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Productifying construction | Iesh Dixit @ Powerplay
291 Plays1 year ago
Having faced initial setbacks, Iesh's decision to join a successful startup exposed him to a steep learning curve, where he absorbed crucial lessons from an accomplished founder. Two years later, armed with newfound insights, he took the plunge again, founding Powerplay- utilising his accumulated knowledge to achieve substantial scale and profitability.Iesh shares his lessons from both failure and success, and gives some truly useful advice to founders seeking to scale up.
Read more about Powerplay:-
1.How SaaS startup powerplay connects stakeholders in construction sector
2.Mr. Iesh Dixit, CEO & Co-founder, Powerplay, App to manage construction & architectural projects
3.Power of data revolutionizing construction industry
5.The contours of construction: Why is one of the in-demand industries still partially paralyzed?
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Transcript
Introduction to Ish and Powerplay
00:00:00
Speaker
Cool. Hey everyone, my name is Ish and the co-founder and CEO at Powerplay. Great to be here.
00:00:17
Speaker
Here's
Path to Entrepreneurship: Learning from Failures and Successes
00:00:18
Speaker
a thought experiment. A young college student asks you to design a path to help her learn the skills she needs to be a successful entrepreneur. The best possible path for someone like her would be to look at the path that Eish Dixit took. Eish is an IITian who started his venture while still in college and after failing to scale it up for two years, joined a startup that had raised funds and scaled in that space.
00:00:41
Speaker
This ensured a steep learning curve for him as he had already tasted a lack of success and that prepared him to quickly learn and accept the lessons from a more established founder.
00:00:51
Speaker
Two
Early Entrepreneurial Experiences and Motivation
00:00:52
Speaker
years after this, he quit and started Powerplay and made use of all his lessons to create something that would truly scale and become a large profitable business. In this very candid conversation with your host Akshay Dutt, he shares his lessons from both failure and success and gives some truly useful advice to founders seeking to scale up. Stay tuned for this conversation and don't forget to subscribe to the Founder Thesis Podcast on any audio app.
00:01:25
Speaker
So you're a serial entrepreneur, and you started your journey pretty much soon after IIT. Just take me through your journey. I think the job question, that's something that goes way back. I remember when I was, I think, eight years old, there used to be a college, a school where students used to visit that fair, and with their parents and all
00:01:56
Speaker
And I remember back then, I always wanted to sell something. Since the sphere was in summer season, so I decided to sell cold drinks, not just the coke and all, but made them there then itself in ice with sugar, etc.
Impact of IIT on Entrepreneurial Journey
00:02:24
Speaker
I saw my peers and friends too much interested in visiting the fair, shooting things, going to shops with their parents, but I had these different narratives. I will be the one selling something there. I think the next 3-4 years after that, I ended up convincing a neighbour of mine to give him his yard for two evenings so that I can hold my own fair.
00:02:54
Speaker
and I can ask people to have shops in that fair. So, it goes way back then, I think, which city did you grow up in? I grew up in Gwalior. It's a city in Mati Pradesh. So, yeah, and I think,
00:03:14
Speaker
In my childhood, I was always intrigued by such things. I used to go and sell membership to my fair. And my parents were like, yeah, Chanda Wang is our avatar. But I think, yeah, that's it. And then, see, I wanted to go to IIT because, frankly, my mom told me about it. I have no other reason. I thought, my mom told me, boss, this is where you should go. This is your future, et cetera, et cetera. And it was a challenging problem.
00:03:43
Speaker
only a few could make it. So that made it interesting. I think I started studying for IT in my 11th, cleared it by the drop year. But when I went there, I realized that the smartest people in India, in my age group, are just not interested in studies.
00:04:06
Speaker
Yes, there are people who are so much interested in academics, but there are also people who are interested in general things in business, in research, et cetera, et cetera. And when you are surrounded by such folks, the power is always high. So a lot of my deep friendships were made with such folks who are now entrepreneurs. So I think that Kira got a lot of
00:04:36
Speaker
room to grow in IAD, where I did not start my own company till the last year, but it did a lot of things that grew me as a leader in the first three years, I started my own political party, I took part in a lot of
00:04:54
Speaker
events. Obviously, my GPA was eight on 10. I was, I was, I could be great at studies. But I didn't think I wanted to be I wanted to just make it so that it's a good score. Very good. You are
Lessons from Early Startups and Strategic Pivots
00:05:08
Speaker
graduated now. But so that in third and fourth year when I saw my seniors from college,
00:05:16
Speaker
Razorpay founders doing good stuff, making a company out of a college group. So they used to have this SDS labs in college. That was the place where all the techies used to go. That group was directly hired in Razorpay when they started their own company. And it was like, was nice, this is good. You are basically extending your time with friends in your professional life. You used to be with them now, work on hard problems, but different things. And you sort of doing the same thing.
00:05:46
Speaker
My co-founder was from the same SDS lab, mobile development group and all that. So I think that was where I started thinking was this can be a career. It cannot be just in hobby. And yeah, so I think when I graduated, it was very clear in my mind that I will not work for a lot of months and years. I joined Cardeco as a software dev. I left Kritanamant and started a company. So I think that space was there.
00:06:16
Speaker
What was the idea? Did you have an idea or did you just want to be an entrepreneur? It was very clear to me. As I told you, right? I used to think that I can sell someone anything in my college days. And the real test was when I went into politics and I wanted people to vote for the candidates that stood
00:06:46
Speaker
for me, etc. So yeah, I learned a lot of things back then. So this was something common with me, maybe whatever it is, I will sell it. Now, with time I started understanding what are the things
00:07:03
Speaker
you sell so that you become a great entrepreneur. A successful business can be built very fast. And then I started realizing, okay, it has to be products with minimal marginal cost of production so that you can sell more, make less, like software, media.
00:07:20
Speaker
such things start becoming clear because of my engineering mind. And I realized that you can sell everything, but you will not become a big business just because you sell anything, right? You'll have to start thinking about what can I sell. And then in that journey, I realized, boss, making software is a very primal need today, means if you are an entrepreneur and you can't code something quickly, it becomes very difficult for you to iterate and test your ideas.
00:07:50
Speaker
So yeah, means these two things, the fourth year, after all that politics and all fourth year, I was coding. I,
Scaling Businesses and Learning from Jumbotail
00:07:57
Speaker
because I wanted to start something once I, once I graduate. So I started making a lot of things. My first idea, to very, very frankly, start thinking about ideas, you walk across the road. The first thing you see is Hirana stores.
00:08:11
Speaker
because they are everywhere. So my first start-up was to help Grana stores. It was something like Grover's, the first idea. It was very brief, I think six to nine months we pivoted to something else, but yeah, that's how it started.
00:08:29
Speaker
like an app from where customers can order and fulfilment through Kirana stores. Yeah, but back then I was thinking I have to offer something, a solution to the Kirana stores because they would want to sell more. So there's a learning here. I realised that after a point in time, people are not very ambitious. Everybody is not ambitious. So a Kirana store might be happy.
00:08:54
Speaker
doing what they're doing. They just want to make sure needs are met. So this was my learning back then. Just because your business wants someone to become big, they will not become big. Ultimately, consumers should be placing orders on the platform so that the people who want to become big can cater those orders and blah, blah, blah. So yeah, these are a few things, but yeah. That's a very good insight. So you did the six, nine months, then what was the next?
