For our fifth session of ‘rapid fire questions’, we’ll be speaking with Aravind Venugopal Nair, founder of Neuropixel (AI-based retail cataloguing and virtual influencer platform for eCommerce brands and virtual retail applications), and Kshitij, founder of HuddleUp (AI-based work culture platform providing the right tools and learnings to build engaged productive teams)
What is the process of defining the Ideal Customer Profile?Â
Aravind:Â
Would personally try and define 3-4 customer cohorts rather than a single Ideal Customer Profile.Â
Like, say, for example, if you’re a premium fashion brand, you could have a couple of unique Tier 1 geographic cohorts (like Fashion Forward, Millennial, etc, and a slightly older experienced professional Y), and then a different cohort for Tier 2 customers who need to be targeted differently.Â
Usually, 90%+ customers can be classified into these cohorts, with unique marketing strategies for each.
For Enterprise Tech as well, it could be similar where you would need a different customer profile depending on scale, geography, requirements, payability, etc
The process itself would be more from analyzing your first 20 customers and then classifying them into each bracket. For the first 20 customers, I would experiment at different ends of the spectrum to understand each of their needs better and then build this profile
kshitij:
In our experience, what it takes is a lot of experimentation with user personas & product positioning. We have been talking to a lot of users - understanding their demographics, needs, technographic, decision-making & a lot of other factors and mapping them to our business offerings to identify where we fit in. It’s all about finding your super-users, the ones who have an innate need for your product with the capacity to pay.
What are some of the biggest challenges with respect to business development in the Indian market and the US/RoW market?
Aravind:
India
Relative to developed markets, the propensity to pay for SaaS solutions is lower. Less understanding of development costs, training set costs, compute data, etc.
The sales cycle can get a bit bureaucratic. For instance, once the alignment with business/marketing teams is complete, then it goes for a separate discussion with a commercials team, and only then to legal for closure finally.Â
US/RoW
We haven’t actually started this leg of the journey yet
Identifying the right stakeholder in geographies where you have a limited network might be one of the hardest aspects.Â
Facilitating a warm introduction.
Kshitij:
In the Indian market, HRTech as a category is still in very nascent stages. The founders/leaders are still emphasized so much on solving the operational & transactional aspect of People Management that employee experience & well-being takes a backseat. However, the pandemic & the ongoing great resignation wave have made people realize how important employee well-being & engagement is. This has given us a great doorway into the Indian market with all the high-growth companies trying to solve it.
The US market is a different ball game altogether. The market is mature, the competition is high, and local presence is required to sell - hence we have taken an entirely Product-led growth. We have reshaped our product as plug-and-play in Slack & Web where users can come & try out the product on their own with an affordable subscription plan. This has helped us in winning our early US customers.
How can sales cycles be defined and reduced over time? How should founders allocate capital across business development to avoid high burn before achieving PMF?
Aravind:
Developing a playbook for different kinds of customers
Optimizing the sales team in terms of specifically having them master selling to one type of customer
DemandGen optimization through trial and error via different platforms
Strongly believe that one of the co-founders needs to be leading sales for an extended period, and never stay away from that for too long
Allocating sales personnel according to future ROI from a client, not what the ROI is today. Play the long game.
With security concerns & data breaches rising, how do you tackle and maintain trust with your clients?
Aravind:
ISO certification
Only taking information that is absolutely needed through APIs. Fewer good-to-haves: builds trust when you say you don’t need XYZ data
Kshitij:
Data security & privacy is of utmost importance to us. To ensure safety for all our clients - we are GDPR compliant, VAPT safe to host certified, follow industry-standard encryption protocols & have third-party periodic audits to maintain high-quality benchmarks.
What are some of the biggest challenges that the industry faces right now? And what trends can be seen within the industry going forwardÂ
Aravind:
Cash optimization and ensuring that there are at least 2 years of runway. Fundraising at similar valuations without good cash flow is going to be quite challenging
Business models probably need to become a lot more pragmatic - no more a scale-at-all-costs philosophy
Hiring costs for developers/techies were very out of whack for a while. People with less than one year at an organization were expecting a 60-70% hike. That normalization will probably materialize in a bit
How to tackle investor expectations to strike a balance during the early stages of product development & revenue generation?
