plans are concerned, we have to execute well over the top 10 cities that we have earmarked over the next 18 months.  We want to be the dominant player in the LBS and Behavioral Targeting markets over the next 3 years. The key is to acquire consumers by offering intrinsic value that is compelling enough for them to engage.
What is the importance of team, partnerships in a start-up?Having a team is very crucial for start-ups. In my view, your team typically consists of you, your mentors, customer champions, strategic partners, investors and your core team members.  For a start-up, all of them have to be in sync. Hiring your core team is a very exhausting process. It is imperative that you bring people who love the idea as much as you do so that it is easier for them to sail through adversity as much.  That said, passion should be higher in priority than skill. I believe that passion helps acquire skills if there is a lack of it. It is hard to look for skill sets for a business idea which is going after nascent markets. You have to learn new skills on the way anyway. I had to keep looking for more than a year before I could hire Rahul Jaiswal on board to the core engineering team. I am still on the lookout to augment the team with more capabilities.  We are also blessed with mentors who bring great domain knowledge in the area of Retail. We are working on strategic partnerships in the area of marketing, distribution, operations and consulting. 
As an entrepreneur what is the advice that you would like to impart to budding entrepreneurs?I can only state my experiences from which I have learnt that entrepreneurs should have a sense of 'attachment' and a sense of 'detachment' in what they do.  It’s imperative that you validate and choose the vision that you deeply, truly believe in and get attached to it.  It is also imperative, that once the vision is set, you are willing to accept your mistakes, detach and re-iterate the execution models to accomplish the vision.  It’s hard to find this balance, as sometimes, it’s hard to discern one from the other.

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