00:09:21
Speaker
So I realized that orders started flowing in. I think I onboarded close to, so back there I was in Jaipur. Jaipur Megh, Karthikos, headquarters in Jaipur. So I left my job, did not think to relocate back then. I was naive. Later I took a decision to move to Bangalore. But in six to nine months, we were able to scale orders. But one thing I noticed was I was being,
00:09:51
Speaker
charged. I was making money on a meter down approach that if you, so I gave you a solution. Now, whenever you get order, I also used to provide network of these logistics providers to ship those small people on bike. The service was add on with the software. Now I started realizing that Panch Kilometre Go delivery, so net net what I'm making is some absolute number. I'm not making a percentage of the order.
00:10:22
Speaker
And if I were to make a percentage of the order, I need to bring orders. And that's where I started thinking he was offering something just to the suppliers. My scope would be limited. They might not pay a lot for the software. And in order to grow the business, I would need to bring in orders. And that's when I pivoted to this B2B wholesale marketplace, where
00:10:49
Speaker
When I started thinking about customers, most of the people in Jaipur are apparel manufacturers and wholesalers. So a lot of our buyers, our KFO factories, were using my service just to do that. When I started interviewing these people, I realised that manufacturers could not sell outside Jaipur or Rajasthan. They face a big issue. The only good enough platform is India Mart.
00:11:18
Speaker
So that's when I started thinking, maybe there's something of a B2B marketplace that can be built here. And that's when I pivoted to this. That was something I go wrong. Supplying the passion. Yeah, yeah. So retailers across the country could place an order, and manufacturers sitting in Jaipur, Surat, Ludhiana, Tirupur can supply it to them. How did you do this without raising funds?
00:11:45
Speaker
if you're really going after fan India retailers. OK, so let's discuss what happened back then. Because, see, I was very naive. I did not think I would need money to verify. What I did is I
00:12:06
Speaker
I started calling Jazdaal pay retailers and I already had a few manufacturers. I just became a sales agent. I started selling them things, then hired two more people to do that and then brought a product which can do the same thing after the third or fourth order for the same guy, from the same buyer.
00:12:26
Speaker
And after a point in time, I started feeling the need. I need to have working capital in place and then more people in place. So how to go big is something I need money for. Why do you need one thing? The order was flowing through you or you were just connecting? It was flowing through me. So you have to pay manufacturers in advance and you'll receive payment after looking there. There was a 7 to 15 days. That was killing me after a point in time because
00:12:57
Speaker
That's when I realized, okay, and sometimes for bigger orders, right? These people would be like, I want 90 day credit. And I was like, if I give you 90 day credit, I will not exist.
00:13:11
Speaker
So yeah, that's where I really started to learn the basics of. So I would say if someone gave me money back, then he would be a stupid person because I did not know no basics, right? And either I could have joined an early stage startup to learn those things, or I could have done it myself.
00:13:27
Speaker
Good thing is when I did it myself, I knew some core values. Why it's important that after a point in time, orders start flowing on the app. Why it's important that you don't have a credit period to start with. All of these minute things that you need to know. And then I started raising funds. When I started feeling, oh, boss, I need money.
00:13:53
Speaker
And the reality check was given to me very, I think I pitched to 63 investors back then. Wow. I feel the stage VCs. VCs, angels, everyone. We were four co-founders back then.
00:14:12
Speaker
because I felt if I can't hire people, why not have them as co-founders because then they will not ask for salaries. So they were two tech people and one ops guy and I was the sales guy. And when I started pitching investors, I realized how, so see, if you are an entrepreneur, I really believe this. You must know how all your stakeholders think.
00:14:38
Speaker
Your customer is one stakeholder. Your employee is second stakeholder. And the most important stakeholder is the customer after that investor. Now, investors don't know how investors think. They believe that even if they are opening a small restaurant, they can raise a VCV. So, you have an education missing and people come up to me and say,
00:15:10
Speaker
But secondly, nobody will invest. And I think if I knew that when I started up, I would have had to make this discussion, whether I want to make a VC business that can go really fast in 10 years or a business that makes me happy. I can make money. I can make money over.
00:15:30
Speaker
And I think I made that call when I started my second startup. I was very clear. I think me and my co-founder both are very ambitious people. I don't think we can do jobs. I can join the company and help that company grow really fast. But I think that ambition of going really fast.
00:15:49
Speaker
made us think about this. The 63 investors were very clear about how they think. Many people told me a lot of things more to me. And I used to think, I remember when I was a partner, a really great person, Samir. He was in Jamboree also. I was sitting in a cafe with him.
00:16:14
Speaker
Some of you told me, boss, sir, I will cry like in, Iran is there. How will you compete? When you say, you give me 15 million, I will also do the same. And I was so naive, by the way. So, I told him this and he being a great guy did not...
00:16:30
Speaker
laugh at me, and later he wrote a mail telling me that the boss, so I learned this the hard way. Nobody will invest in your business if it's not enticing for them. And banks will not give you a loan so easily. So, so you're learning, I think with those, I can zero to one, I understood how to make sure
00:16:55
Speaker
Why will someone put a place in order? Because I was selling the first three orders, four orders, I was doing them. So I knew how small businesses are thinking. I think I was made to do this because I have this relevant piece of experience. I have done software for small businesses. I have done marketplace for small businesses. I have tried to raise a visa round. How did you end up in Jambotiv?
00:17:25
Speaker
So
Framework for Selecting Startup Ideas
00:17:26
Speaker
as soon as I started looking for capital, I realized that there are a few folks who have raised capital. And I wanted to learn from them because I was not able to. So I pinged the founders. I told them, boss, I want to meet. I pinged a lot of founders. They and a few others applied. Then I started meeting the founder, Ashish. And I started discussing problems with him. He told me, I think, boss, problem to, hey, obviously, he's welcome.
00:17:56
Speaker
And when I was deciding to shut down, I told Ashish, I think I will have to shut and think about what to do next. And then he told Kiarath, if you are thinking, I think we have a role for him. And I joined in the business team because they were thinking the product. I thought, boss, business is something I'm really interested in. I want to know how can we grow faster than that.
00:18:19
Speaker
So post that two years in Jambotil, I learned how to go big, very fast. What are the systems that need to be in place so that you grow fast? That involves people, that involves process, that involves funnel management, etc. So all of that I learned there.
00:18:37
Speaker
Just break it down. What are the things you need? What are the things you should have done in a way when you, you had done the zero to one, one 200 was where you quit. But what were the things you should have done based on the Jumbo Tail experience? So yeah, first thing I would have raised funds. Second thing I would have done is I would not have changed me selling myself to the first 50 customers, because that would have given me a lot of idea around what it takes to land orders. So
00:19:09
Speaker
I would have divided the entire funnel, acquisition with activation, activation with retention. I was only doing acquisition. And then activation, part of it, and then delegating to someone, then retention the bulldog. When the most important thing is retention, now what I would have changed is I would manage the entire funnel for six months, and then would have figured out what it takes, and then brought the right people in place, set up the process, and then moved away.
