About a year ago, I quit my job at a kickass computer vision startup in Palo Alto to build my own venture. I have, since, worked on six projects, which I decided not to pursue (list at end of article). Here is a summary of how I approached two of the concepts I worked on.
Concept 1: Chowk
A platform to enable home-makers in India to find an audience for their largely unappreciated skills. Think a combination of Etsy and Reddit, for home-makers aged 25–45, non-English natives, <Rs. 15L household income.
- You can open up the ‘creator’ base, with a safe space for women to connect and learn from each other.
- Women are under-served when it comes to finding content and community online
Women drive 70–80% of consumer purchasing by various estimates. Eventual monetization here was less of a concern, if I could crack the community piece.
My MVP was a Whatsapp broadcast list, where we shared five content pieces every day on subjects our ~500-odd audience most wanted to hear about.
What I learnt
As I spoke to ~200 women in Ahmedabad and Bangalore, two things became clear:
- Working from home and earning a few bucks as pocket money for discretionary expenses is fun, but being financially independent is not a priority. Their lives revolve around their children. The little free time they have, is invested in activities around their kids.
- Women are less entertained by short-form content online, most of their time on the Internet is spent on more utilitarian needs. Typical searches include ‘How do I make X?’ or ‘Stories/homework help for kids’ or ‘Home remedies for Y’. YouTube and Google are the primary sources of information. Mom-only WhatsApp and Facebook groups also solve for crowdsourcing answers, as well as the need to be heard and empathized with.
Anecdotes that stuck with me:
- A Bangalore woman who had only browsed YouTube two or three times in her life, to look up how to ‘improve’ her kid’s complexion.
- A woman in Ahmedabad, who has given away her mobile phone for the years her son is in classes 9 to 12, to set a good example and ‘save him from distractions’.
At the end of two months, it seemed apparent that the needs of my target audience are being met by existing platforms. I did not have a particularly differentiated creator or consumer proposition.
It is always easier to get/prove supply than demand for aggregation plays — it does not do much to validate your business.
Concept 2: HQ2
A ‘remote office in a box’ for Valley startups looking to hire engineers in developing countries. As an Indian kid who grew up on the Internet and was always starry-eyed about The Valley, the labour pool mismatch between the ‘3 million Indian developers’ and the engineer-starved American startup ecosystem (80K new tech jobs in the Bay Area in the last 5 years versus only 6000 new tech graduates) seemed like an opportunity that was both commercially large and appealed to my sense of fairness and symmetry.
- Cross-border recruitment can be solved in a productized manner
- HR-IT-Payroll is a pain point for remote offices/employees in emerging markets
The success of TopTal, Gigster (both ~$100M in revenue) implied that a strong business can be built. The question was whether it is possible to scale this fairly services-oriented business.
My MVP was to work with a couple of startups in the US as a recruiter+ops consultant / ‘India head’ and look for ‘productizable’ gaps.
What I learnt
- Series A-C stage enterprise startups are the early adopters. Unlike B2C startups, their tech-product iteration cycle is slower and allows for a remote engineering team. It is also more common for them to have at least one Indian engineer in the founding team – hence they are already sold on the quality proposition.
- ‘Faster hiring’ and ‘deeper talent pool are better sells than ‘cheap engineers’. Compared to $150k+ salaries in the Bay Area, even an $80k cheque for a similarly experienced engineer in India is a sweet deal. However, most high-quality startups are not optimizing for costs as much.
- The twelve hour time difference is definitely a deterrent. I met some founders who preferred to work with folks in LatAm and Eastern Europe over India for this reason
- The demand risk — common among companies targeting startups — is that your customers either die or grow and churn. Once a company is Series D+ and has a >50 member India office, it is always in their best interests to manage everything in-house. You are mostly reduced to one of many recruiting channels.
- The rate-limiting factor here, unlike most startup ideas, is the supply. If you add up the number of engineers in (loosely defined) high-quality startups and big tech companies in India, the number across experience levels is under 30,000 — all of whom are much harder to poach given the triple whammy of (i) fat paychecks, (ii) satisfying work-life balance and (iii) prestigious employers. Not to imply that good engineers don’t exist outside these companies — but the interview-to-offer conversion rate drops materially for the ‘non-elite’ segment.
- Our biggest gap as a country remains skill development, and that is the more critical problem to solve here. Which is why I feel that an InterviewBit or Pesto type company is best poised to win this market, irrespective of income sharing agreements. Just as IIT has built a brand around great placements (in spite of a primitive and largely isolated education system), these learning companies could crack skilling and by extension, placement. They can then can go on to charge students a proportionately high tuition fee. Consequently, their revenue is limited not by the volume of remote jobs, but by the number of students they can sustain in a batch.
- An angle I considered was HR-IT-Payroll as a service (Gusto, Rippling) for the top 20 remote destinations. This thesis breaks for the same reason. SaaS has historically been a capped play in emerging markets: companies will not pay a dollar above what it would cost them to hire a person instead. (The person is also more customizable than software, which is why she/he wins even at price parity). Sidenote: a Chinese investor pointed out this very interesting fact — the Chinese consumer internet market is in the trillions whereas their cumulative Saas revenue is < $5B.
Here is a complete list of the six projects I mentioned. My experience does not mean that these ideas will not work. The objective here is to help folks looking at similar markets quickly access the information I spent months collecting. Good luck!
- Chowk — women-only community for Indian home-makers to enable Etsy+Reddit
- HQ2 — ‘remote office in a box’ for Valley startups looking to hire engineers/sales folks in developing countries.
- WithPockets — fashion brand for women looking for functional + comfortable clothing
- Uno Coaching — leadership and communication coaching for young millennials in the US
- [redacted] — social recommendation-based e-commerce
- Honest Education — education loans/credit cards for immigrant students in the US
Signoff : Getting feedback on a product concept from folks who don’t belong to the target segment is basically inviting reasons as to why it won’t work, until the point you show them that it does. In one word: useless.