Ganapathy Venugopal, co-founder & CEO, Axilor Ventures, takes us through his firm’s accelerator program and the key takeaways for budding entrepreneurs through this program.
Axilor Ventures, an accelerator and a seed fund, was set up by veteran entrepreneurs and senior leaders, S.D. Shibulal, Kris Gopalakrishnan, Srinath Batni, Harvard Business School Professor Tarun Khanna and Ganapathy Venugopal. The main vision of Axilor is to improve the odds of success of entrepreneurs in their first 24 months through its 100-day program and a venture funding model.
Its framework is focused around launching the start-up the right way, access to the right capital at the right stage, dedicated mentorship, access to the Axilor peer community of entrepreneurs, and a series of masterclasses from industry experts to help learn how great startups are built and what mistakes to avoid.
It has three programs – Accelerator, Scale-up and Early Stage Funding programs. The accelerator incubates start-ups operating in the e-commerce, healthcare, life sciences, sustainability and clean technology spaces focussing on scalable, disruptive and technology-led business ideas for budding entrepreneurs and experienced professionals. The first batch of the program commenced in the first quarter of 2015 with 10 start-ups and the venture has recently decided to double the size of its incubator program. In the fourth batch that it completed recently, five out of the ten companies have already secured further funding, two have strategic acquisition offers and one company has a signed up sizable corporate partnership.
In this interview, Axilor’s co-founder and CEO, Ganapathy Venugopal, talks to us about what companies take-away from this accelerator program, how they take the companies from one stage to the next and the flavours of entrepreneurship in today’s ecosystem.
Please share with us anecdotes from three of your start-ups, their first 12 months and the next stage they have reached.
A candidate from the first accelerator batch, PlaceofOrigin, is a consumer Internet company that is creating a market place that sells artisanal food products from its source. It does not store the products that it delivers; instead they’re shipped from the store directly. During the course of the program it solved two things: one, logistics side of the business and established it in such a way that when something is ordered from any remote location, food reaches the consumer safely. Second, during the course of the program, they were able to understand how to reach out to different customer segments. They got into a scale up program and raised Rs. 25 lakh in angel funding. Eventually, the company was acquired by Craftsvilla.
Survaider from the third accelerator batch was set up by entrepreneurs who were just a year out of Delhi University. They wanted to create a product that allows multi-outlet organisations to gather online feedback available in multiple places, aggregate them and try to understand the actionable part of customer feedback. During the course of the program, the company started to have customer conversations and understood that hospitality was one segments they had to go deep, as that is where they were getting maximum traction.
They got into the scale up program, and have signed up with more than 15 hotel chains, and each chain has about 8 to 10 outlets. While they are developing the product, when they move from accelerator to scale up stage, their product roadmap gets defined. They were able to create a notification feature that allowed the hotel to take a customer feedback and link it back to the person in-charge so that action can be taken. They are at the scale up stage now.
The third company is Apps fly, a company that came out with a deep tech product that allows in-app purchases. During the course of the program, the company ran a few pilots, spoke to a few people and at the end of the program, they were able to raise a 200K round at a valuation of a million dollars. So the program allowed the company to move ahead at a much faster pace, sign up real customers and made them investible.
How do you coach entrepreneurs? How do you align their thinking to that of yours?
One discipline that we inculcate in them is to not treat capital as a substitute for customer insight. Basically, they need to find proprietary insights, make capital last long and respect organic growth.
What the program does in terms of coaching is help the entrepreneur find and get over the possible blind spots they may have. One, all entrepreneurs are in love with their idea and the program allows them to balance their intuition with evidence at every stage. Two, make them understand the power of small goals. Three, is to make them better at whatever they are doing – developing customer pitches, how to sell, presenting an idea to an investor, and so on.
You have doubled the intake of start-ups for the accelerator program to 20. What is the reason behind this move and what is the mix of businesses?
We are now focussed on 5 sectors: Consumer Internet and Fintech – in these two we are looking for businesses that will build around India Stack which is about the next 500 million people adapting smart phones. We are looking at Enterprise Technology which is mostly the SaaS model. The Artificial Intelligence business are those where the businesses have the AI component. And finally, the Healthtech businesses that solve healthcare-related problems using software related products.
So, it is not so much about 10 becoming 20 but is about looking at 5 different verticals and supporting entrepreneurs in these segments.
What are the different flavours of entrepreneurship that you are witnessing today?
When you look at the motivation for entrepreneurs to start something, it could be a spectrum as wide as a personal problem that led to the idea, an interesting idea, working on the idea in their last job and understand the sector well and hence, decided to do something here, or they were working on the idea in their last job and have a better way of doing it.
What I am observing is that from being intuitive, the percentage of people who have worked on the problem before entering entrepreneurship is on the rise. And this helps them move ahead with lot more speed especially when it comes to validation as they have the evidence already. The founding team of two people who worked on the problem, can go a lot farther than the ones who start on it saying it is an interesting idea.
Second, from sectoral perspective, we see a lot more diversity with many Enterprise and Health-tech start-ups coming up.
Your message to entrepreneurs:
Today, the overall funding environment is not that conducive. Entrepreneurs are stuck as investors are slowing on investments and want to make their existing portfolio better. Larger companies are stuck between growth and profitability and have no cash.
When Axilor was started, it started with the goal that you can achieve a lot more even before you raise funds. Our view is that you can still make a lot of progress and when the environment improves you will be far ahead.