00:19:41
Speaker
In Jambutil, I learned that Panch transaction was activated. And if he's not doing this repeat transaction, retention is not coming. And retention will only come when you actually provide some value. You will have to provide a value so that the guy comes back again and again. I learned the point of knowing the frequency of the problem the guy faces. If the frequency's problem is once in lifetime, you don't have a big business.
00:20:09
Speaker
For example, you buy a house once in lifetime. Now people ask me power play. My framing product is sufficient. Even if I make it made, I will make 10,000 rupees from one guy in the entire lifetime. That's not a big business. So such things.
00:20:36
Speaker
Observing for six months is very important. Jumping to conclusions is not good. Doing anything new, you need to observe a lot of things. And I think I really believe in this Uberga, there's a core value of Uberga. Ops first. They say, they have tech. We need to understand banana care. And to solve real world problems, you have to solve those problems. You will see a lot of marketplaces doing orders themselves and then setting up structures in place.
00:21:08
Speaker
When we were doing the software bit also, we saw what people are doing without Powerplay, tried to help them in that, and then made the product. So observing for six months what's happening, and then setting up structure, and then moving away. Because you know now if you put more people, more top of the funnel leads, et cetera, et cetera, business will come in. There will be a business in place.
00:21:35
Speaker
I am doing that right now. So I did that in power. Yeah, I think Airbnb famously had this approach. The founder said that you have to do things that don't scale early on in the journey. True. That gives you a lot of learning. And Paul Graham is the one who said this.
Strategic Insights on Competition
00:21:53
Speaker
I really like Paul Graham's essays. Okay, amazing. Okay, so you spent two years at Jumbo Tail, then what?
00:22:01
Speaker
Yeah. So when I joined Jambodil, I told Ashish, it was, dosaal me hab bhuche nigal dena? Or remind me to leave because I am not, I am not, I am telling you I don't want to stay for more than two years because I want to start my own company. And before my parents start saying, shadigarlo, shadigarlo, I have to have a company that works, otherwise I will not get married. That was like very clear in my mind.
00:22:24
Speaker
I told him, boss, I think I need to step out and try things. It was very supportive. Obviously, entrepreneurs like other entrepreneurs, they have a lot of empathy. So when I was about to quit, I started thinking what to do next. And I had this framework in my mind, how to select ideas. And I made that framework after reading a lot.
00:22:51
Speaker
I read about how users think people behave in India. I also read about how investors think and behave in India. I also read about what kind of companies employees want to join, blah, blah, blah. When I started thinking, there was a framework to choose the idea. And the framework had five or six parameters.
00:23:14
Speaker
Can you describe the framework for our listeners who are thinking of it? So disclaimer, this is only for if you want to become a VC funded. When I say VC funded, that means you have to become very big in 10 years. VC will not invest. That's their business.
00:23:35
Speaker
feel bad if they don't invest because you understand that's the business they are in. If you have thought that in 10 years I want to make a very big business, you are ambitious like that. You can't sit like, if you can't be like that person, this is for you. So the first criteria was market.
00:23:55
Speaker
How big is the market? Now, I'm not saying today. I'm saying in the next five years, what market is going to be big? You can't figure this out very clearly as a better algorithm. You'll have to read. So I started thinking about, for example, now it is sort of becoming big, which is AR, augmented reality. I'll come to why AR is a market, but back then I used to think AR is a market.
00:24:24
Speaker
And I thought, yeah, because everybody will put glasses and all that. Predictions were there and all. It went wrong in the future steps of the framework. The first thing is market. You need to be very clear why something is big or will become big. There has to be rationale behind it. Second is competition. See, if there are a lot many people in the industry solving the same problem, then
00:24:51
Speaker
You can't say that you saw a billion in the market. Because that's not how it works. They are working their ass off to be there. So new players cannot come in until you have a unique insight.
00:25:13
Speaker
YC promotes this a lot. They have this question in their form when you apply. What is the unique insight that you have? Anyways, competition. There is a sweet spot where you will find that few people have tried but not really succeeded. And why have they not succeeded is the unique insight. A competition means the market is not big enough.
00:25:39
Speaker
But
Founding Powerplay: Challenges and Growth
00:25:40
Speaker
there has to be some market where few people have tried. It's not worked. For example, Google was the 10th search engine. People were trying to become big business there, but nobody was able to figure out how to become a big business. What Google did worked out. Facebook was not the first social network, right? Ispace was there and not the office was there.
00:26:06
Speaker
It's a unique insight. Facebook has a network called network. Why a global network? Only a local social network in a college will work. Because most friends are concentrated there. That was the unique insight which Myspace did not have or could not have. Nobody targeted the users like this. So this was the second thing. There has to be a contrarian insight.
00:26:31
Speaker
against competition. It takes a lot of time to dig these. And you have to talk to users to understand these. And there was a set of questions I used to ask, this is the second step. The third step is, if this is there, the competition is sort of in this range, then you need to figure out where do these guys spend time online.
00:27:01
Speaker
You will not get money. If you are not a seasoned 2-3 times entrepreneur, you will not get money. If you are not a seasoned 2-3 times entrepreneur, you will not get money. If you are not a seasoned 2-3 times entrepreneur, you will not get money. If you are not a seasoned 2-3 times entrepreneur, you will not get money. If you are a seasoned 2-3 times entrepreneur, you will not get money. If you are a seasoned 2-3 times entrepreneur, you will not get money. You need to figure out if people exist online.
00:27:23
Speaker
Who exists online where? If you know that, you need to devise a strategy. But existing online has to be there. Do these businesses exist online? Luckily, the site supervisor was online and that's where the AGTM came out.
00:27:47
Speaker
The fourth thing was marginal cost. Whatever you're selling, just make sure it can be produced at mass, at minimum. If you have a brand or a production gigafactory, then the marginal cost of production will reduce if you have at scale production. Software or media is a problem because you make a great software and then you can sell it again and again. You make a greater piece of music or film, you can sell it again.
00:28:17
Speaker
So in my mind, it was clear, their software, they doubled down during it, because I know how to do that. So I said, there are two, three more things, but yeah. Let's introduce power play here for our listeners. So keeping in mind these five, six parameters we spoke about, just explain what is power play. OK. So power play is like an operating system for construction industry, because
00:28:48
Speaker
Construction as an industry has been way backward in tech adoption. And there is a reason behind that because the stakeholders who work in construction, they did not own a PC for a long time. They now have a computer in their hand.
00:29:08
Speaker
with internet. So this change struck later for these guys. Now, when I say Powerplay as an operating system, I mean they do everything on Powerplay. They procure material on Powerplay. They manage it on Powerplay. Then they sort of bring their labor on Powerplay. Then they take attendance of labor on Powerplay. And then whatever output is created, they take photos of that output, kya ka moo kya on Powerplay. And then they send it to their customers on Powerplay. So the entire construction management
00:29:39
Speaker
Entire construction happens on Powerplay. And that's where we proudly say, we are bringing construction online. So roughly, 1% of India's construction today happens on Powerplay. OK. Amazing. And so this is obviously a large market construction. Yeah, that's it. There's a billion construction of the idea. Competition? So that's the first criteria. There were players in the market.
00:30:08
Speaker
If you ask me about the real competition, it's WhatsApp and paper. But people don't really want to listen to that. There were small fragmented players where, for example, you'll find a few folks making software for big builders. Now they are making software because the builder thinks that he needs the software. And yes, he's right that there's a problem that he feels is there and he needs the software for that.