Aravind:
Setting the right expectations is something that we could have done better. We always communicated aggressive timelines and took on challenging outcomes - in hindsight, that’s probably best left internally, and outwards should probably be more cautious/pragmatic.Â
Investor selection is equally important - founder’s lives will be easier if the investor has experienced similar situations from other companies in broadly the same space
Kshitij:
I believe the foundation of managing expectations is Transparency. Everyone understands that the journey of an early-stage startup requires a lot of experimentation & iterations to achieve PMF. It’s just that, you as a founder, need to be vocal & honest about every decision you are making with a rationale behind it.
Also, it’s important to try not to solve for too many use cases at an early stage & find one that gets you initial growth as the needle needs to keep moving.
With high costs associated with credible talent, what approach should early-stage ventures follow with respect to hiring without compromising on technical capability?
Aravind:
For mid-junior level employees, I would pay just about market rate and give them an equity kicker so they feel they have a stake in the company
The more senior you go, the more of a risk/drawdown they have to be taking on the fixed component, and the more of an equity payoff they should have.Â
For instance a prospective employee at a 6L salary, I would offer 6L+50k Equity. For someone already on 40L, I would offer 20L + 25L ESOPs which should give them a 5x return as compared to a mature startup if the startup is successful.Â
Kshitij:
We are firm believers in personal referrals. Every member of our team today is either a friend, an ex-colleague, or an acquaintance. So, I always suggest finding someone in your network as the first-level of trust & credibility is already there which helps in the later stages. Also, be generous with ESOPs - your early hires are the ones executing your vision into reality, so they need to grow as the startup grows.
Plus, you as a founder need to ensure that your initial team members have to be the biggest promoters of your startup’s vision. So, building a culture of growth, respect & inclusiveness goes a long way.
As tech advancements occur and market opportunities evolve rapidly, what approach should founders have to distribute their resources across the primary product and potential products?
Aravind:
Very interesting question. We’re grappling with this right now.Â
Unfortunately, it has to be an ‘it depends’ response - at a broad level, I would say don’t sacrifice your core product offering and deployment timelines, but if there is any opportunity to execute a small dev-effort for disproportionate returns BECAUSE of the skill-set that you have developed, then it should definitely be done.Â
Diversification can be a good story if you can tell it right. :) Important to stay with the same theme and same customer type though.
Kshitij:
Oh! This is really tricky. Don’t spread too thin, too fast. Since you as an early-stage startup are always battling with prioritization, I guess it all comes down to what you firmly believe at that moment. You always need to keep evaluating factors that can give you the expected growth. I think the first approach should always be analyzing your primary product & see what all it will take to keep it growing. Potentials have to start as experiments, and if they outgrow your expectations, you would already have an answer for resource distribution.
What would you say has been the biggest challenge that you faced in the first 1 year of your journey?
Aravind:
Fundraising on a story and a plan were tough. But I suppose we’re lucky that we’re doing it in an era where the ecosystem is that much more evolved
Hiring talent is also very difficult in a good market, especially if you’re trying to be frugal. Need to find the right mindset - someone who is not looking for a comfortable life but disproportionate gains if they are ready to grind harder
Understanding contracts and investor asks, and knowing when to push back is the biggest learning - in retrospect, many things I would have done differently
Kshitij:
Finding our ICP. It has taken thousands of user feedback calls, lots of failed experiments & multiple positionings to give us an indication of our ICP. However, I believe it’s an ever-evolving process & the search will continue.
That's all for today! We’d like to appreciate our portfolio founders Aravind and Kshitij for taking out time of their extremely busy schedules to add valuable insights to our subscribers.Â
That's all for today! This space is for founders in the sectors and solutions we are bullish about, therefore, a call out if you are a founder building in the Enterprise Tech space, you can reach us at connect@huddle.work and we look forward to brainstorming with you. If you are an enabler and investor and would like a further look into our ecosystem, then we are happy to dive deep into these sectors alongside you.
These are popular questions that have been asked by our subscribers and have emerged across each of the themes covered. (Keep your questions coming our way and we’ll continue our best to decode for you!)
