Episode 77 / August 9, 2020

Nikhil Kapur, STRIVE Ventures on different SaaS models in Asia

hr min

Episode 77 / August 9, 2020

Nikhil Kapur, STRIVE Ventures on different SaaS models in Asia

hr min
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Nikhil is one of the most Tech & Product-centric VCs in Asia. This probably comes from his early career with Microsoft, and later with Pie (acquired by Google). He also founded a company called TommyJams, a tech-enabled Artist management platform. He has been with STRIVE Ventures for over 5 years.

STRIVE’s portfolio includes HASURA, Classplus, and Saleswhale among others. In this podcast, Nikhil shares his experience of investing in SaaS startups in Asia and helping them achieve Product-Market Fit.

Notes –

01:03 – Two major SaaS buckets for STRIVE – (1) Global SaaS (US, European, & Asian markets) and (2) Local SaaS (India SaaS / Indonesian SaaS and similar others.)

04:48 – How does STRIVE focus on such segregated SaaS markets?

09:28 – Not only monetizing Local SaaS startups through the typical Subscription-Business model (Example – Classplus) but also through transactions

17:34 – What was the thought process at STRIVE while coming up with a Non-subscription model for monetizing their portfolio companies in the Indian market?

20:27 – Indonesia SaaS market in terms of product adoption, willingness-to-pay & market penetration

26:21 – Portfolio of Global SaaS – Healint, HASURA, Saleswhale

29:18 – Investing in HASURA with a vision to simplify backend development

33:10 – Investment Thesis – “Founders & Teams who Do More with Less”

36:10 -Common early-stage mistakes in SaaS startups

40:05 -Crucial changes in GTM strategies for SaaS startups in Pre-COVID vs Post-COVID market

48:22 – Emphasizing on portfolio companies to build user engagement and reach an initial $1 million+ ARR


Read the Full Transcript here:

Siddhartha 0:01
Welcome to the 100x Entrepreneur Podcast. Today we have with us, Nikhil Kapur. Nikhil is partner with STRIVE and Nikhil has also been a founder of a company called TommyJams, which is a profitable company and has over 10,000 artists. Nikhil also writes his views on tech in Asia, and you know, the other things in the ecosystem in the startup in Asia at Welcome to the podcast Nikhil.

Nikhil 0:56
Thanks, Siddhartha. A pleasure to be here.

Siddhartha 0:58
And also thank you so much Nikhil for listening to 100x entrepreneur podcast and sharing about it in your blog.

Nikhil 1:03
Haha. Yeah, I’m an avid listener, so appreciate it.

Siddhartha 1:09
So Nikhil, our today’s discussion will be, you know, around your favorite topics. So tell us about the portfolio companies from India and Asia, you know, which you invested in as the lead partner in Saas.

Nikhil 1:24
Yeah, thanks. I will go into that. So, essentially, Siddhartha within our fund, we focus on two kinds of SaaS investments in these markets. So, firstly we’re in Asia wide VC. So we invest across Japan, Southeast Asia, and India, one of the very few VCs who are sort of doing this from the same team across multiple markets. And that gives us a very good sort of bird’s eye view into all of these markets and sort of helps us understand the technologies moving, right? So based on this, we came up with sort of two buckets of pieces within the Asian markets. And the first one is what we call the global SaaS market, right. And these are your typical SaaS companies that are serving the US market or European market or even Asian market, but sort of starting from, you know, a city in Asia could be Chennai, could be Bangalore, could be Singapore, right. And within this bucket, I’ve led investments in Indian companies such as Hasura, and Testsigma. And even Southeast Asian companies like Saleswhale and Healint and, you know, I’m happy to go into more details about some of these companies. But before we go in there, just mentioning the second bucket, which is as important as the first one, and probably a bit more overlooked by mostly season in this part of the world, and this bucket is what we call local SaaS. So for within the Indian market, this would be sort of the India SaaS, the true local India SaaS opportunity. And similarly, you know, Indonesia SaaS or any other emerging market that we are covering in these regions, right. And within this bucket like within India, we have led seed investments in companies like Classplus, Medtrail, Build Supply, all of these companies that we led the seed round and we were sort of the first or one of the first institutional investors in these companies. And yeah, these are some of the investments that I personally have led in these markets

Siddhartha 3:52
So, Nikhil, before we go dive into, you know, the companies and the market, you know, So you are Nikhil Kapoor, do you enjoy like is there in VC a certain Kapoor clan like Mitch Kapor, Nikhil Kapur which you enjoy like Bollywood Kapur?