00:30:35
Speaker
The process of making product is not like that. So what we have seen is this fragmented players made something that the customers wanted exactly. They did not think whether the problem would be solved or not. So when I started noticing players, I saw Acheha. So someone has 10 customers. Someone has 15. Someone has 100. And these are medium-sized builders. So they have money.
00:30:59
Speaker
Short term optimisations, it's great that you take 20 lakh from the builder, make a software, an annual maintenance of 2 lakh. It's a recurring revenue business. But whatever you end up making is so customised for the builder that it won't scale. It's not a product. It's not a product. It's like a service here. So that's what I realised. So that's what I realised. So that's what I realised. Keep builders at pay.
00:31:25
Speaker
Right, sir. That is the first one. Okay, people have problem. That's why they shell money. Otherwise, they don't, especially Indian businesses, they don't give money if they don't have a problem. As a Chota Chota player says, this is something they have not cracked. And I spent in detail on that. Why are people not able to adopt to the existing software? Nobody thinks about adoption. See, you can make a software, but will it be adopted?
00:31:54
Speaker
Will the site team open it every day? Will they put in things that are required to be put in every day? So, I used to hear a lot from the customers when I used to sell this software in the early days. I asked them, what is the best way to open it?
00:32:18
Speaker
And then ultimately I will have to ask for a refund or leave the platform. Or you will have to put that data go on the site. It's a different business. I realized that software companies made whatever the builder told them to. But they never thought of adoption.
00:32:35
Speaker
And that's where we were different. When I realized this is the problem, I flipped the entire study. Because if this guy uses the product, we can make money. I am clear that the guy sitting on the top will pay if the data is there. So yeah, that was the unique insight. I was able to raise big money. Otherwise,
00:33:00
Speaker
We were figuring it out and very few real believers invested. And the question is one of the VC firms who invested when we did not have this insight. So yeah, that was the second thing.
00:33:14
Speaker
How did you raise money without even having the business inside? Like you pitched this idea of operating system for construction industry. Okay. Yeah, I pitched this, but I see the market was big. So that's that's the learning lot of entrepreneurship to have is can market big over the people would want to see if you say I'm a 10 million market, we see the stop listening.
00:33:35
Speaker
He will say, I am meeting Khatam. His incentive is not aligned. Why will he waste more, like five more minutes on this conversation when it's not going to give him something? The market was big. And when the first investor invested in their mind, it was pretty clear. But I am okay with that fact.
00:33:58
Speaker
Right? I feel the market is big. The entrepreneur is saying, these many people will pay this much amount. So my bottom up calculation says, I am OK. So I pitched a number of 100 to 120 million dollars in software revenue back then. After how many years? Like in five years time or something. Five to eight years, this revenue I'll reach. OK. How many people exist in the market?
00:34:27
Speaker
What proof do we have that they will pay X amount, which will make the math as 100 million? And there are good amount of people here in construction businesses a lot. The question was on amount. The math. So Abhijo, my pricing is the math works. And how did you acquire customers deeply?
00:34:57
Speaker
Like you said, that you have to figure out. When the first India question invested, we had only five customers. And three, four, one were in pipeline, convergently. And the process back then was call, meet, show software, get approval, get them to pay and then start adoption.
00:35:18
Speaker
This was a top-down approach. This was a top-down approach when I started. All of this unique insights started getting there. Before, the software did not work because of this reason. And then when I realized this was the reason, that's when we flipped. So now when we flipped, see, business owners spent time online. But more than that, the side team spends time online. They are active on Instagram, they are active on YouTube, and if there's a business, there will be one owner.
00:35:48
Speaker
But there will be 12 to 15 other folks. Right? So the touch point increases. So and the frequency of time spent was more when these bottom of the pyramid is targeted. So you won't believe I was able to reach out to one supervisor. When I started, there was no one doing this. Three rupees. One guy.
00:36:14
Speaker
Today, it's obviously increasing. So, what was your pitch to the Sukur Visor? They have to send this report back to the head office. Now, this report needs to have 3-4 sections. Now, the young guys really value saving this 15-20 minutes also.
00:36:44
Speaker
So when we used to pitch a click by report Nikalai, very curious to see how the onboarding is. All of the details are really good looking here. You don't have to change the font. You have nothing. It's very good looking. And you can just share it now. So this was the pitch and still the pitch.
00:37:07
Speaker
That's where we solve their problem. There are two, three more problems. And the report format is standard across industry. It's called a DPR, daily progress. Yeah, it's a very common term. It's actually taught in civil engineering. So it's fairly like everybody needs to send one. So you can have one product. So there are more formats of DPR, DLR, DMR. It's limited. There are not more than four or five formats.
00:37:37
Speaker
Take it. So this started getting you re-users. How did that become a business with paying users? So first five, six customers we bought top-down, we knew people have problems they will pay. When we flipped it, the major challenge was how to reach out to the owners of these people. So the first challenge was when the shared report used to ask for their details. And then we started reaching them out.
00:38:04
Speaker
So it took some time. It took some time to build the product to retain and then reach out, et cetera, et cetera. But this was the way. So now if someone in your org will download PowerPlay and start using it and share a report with you, we will get to them. And we will sort of try to reach out to you saying, here, adoption is there. If you pay this much, all of these problems will be solved.
Improving Operational Efficiency in Construction
00:38:28
Speaker
And that's the picture we make today.
00:38:31
Speaker
What is the pitch for paying to the owners? It's very simple. You save 5% to 7% on your project cost. And there are PAs and case studies we share. If you ask me to pinpoint and say what exact problems, a few things are there. First of all, if you are a contractor and you delay the project, there is a penalty that you pay. It can be in the form of money.
00:39:00
Speaker
or your image in the front of customer because you get a lot of referrals from the customer, etc, etc.
00:39:07
Speaker
Now, this is the middle. So, delays. So, all of these things contribute to delay. So, the first which is, was to delay proactively manage karpaoghe. You will not get a sorry figure in front of your customer or face penalties. You can say, this is the picture. This is where we are. Second is material cost. Because 60% of your cost is material today if you are a construction business.
00:39:36
Speaker
And by the end of the project, you realize key are you have wasted a lot of material because you ordered the wrong one or you are out late or blah, blah, blah. So making sure that you have the exact visibility. This is what I needed. This is what came in time. Time payer gather delay yoga, and then the cost is interact. A lot of pilfridge happens. What a lot of theft happens, which is not interact. That's the second thing. And the last is the smallest component of your business cost is labor. It's around 12 to 15%.
00:40:06
Speaker
But you have to pay to calculate your project manager. Because you will, all the registers, you will put that data away, you will advance, you will calculate, you will put sub-contractor level number.
00:40:23
Speaker
This happens in minutes of practice. So that was the best thing. Okay, okay. How do you ensure material efficiency in material procurement? How do you know the order count? One is that you will show the idea and all that, but you have an ideal state.
00:40:46
Speaker
So customers put it on the tool, first of all. So whenever they are thinking, when they're starting a project, they list everything. And there's a process internally that's followed. So Joey lists the project's team. He thinks, I need this, this, this, this to execute. And who buys is the procurement person? So this list needs to be traveling to the procurement guy. And then dragged by both parties, is it happening? This management happens on the tool.