Entrepreneurs can bootstrap, accelerator programs can help them move forward and get access to funds. If you are looking at raising Rs. 6 crores to Rs. 7 crores, raise Rs. 1.5 crore to move from one point to another and reach your next milestone. There are a number of ways in which, one can still make small progress.
Companies reminisce – three companies that were a part of various batches of Axilor.
Company : Survaider
Axilor Batch: April 2016
Founders: Madhulika Mukherjee, Tushar Mishra
Location: New Delhi
About the company: Incorporated in November 2015, Survaider is a SaaS platform to help understand the opinions or voice of the customer. For a hotel or restaurant chain, the company aggregates and analyses all kinds of feedback, calls and emails and puts it on one dashboard, helping the business make sense of the feedback easily.
We had a couple of pilots running with a few businesses. While we were focussed, we were not very clear in the way we were functioning. We (two co-founders) were trying our hand out at different things without tracking our progress and actionable outcomes. We were also not very connected in the industry and had no network. We didn’t have the required level of insight and the kind of mentorship we needed.
- Better focus. Got more customer/industry-focused, pivoted the product.
- Started getting traction and revenues.
- We hired people. Once we hired more people, we released that we were not two friends who finished college and working on a project. Axilor really brought us to the ground and showed us how we should be working.
- We started tracking our work on a weekly basis and held each other (co-founders) responsible and accountable for a set of activities.
- Every action became more actionable and we were not just trying out something random.
- They had industry experts coming in which gave us a lot of insight about the hospitality industry. Apart from the faculty that conducted the workshop, they made it accessible for us to talk to anybody. Our network expanded 100 fold.
- Understood the kind of strategies that will work and how to sell and how not to sell.
Name : MiStay
Founders – Sandeep Jaiswal, Pranav Prabhakar
About the company: A travel tech company which allows booking hotel rooms by pack of hours with flexible check-in or check out times. Currently, it is operates in 8 cities in India, with partnerships with more than 100 hotels. It also partners with corporates to manage their employees’ travel needs who often require day-use hotels for short stays.
Year of Incorporation: April 2016
Axilor Batch: October 2016
Sandeep Jaiswal Speaks:
- We had just launched the company, a soft launch
- Had only 40 hotels partnered. Now we have more than 100
- No clear direction.
- We were able to experiment with different segments.
- Focussed on direct consumer marketing and decided to go with corporates after enough supply
- Define the market space and which customer to go after and at what point in time
- Focussed towards growth. Earlier we were thinking that because of the model that we have, the value for consumer is very clear. We were only looking at supply, but not much on growth. But we realised that growth is important to deliver to the supply side.
- We assumed that corporates will see a lot of value in our product. We thought that we will reach to corporates after we have enough hotels. We realised that we had to speak to corporates to check their response. Our assumption that corporate clients will see value got validated through data.
- Spending time on fund raise and not enough on validating the model. So decided to spend our energy on building a robust business. Focussed on validating the assumption and now we are raising funds.
Founders: Sandeep Singh, Kewal Krishna, Ankit Goyal
About the company: InsightsIO is creating an audience engagement and monetization solution for digital content publishers, called Delited.
Year of incorporation: 2016
Axilor Batch: October 2016
Sandeep Singh Speaks:
At the beginning, we built a platform to help brands gather insights from consumers in real time. After launching the platform and monetising it, we realised that creating and maintaining a captive audience (respondent community) for brand insights was a resource intensive activity. Due to these issues, we pivoted and started doing marketing research services. We engaged with IT companies for various services like customer satisfaction measurement processes and other end-to-end research based projects.
- When we built our first product, it was a product business on SaaS pricing. We pivoted towards a service based model and realized that monetising services in India are easier but time consuming and heavily resilient on domain expertise.
- We wanted to figure out the depth of the services we provided and if there was something we could do to reuse the product that we had built and do services at the same time.
- We made our 2nd The first product we built was built in such a way that it would still be a solution that could be posted on any content publishing site. The audience on the publishing site becomes our respondent base for any poll or survey running on the publishing site. We don’t take the responsibility of the respondent community that will help the brands with the consumer insights, but we tie up with publishers to ensure their audience base does that for us. The platform enables the publishers to use our platform directly by embedding widgets of different kinds within their articles to increase their audience engagement, get more traffic and subscribers and ultimately understand the audience behaviour though deep level analytics to fine tune their content and monetization strategies.
- When we got into Axilor, with the help of mentors assigned to us, we spent time to understand and explain what we have done in the past. The feedback they gave was to develop focus on a particular industry and target segment. Since we had worked with publishing businesses when the first phase of product was getting evolved, we tweaked our product for that particular sector. The focus increased and product and marketing effort evolved towards a singular target.
Moving from one stage to another
In the accelerator program, they need to seek evidence for:
- Validation of the need, which means they are going to have customer conversations.
- In what form and shape are people willing to consume it. Basically product features that need to be built.
- Is there any willingness to pay and who will pay for it. Can the idea become a business?
In the scale up program, they need to:
- How do you build repeatability of sales? Who is your most specific customer segment and what kind of sales pitch is working. And are you getting better at it?
- What is the product road map?
- How will the next stage of business look like which is important from fund raising point of view?
What leads to speed?
- Have clear goals for next 180 days that contribute to speed and not get distracted by doing 10 other things.
- Access, in terms of customers. We have a whole bunch of partnerships and the access to investor partners and people who have built businesses.
- Access to the community. Degrees of separation between whom they want to talk to and is there someone who can get them access.