Nikhil 4:12
I wish I wish that there was a Kapur fraternity but unfortunately there’s none but yeah if you do know a lot more than maybe we should start like a WhatsApp group or something.

Siddhartha 4:27
I can start up the Punjabi VC WhatsApp group because I am also a Punjabi.

Nikhil 4:31
yeah, that we should definitely do. We can definitely have our own little Whatsapp group.

Siddhartha 4:43
So, Nikhil, on some serious part, right. How do you categorize these various opportunities because there is you know, Japan Saas opportunity? I think you have a very small team. You have an Indonesia SaaS opportunity, and you have India SaaS opportunity. If you can share some details. What’s the typical ACV as in India for let’s say a company like, you know, Classplus compared to Indonesia and Japan on how do you tend to focus because it cannot be like equal focus on each market?

Nikhil 5:12
Yeah, that’s a tough one, right? Like I think most VCs tend to focus on just one market and sort of go deeper into it. And I think that’s been sort of the traditional approach towards VC. I think when we started this fund, the two managing partners that are based in Japan and they started the fund, they always had this vision of being a broader sort of Asia fund. And I think that attracted a similar set of people, including me who join them on this vision, right. And I think we really enjoy being as sort of cross border VC. We like sort of connecting dots from different markets. It definitely comes with its own strengths where we can sort of leverage on knowledge from each market and sort of applying it to another market or leverage our networks across these multiple markets. But it also comes with its weaknesses. Right. And one of them is this exact problem that you mentioned how to focus on so many markets at the same time? Right. I think one thing that we have done is we’ve been disciplined. We’ve sort of focused on a few sectors as you can see, like we are focused on SaaS, and that gives us the opportunity to not get confused or not get straight away and start looking at, you know, the next I don’t know, food delivery company, and so on and so forth. Right, like we tend to focus on just that’s core vertical that we are looking at, right. So, that definitely helps. The second is I think, we tend to be different in our workings internally compared to most VCs. So most VCs, they have this approach of a platform approach, right? Like where there is like a hierarchy, there’s a partner, then there’s, you know, a principal, then senior associate analysts, like there’s a whole pyramid structure. And you know, deals are sort of bubbling up sort of from the bottom to the top, right. And that’s how most VCs operate. And then there is a separate, mostly a team, which is handling marketing, somebody handling tech, somebody handling some part, as part of the platform, right? What we’ve done is we’ve straight off that model. And we’ve created internally, what I call, full-stack VCs. So we go sort of play the role, each one of us all the way from a partner, to an analyst to even like, administration of the fund completely full-stack. One person doing pretty much everything within their core area of focus. So how this helps us is like, you know, I am the one who is usually scouting people on LinkedIn and reaching out to them. And then I am the one who, sort of, doing that first meeting, and I’m the one who is doing the second meaning. And I’m the one who is at the end sort of taking a call on whether we should go ahead with this investment or not. So this helps us sort of minimizing the amount of you know, communication required between multiple stakeholders, right? And this way that said, like, we definitely involve each other in sort of our decision making, but we tend to operate very much full stack with a lot of independence to each person, and each one doing sort of their own diligence, we so scouting everything, it’s a lot of work, I would say for one person, but you know, we are all young in the team so that we have the sort of advantage of having that extra energy during this phase of our life, and happy to answer the other question that you had regarding the ACB side also