00:41:16
Speaker
Now if you ask me what can be done to generate that list automatically. So that's something we are working on. It's a lot of, it's okay. So if you can know, if you want to do 1000 square feet of tiling, just say, how much sand, how much cement, how much water, how much tiles would you need?
00:41:45
Speaker
This is not like some rocket science, this is basic math. These numbers, since we have a lot of data gathered, we know these numbers. So we'll start going to recommend these things to the customer.
00:41:59
Speaker
amazing amazing okay so the project guy when he makes the procurement list he will also put milestones like on this milestone you purchase this and the app is tracking the milestones so the app is able to tell the procurement guy that this is the next thing to be procured because this milestone has been met yes yes okay okay take it got it so i understand procurement and obviously wastefulness is avoided because you have the exact set of stuff but
00:42:28
Speaker
Does it work like that in real life? I mean, I would assume real life is much messier than this. Things would not go as per plan and so on and so forth. Then how would you come to know? Things never go as per plan. So our customers know that the plan is made to be broken. But still you need to track something because you might aim
00:42:54
Speaker
for the stars, but land on the moon while you are there. So you still need to track, be proactive. And that's why people buy it. So okay, procurement, right? If it's clear, the project tracking bid, right? If you go to the nuance reasons, if you use WhatsApp, the
00:43:13
Speaker
You have limited storage, your phone will start hanging with photos. At least 15 to 20 photos per WhatsApp group lands on if you are running the business. The quality of those photos are degraded because it's compressed.
00:43:26
Speaker
These are smaller reasons why people everyday think that your partner is better. You don't get structured visibility. This all structure starts coming with the quality of data. Now with this amount of information you are better prepared to
00:43:48
Speaker
achieve your targets. I can't say, but you proactively know what's happening. And that's what is all now. The more and more you use, the more and more value increases. You can use more features to get more value. We just say milestone, you can put a feature of automatic DPR where
00:44:09
Speaker
You will be, your team will be reminded, we need to think about reasons why it has not happened. So that in the weekly meeting, you can discuss with these things are add-ons. You might not adopt to these features and you will get less value. But if you adopt more and more and more, you will get more involved in the process. Ideally the people miss a lot of things.
00:44:33
Speaker
And we realized that. We don't push them to use the entire software in the first day. We say, our boss started there. Because whatever you do is better than, five X better than what you are doing. And then let's... So you would also be asking them to upload photos of inventory and stuff like that through which you know that Pilfrij, why anyone? They put numbers in.
00:44:58
Speaker
Okay, numbers included.
Product Development and Fundraising Strategies
00:45:00
Speaker
How do you move customers up the value chain that they use more features? Is there a person who's guiding them or is it purely through prompts and wizards and so on on the software? So as I told you, I really believe in this ops first mindset.
00:45:23
Speaker
I really believe that if you do it manually for a few times, you will realize what it takes. So for the first 100 customers, we did it manually. And we realized what it takes. So a few things that we did was one thing is called progressive disclosure of features. We don't reveal everything the first day. It's not required. It will confuse you. If there are 10 things on the screen, you will not use the one thing that you came to use. So that's the first thing that we did.
00:45:50
Speaker
A lot of things are not visible when you come to the app now. It will start revealing themselves. We started working towards the motivation of the users here. Kunal Shah once I remember told a very interesting thing.
00:46:04
Speaker
OK, everybody is making things easy to use. For example, you can place an order easily. But nobody is looking about motivation. Why do I want to do that? And once we realize this, we start thinking here, why will someone put information daily? Why will someone look at it daily? That motivation, if you understand that motivation, there are eight to nine types of motivation if you go into it. And there's one great book, recommended by Kaurav Munjali, an Academy founder.
00:46:34
Speaker
actionable gamification. It works on the concept of how to make sure that the user is motivated at the right time to do things. So these are the things you only realize when you do things manually. You realize, oh, this is what is happening. And then you make sort of a journey of the user depending on his role and when he came and et cetera. So making a good software is hard. It takes a lot of thought.
00:47:00
Speaker
So, people usually ask me, how do I do this, how do I do this, how do I do this, and how do I do this? Making a great software for a lagging tech industry requires a lot of effort. So, all of these things, yes. You had this about half a million round which you raised in 2020.
00:47:26
Speaker
pre the pivot to bottom up. And then the next round you raised was about 5 million. So this 5 million was to build the product. Yes. Because the kind of product that was needed was very different. Help me understand. You must have mentally thought, OK, out of this 5 million, I'll spend this much on an engineering team, this much on a PM. What is the way in which you think about the cost of building a product? How do you decide what is the cost of building a product?
00:47:57
Speaker
It doesn't work that way, by the way. Okay. Then how does it work? It doesn't go cost plus plus. Okay. So if, if I were to put in the mat, so let's, let's think about the question like this. How an entrepreneur should think, how much should I raise? I think that is the sort of message that that is. Yeah.
00:48:22
Speaker
There's a really great, I forgot who wrote it, but some US VC wrote about it, saying startup is like peeling an onion of risks. So when you start a company, there are a lot of risks. Everything can go wrong. But then you need to mitigate one risk at a time so that your business becomes stronger and stronger and more predictive.
00:48:48
Speaker
When you start, it's all unpredictable. You don't know what will happen. But with time, you'll have to build predictability in your business so that tomorrow, when it goes public, public likes predictability. When public doesn't want Kiaat, Pasha, Malakar, what is that? So you need to list those risks down. So if you raise a round, you need to know what risks I will mitigate. So the risk I wanted to mitigate by raising the $5 million round was, can my product
00:49:17
Speaker
work for a business, that they spend a lot of time on the product, they do everything here. Is it easy to do that for them, etc, etc. If that happens, the next round I will raise is going to be, can I do this 1000X, 10,000X? Can I bring in 6, 7, 8,000 businesses? The next round I raised was for this. So, one risk at a time because
00:49:45
Speaker
It's good to be lean. You should not choose 10 risks. So this is how you should think. And I think the first biggest risk is just to look PMF gold. Whether your product really fits the market or not. So I think we, our PMF was achieved after the 5 million round. It was not achieved pre the 5 million round. Why 5 million? That's what I wanted.
00:50:15
Speaker
I did not ask for 5 million. I was out there raising a million. A million is enough to make a good B2B SaaS product? I think yes. Like you can hire a product manager and a tech team. Don't hire PM the first day. See, PMs are great when you know the problem.
00:50:41
Speaker
when you know here is the problem. Initially, you need to have a system where a PM, when joins, can easily find problems. I have done this mistake where I hired a PM and threw in a very unpredictable set of market where there is no user, nothing. The right person is an entrepreneurial person who
00:51:09
Speaker
can do multiple things, figure out chaos, miss a structure, and then... So I did not have a plan to bring in PM in the 5 million round. So anyways... Your story of how that 1 million became 5.
00:51:28
Speaker
See, this is the truth. Entrepreneurs should understand, you don't raise money when you need it. You will not get the right terms when you need it. Everybody does not have that freedom. Paul Graham wrote an article, you should raise money not for survival, but for growth. If you don't end up raising, you will not grow as fast as you could have, but you still could have survived.
00:51:58
Speaker
So from the first day, in my mind, it was very clear, boss, if I don't raise a round, I will still survive. I will make software revenues. I will run the company. But if I raise, I will raise to make it really big because that's what the investor also wants. So in my first round, I think the opportunity for the VCs was not as big. The story when they understood how big can this become was not really clear to them.
00:52:24
Speaker
In the next three months, when we pivoted to this approach, and we realized how big can this become now, I think that story changed and all the VCs I was talking to really understood achow, this can be big. And since I was talking to them, and people started believing this can be big, multiple people told that we would want to invest.
00:52:47
Speaker
When multiple people told we would want to invest, that's when to incorporate them, the round got bigger. Otherwise, you would have raised $1 to $2 million. What do you mean when you say you were talking to VC? So I would assume that you made a pitch. VC said, OK, I'll get back to you. End of story. You kept giving them updates, information. How did you engage them so that they were ready to put in a bigger amount? Updates is one thing for sure.
00:53:17
Speaker
But I have a different thesis. So one thing is, see, if you are, if you're in this business, you will meet all these investors for your seed round, then pre-seed, then seed, then series A. So you meet them quite often. Now, if you don't end up raising, you will meet for the same round. But in my case, it was like I went first. People did not invest. I raised from someone went second, then also did not invest raised from someone.
00:53:44
Speaker
So they knew me for a long time. And in fact, they knew me from my first start. A lot of people who invested today knew me from my first B2B marketplace startup. And they were like, what's the cost? This builds with time. So building any career will take more, like five to 10 years, right? So this is the career that I chose. Yeah.
00:54:11
Speaker
Today also, I keep on exchanging emails with investors that have not invested. And I keep on updating them here and there. When I meet them, I tell them, maybe not the entire story, but what's exciting. And then raising is a different story when you raise. So again, Paul Graham has told this, don't be in raise mode all the time. You will not end up raising and not even building a good company.
00:54:37
Speaker
When you are in the raise mode, you decide 50% of your time is going to go here. One co-founder will be here half of the time, and that should be clear. And business should be able to run without that co-founder's half of the time. And then you go all out. You start meeting everyone, et cetera. OK. So what you're saying is those 63 investors who said no to you, the right way to look at it is not yet. Not yet, yes. Yeah.
00:55:07
Speaker
Yeah, I think a few of them invested. And maybe a few more will invest in the future. OK. So let's continue the journey. So you got these site supervisors on, and then you started going to the owners. How did you figure out pricing? What kind of revenues did you start seeing? It's interesting.
00:55:34
Speaker
So it's an interesting question because what is the right price of your product? How to decide that? When you go online, you'll start figuring out a chart, how much value customer makes, and then charge 10, 20, 30% of that value. Then you go out calculating that value. You are an optimist as an entrepreneur. That value comes very high.
00:55:58
Speaker
Can you guess what monthly subscription I asked my customer to pay where I did this math? Any guesses? Any guesses? Wait, couple of thousands. I asked one lakh rupees per month. I was ridiculed by the customer. But because of that, I saw the advice, I followed it, I quoted a price, and they will also write,
00:56:25
Speaker
It will seem high to the customer, but they will value your product more if they pay that much. The problem is people don't write timelines. They don't tell how much time, what learning, et cetera. So I scraped all that first five customers were on 10,000 pricing. But when I started doing this bottom approach, I realized a lot of people are coming in and, uh,
00:56:54
Speaker
10,000, everybody's like, this is way high. So whatever the 10,000 calculation I thought, I did not see it becoming true. So then the first hypothesis was they have not used the product a lot so that they can value it. So let's wait for their retention and option and then pitch them the price. And we did that. We made sure they are adopting to the product and et cetera, et cetera. And then we started pitching again.
00:57:24
Speaker
A lot of things are involved here, one the kind of your customers. For example, if it's a builder in the turnover range of 10 crores to 50 crores, then he will be willing to pay this amount. So pricing bhajada.
00:57:39
Speaker
audience dependent. So what we instead decided was let's have this on the backend. If this problem comes, we will pitch this price. If this problem comes, we will just pitch this price and slowly we adopted it to a three tier plan where you will end up if you are a bigger builder, you will end up buying the bigger plan because the right things are present there because that's the problem you face. So as a builder, you don't face.
00:58:08
Speaker
labour-building problem because you subcontract your labour, you don't even hire a labour. See, that's not a problem that you will face. But that's a problem that smaller guys will face. We got clarity, but there was a lot of learning around, we were charging 1000 rupees per month, back then we have, this is Armiton Yura, let's make it 1000. And you won't believe, Akshay, today from that 1000, we are back to 10000.
00:58:35
Speaker
Amazing. The 10,000 is your cheapest plan. No, the cheapest is 3,000, but the most selling one is 10,000. Amazing. So there are 3,000, 10,000 and 30,000 plus. So the most selling is 10,000. So it took a lot of time to understand air. But we slowly, slowly bumped up the price as the product improved, because the product also improved the last 100 years.
00:59:03
Speaker
How did you build the product without the PM? Even things like the wireframes. I'd say you heard it.
Product-led Growth and Niche Markets
00:59:10
Speaker
Like how it should flow. We had to go. You didn't need a PM? Like your front-end, back-end wires together. We needed a designer. We got a designer and a developer. But me and Shubham were doing all the product things.
00:59:31
Speaker
Then then we realized was I think we are not like the best out there for this So we we start looking out for people Who could be this and I think? Pach million around kebab we brought Okay, I brought a really experienced folks not really ten years no three years really ambitious know the basics ready to
01:00:00
Speaker
hustle because customers won't even answer your calls. You need a PM who's part customer success, part PM. I think the future growth of those sort of PMs in the organization is not product. I used to think you have now joined product,
01:00:25
Speaker
We grew in product, but I realized those people were so dynamic and generalists that they later chose different roles. So, I've seen those people are not always product people. Some people became business folks, some people became successful.
01:00:46
Speaker
So it continued the same way, like onboarding site-level folks and then upselling it to the owners. So today, there is a good amount of brand. So recently we have started taking part into events also where our customers only tell us, you should talk about yourself because a lot of people will find value, etc.
01:01:14
Speaker
The owners also show interest. The top to bottom funnel is also opened. And they also request, but our way is to, sir, no. You don't, don't come into a subscription until as you have conference, your site team can use the product. So you start using the product and you pay when you. So bottom up, bottom two down be ata hai. And we also cater those requests. 70-30 hai.
01:01:43
Speaker
This is what would be called as PLG, product-led growth. Yes, and it's hard. A lot of basic things are... So I also learned this along the way I used to think. But you need to think a lot. You have to go on a lot of details. You cannot conclude quickly. You have to... A lot of things I think which are right, PM.
01:02:10
Speaker
can force. Otherwise, as an entrepreneur, you will be in a hurry. But that right PM will stop you from leaning. So if you really want to do this in the long term, in the right way, this is how to do it. Don't rush into
Future Scaling Plans for Powerplay
01:02:24
Speaker
this, et cetera, et cetera, and all those things you learn. Help me understand how you implement PLG, what you learned from a good product manager in terms of implementing PLG. When doing PLG,
01:02:39
Speaker
first thing I understood was, if you ask a business on a startup, who's doing PLC, saying that PLC, who is the user? And the customers, if the startup says that my user is a business, or the business owner,
01:02:57
Speaker
They're not doing PLG. They're saying they're doing PLG. Because when you do PLG, you will say, my user is a site supervisor who holds a diploma from a local college who works in a company that is the turnover range of 1 to 10 crores. They do only these projects. Hence, his daily work only involves this. And hence, the problem faced by him whose frequency is really high is this. And that's what we saw.
01:03:29
Speaker
So this is something I realized. And in this process I learned. See, as an entrepreneur, I told. So now your goal is over. Time should be like 200 million. But the problem is, with this approach, your mind starts thinking big.
01:03:47
Speaker
But when you start execution, it's niche. A lot of niches will give a big market. So when I told this, who is your user, this is a very small niche in the big market. But if you don't solve for this niche, you will not be able to capture the ads and niches and cover the whole market. So this is the difference when you understand investor's perspective and then your customer's perspective. And you need to understand both because you are a founder, you have to make sure it works.
01:04:16
Speaker
And I realized this without a great set of product matters in the team. Construction. Then we became 1 to 100 crore construction. Then it became focused and focused. Today there are teams specifically for a persona. So that is the detailing. It's really required in product because these nuances get lost when a salesperson is talking.
01:04:44
Speaker
All of that is in his mind, sales and success functions. Since they are good at sales, they will make sure, but if you want the product to do the same, you need to put all of that in the code.
01:05:04
Speaker
So 2022, you raised your next round of 7 million. So this was like post PMF, like that you would have discovered PMF, this would have been more of a growth round. Yeah. Why do you need to spend on growth? Because PLG is fundamentally like inexpensive, right?
01:05:24
Speaker
If you think about PLG, there is customer acquisition, and then there is activation, and then there is retention. And engagement comes in all the functions. Now, if you are a founder, and you are asked if you are a PLG starter, how will you prioritize? You don't have that much time. So usually the privatization is retention, then activation, and then activity.
01:05:54
Speaker
So what we were able to figure out in the 5 million round was retention and activation is possible. But acquisition, we paid channels. Now real PLG becomes very cheap when the acquisition also happens through product.
01:06:13
Speaker
And it happens in our case, but it still involves to seed. For example, if I were to do something in Karnataka, I will have to seed, invest there, put some marketing budget, and then people start using, and then there will be some. So I think acquisition piece, we are still working on how to make sure that we are able to acquire 2 lakh businesses in India who use the software. That I think is still in sort.
01:06:40
Speaker
So you need to spend until you reach that point of inflection where word of mouth is more powerful than... Yes, and that's why smaller networks tend to perform well because you can reach that critical mass really quickly in a smaller network.
01:06:58
Speaker
So, for example, in our case, the atomic network, the smallest network is a city, because most of the construction businesses will do projects within or in the area of the city, they will know other businesses in the same area, they will work with other contractors in the same area. So, this is the network. So, now, if I cross X percentage of businesses in that city, I will start getting that product lead.
01:07:27
Speaker
acquisitions. So, I think we are working on that and that's still to be solved. Got it. Okay. So, one part of your revenue is pure subscription revenue. There are other opportunities also, right? Like procurement, there could be like a marketplace or like, you know, in terms of helping fulfill that procurement, that is a massive, I mean, there are unicorns just in that space, right, of procuring construction material. That's true.
01:07:58
Speaker
Yeah, absolutely. So let's take an example. Let's take Apple as an example. I'll draw some analogies. Feel free to add in. Apple started rolling out iPhone in 2007, 6, 7. And it brought in App Store in 2009, not 2009, I remember. And then it brought
01:08:27
Speaker
recently brought Apple TV subscription. It also brought gaming apps subscription. Essentially, what's happening is there's a foundation which is the iPhone, which is also the cash cow for them right now. The foundation is now able to give them more revenue sources. But this foundation has very high engagement. Because of that engagement at scale, they're able to sell other things to them.
01:08:56
Speaker
Now, I like to think that we're doing the same thing. And it takes time to build this foundation. And I think we're building that foundation. And when that foundation reaches a particular scale, I think one of these opportunities can be opened. Because the amount of data people put in, the amount of trust they have on the platform is immense. So all of these opportunities become really, really practical.
01:09:25
Speaker
What all opportunities could there be? What is, of course, procurement of material? I know what they should buy, what they would buy in terms of material, in terms of what kind of contractors they need, skill-wise. What kind of labor would they need? I also know... Like a services marketplace also you could do in a decent way. I'm just saying the foundation can recommend these things. I also know that
01:09:55
Speaker
I have underwriting data for them and I know what kind of expenses they make. I know whether they deserve credit at this much. What is the credit worthiness of these people?
01:10:07
Speaker
This foundation with a very high engagement, the data it gathers opens a lot of these possibilities. There are businesses, benchmarks in the industry who are solving this for folks. There's always the Netflix was there, but Apple TV still came in and take 10% of the market share. So what I'm trying to say is,
01:10:25
Speaker
the foundation needs to be really strong and then multiple other things can be done on the top of this platform and that's why I say it's an OS. Because then third-party apps and services can use the OS to reach out to these people and sell and we can make a commission there. What's your A&R right now? What do you expect to end this year at? We will end at 1 million. We started monetizing the starting of this financial year in March.
01:10:54
Speaker
So in one year, I think we'll hit 1 million. We are already close to half a million. And what are you projecting next couple of years? I want to reach 10 million in next three years. Just from India or will you also go outside India? Just from India. We'll focus on India. We'll make sure.
01:11:20
Speaker
There's high density of businesses using the platform. It acts really like an OS. And I think once we do that, we'll be able to do a lot of other things. The high density will give you opportunities like credit or marketplace. Yeah, it involves a lot of focus here because I can do those things today, but because there are a lot of competitors there,
01:11:47
Speaker
But the thing is, if I don't do this right, it will not give the fruits that we are expecting to give. So Facebook did not make money for, I think, the first three years or five years. They were focusing on making sure that the people are engaging on their platform. And now, obviously, when you focus on the right problem at the right time, again, it's the risk mitigation. So this round is not about
01:12:15
Speaker
What else I can solve? This is about can I reach that scale? Right. Yeah. Yeah.
Leadership and Company Culture
01:12:20
Speaker
Yeah. Yeah. OK. What's your headcount today? We are at, I think, 75 to 80. Which is pretty lean, right? Yeah. And how have you kept it lean? Like you use more of PLG, very less human intervention in acquisition and conversion and retention.
01:12:44
Speaker
So we focus all the bandwidth on the problem that we're trying to solve. So we don't choose a lot of problems to solve also. So if you ask me if our goal today is to make sure that our activation retention was figured out, now we need to make sure it sticks to the same thing at scale and figure out how to scale more people.
01:13:03
Speaker
So yeah, all the bandwidth in these two categories only. We don't pick a third item. Even if we do, it is very close to my chest. It's like a CEO's office or a founder's office project. People don't know about it, et cetera. And yeah. So we just pick a few things. Otherwise, more money, more problems can be solved, more problems.
01:13:29
Speaker
You have like a founders office person who helps you with these special projects. So what's the stage at which a founder should think about hiring someone in that kind of a role? So it can be different for different people. I feel a founder's time should only go to the activities that... So see, it's like playing chess. You need to think six, 12 moves ahead.
01:13:58
Speaker
You already know the next five, three, four, five moves. But to execute those three, four, five moves, you need people. And if your time is going a lot in these three, four, five moves only, you need one person. So that person can take those things up and you can think about six, seven, eight moves ahead. Because ultimately, leverage can only be created. Nothing happens overnight, right? So you start thinking about things.
01:14:28
Speaker
So I started feeling that when I raised the 5 million round because a lot of expectation was around KA sub Ojai Ga and I knew Hoga. You just write amount of tracking, write amount of meeting people and discussing brainstorming etc was required. So I thought maybe I need someone who can start tracking this for me and I can catch up with him and the team runs in a peak. And what are the qualities of a good person for this round? What do you look, what did you look for?
01:14:58
Speaker
I think this person has to be a great operator. Or when I say operator, if there is a bunch of tasks you have given to this person, you can be held and confident that this person will not only solve this problem, but will set up a process that tomorrow if this problem comes, it will be solved. Because you can't get into that. And if this person is really good at this, your life is sorted. That's the first thing.
01:15:25
Speaker
Second thing is, this is something I realized lately, the person has to be as ambitious as me. And it's difficult to retain such people. But if you get the combination of these four, these two things, say, I'll tell you, a lot of people when they are not ambitious, any new problem will not excite them. Because it's like,
01:15:50
Speaker
If you're a great operator, you'll be in that mindset. But discussion, if you don't discuss, there'll be no thoughts around those things and you can't think more, right? Thinking is like talking about stuff and then connecting to different things, et cetera. Those ambitious, being ambitious is very important. So my discussions usually revolve on two things with the team in this setup is what can we do to become like,
01:16:19
Speaker
really begin two years. And we should do. And if we decide that this needs to be done and we can pick these items, what did we do last week to make progress on this? And it's very simple. If answers are pretty clear to the team, I know that they are on time. How do you judge this by looking at a CV? I don't look at CV.
01:16:45
Speaker
I mean, typical founder office hiring happens where founders say, okay, I want someone from a big four consulting company background, or I want like tier one MBA. No, no, that was not the criteria with us. But there is a reason people ask for that.
01:17:02
Speaker
In consulting, the folks who go into consulting, the bar is really high in terms of doing work. They're always on. They have to travel. They have to be on track. Everything has to be like... When the communication also happens, if you see how they communicate, lead with the conclusion and then show the path KKCI,
01:17:24
Speaker
These things are really good when you are talking to a higher management person because that person needs visibility in like 10 minutes. So I think there is a reason people do that. I did not know. So I did not put this condition, but who I ended up hiring, uh, had a big foreign experience. So that's why I need to connect it to the odds. This is, I don't know. This works with me. I have seen people who are, uh,
01:17:53
Speaker
this ambitious and if they're a great operator, you take their interviews, you check things, but I ended up rejecting my achieve of stuff. I told him, boss, Yogan, then he convinced me showing a deck why hiring me is a good decision and you cannot make a bad decision like this you're making. Such things really impress you because that guy is a great operator, he's ambitious, he's a great operator,
01:18:23
Speaker
And I have seen this happening in multiple hires that I have made. They are convinced, then they make sure. I really like such things. I really like if you have looked at everything about me in the interview, and you drop a message after the interview, one day before the interview, and seven days after the interview, because in real life, that's what it takes to
01:18:50
Speaker
get things done. So these are signs. Do you plan to raise more? Like Paul Graham said, for growth yes, for some I will know.
01:19:07
Speaker
OK. So I think that, basically, companies are a set of decisions. And the best companies are companies who take good decisions. How do you kind of ensure, as an organization, you're taking good decisions? Because you cannot personally be taking all the decisions. So how do you build that DNA of taking good decisions in a company?
01:19:37
Speaker
Yeah, so option one is you hire the set of folks or promote the set of folks who have been right most of the time. Looking at data without looking at data because their judgment is better than the others. And if you can trust that judgment and you can delegate that judgment, then only more decisions can be taken in a limited duration of time.
01:20:06
Speaker
this seems to be the right and then the other way is that you can maybe ask people to follow a framework of looking at data and then A B test it and then blah blah blah and then reach at the right conclusion.
01:20:21
Speaker
The system takes some time to run. And I don't know. The other option is making sure the system is really adopted in the organization so that everybody, while taking a decision, runs to the system and gets the decision out. But I really liked a podcast. We put Kunal Shah, told about this key. Can you ever imagine RRR movie being A-B tested? Amazing.
01:20:49
Speaker
Because when the stakes are high, can you imagine Elon Musk saying, I need to advertise this rocket launch. He can't be wrong. He can't afford to be wrong. In software, we can afford to be wrong. So we do all of these things. But what if you can't afford to be wrong? And I think in the early days, you can't afford to be wrong a lot of times because you have limited runway. So option one seems to be more feasible today with all my
01:21:19
Speaker
All things in my mind. I guess like this is the difference between a large organization and a startup, right? Like a company like Microsoft would do A-B tests for every decision. Yeah. A young startup would go with a mix of intuition and I think intuition is also
01:21:42
Speaker
in a way of ingesting data without realizing that you've ingested data. That's here. It's not in an actual sheet or a Google sheet. Your subconscious mind has ingested data and arrived at a conclusion which we call intuition. Correct. So, more such people in Adelaide really help because they are like these folks that you can trust to take this call and you can just say, by this call you need to take
01:22:11
Speaker
Tell me why you took this call, but I have enough trust that 8 out of 10 calls of yours are right. So, sort of 6 such things. And I think this increases the chances of success a lot if you have more such people in the team. Although to discover such people also needs a founder to be comfortable giving up decision making. If you don't give up decision making, you'll never discover who's good at decision making.
01:22:41
Speaker
Which is hard to do. You always have that fear that what if he doesn't take a decision as good as I do. Yeah. That's true. Either the founder needs to have a lot of empathy around how this guy is thinking and develop confidence. I think he's in the right direction. Or you sort of...
01:23:08
Speaker
make a small team of three, four folks who compliment each other's sort of wrong decision making. I don't know. I will learn this.
01:23:21
Speaker
Like a group decision will always be better than an AI. But there are risks there also. Sometimes consensus leads to the worst issue in that group. So group thinking is usually, I don't know. I was just thinking. Cool. Any other questions? I heard this from a great, I think Brian is the person.
01:23:51
Speaker
He's an entrepreneur in the US. He told her, you can't make great products in the early stage by consensus. Usually there's one guy whose intuition is really strong in the early stage and just follow that guy because blah, blah, blah. So this is something I've come to believe that in some specific areas, some people's intuition is really good. Just trust them on those specific areas like APIs. Hit that API, get a result, and then proceed.
01:24:20
Speaker
Some people are really good at thinking how to make an easy to use product. Some people are really good at thinking, what can I say that this guy will buy? So I
Conclusion and Listener Engagement
01:24:29
Speaker
don't know. Maybe this is the way to go.
01:24:32
Speaker
And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to this show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in this show? I'd love to get your questions and pass them on to the guests. Write to me at adatthepodium.in. That's adatthepodium.in.