Siddhartha 9:10

Nikhil 9:11
Yeah. Okay. So on the ACB side, Siddhartha, so I think, let me first say that, there’s, as I mentioned, the global SaaS bucket, and there’s the local SaaS bucket that we look at, in the local SaaS bucket, actually, we’re not really thinking of monetizing these companies via our typical SaaS subscription model, right. So even though these companies are providing software as a service, they might not necessarily have a pure subscription-only model for their business. Right. So actually, if you look at a company like ClassPlus, right, most people you know, now have started to know about Classplus, you know the company is growing very well, they definitely the category leader, they have more than 5000 coaching institutes. now using their platform across India, it’s, you know, been built in less than two years. Right. So really growing fast. Right. And, and, of course, the COVID tailwinds are helping them right now. But if you look at that company closely, most people think that you know, it’s a SaaS company. They go and send Subscription to coaching institutes, and that’s the business model. And that’s it. But what people miss is actually one of the biggest business models is selling content through their platform. So what they go and do is they provide this SaaS platform to these coaching institutes, they digitize the whole Institute. They bring on the students on the platform, they bring on the teachers on the platform, right, and the teachers actually go and bring the students so there’s zero CAC to bring these students onto the platform. It’s completely is zero CAC model except for getting the teacher onto the platform in the first place, which by the way the teacher pays for. So you know, it gets paid for within the first transaction set. So it’s like, again, zero CAC, in that sense, because you make money from day one. So once the teachers and students are on the platform, then the teachers actually go and upload their content on the platform. And they send the content to their students as well as students who they might not have ever reached in the past before. But now suddenly, with the power of a mobile app, as simple as a mobile app, they can now reach any nook and corner of the country, right? Even international students can go and sort of look at the content, view their content, read the content, and then sort of buy the content. And ClassPlus actually enables these transactions on the platform, and they charge a commission on it. And this commission business model is actually as big as the subscription business model that they already have and is growing probably 10 times faster than the subscription business model. So, at scale, we expect ClassPlus to be making maybe 10 million $20 million on this subscription business model. But what we really expect them to do is to go and make like a billion dollars of transactions happen through their platform, and then maybe a few percentage Commission on this and be to $300 million revenue business, right? This is actually the same this is not a new business model. If you go and look at Shopify, they have applied the exact same model. And you know, they’re so successful right now, they’re more than a hundred million dollars in market cap now, right? And again, you know, COVID tailwinds gave them that sort of push as well in the last few months. So very similar business model. And I think it’s very, very relevant for these emerging markets.

Siddhartha 13:02
So, you have MedTrail and other companies in your portfolio

Yeah, same same, right. So, MedTrail is actually a company which is in the health tech space, and they just like, you know, classplus builds the SaaS for coaching institutes. Medtrail is a doctor-first company, so they build a similar sort of platform for doctors to manage the clinic, but more importantly, to digitize that prescription that the doctor is writing for the patient. And you know, traditionally people have tried to take this sort of market by taking a very SaaS-based approach and saying, you know, what, we are going to give this EMR digitization software to the doctor, and the doctor will pay as some $2,000 $4,000 a year and that’s how we’re going to make money. Now, what Medtrail has done is like they’ve really brought down the cost for this kind of a product, thanks to machine learning, and they go and give this to the doctors and they say you don’t have to pay us a lot of money for this, you know, it’s very cheap, it becomes almost a no brainer for you to adopt this. But because this special prescription gets digitized and comes onto our platform, we’re gonna layer services on top of this, and you as a doctor can actually make money on it while we make money on it. So you focus on providing the best quality of care to your patients. And you ensure that you know, the patient also gets the prescription to fulfill right at your clinic, so they don’t have to go around and look for these medicines in the market, or even bother about going to an online platform and sort of ordering there and waiting for like five days to get the medicine, right. Like, we can bring you the power of the same pricing right there in your clinic. So that’s something that they’ve done. They again have this sort of by bipartite sort of business model, where they make money on Subscription. But the real money that they make is on the transactions that get enabled through the core of this platform.

So they have in house pharmacies at these doctors clinics?

Yes. pharmacies, yeah, powered completely by Medtrail. It’s all automated, completely automated inventory management.

Fantastic. And I think your third company in this in India Build Supply also follows the same in construction market.

Yes, exactly. Very similar model focused on the construction market on the prop-tech market. Basically providing a similar software for people to manage, like sort of like an ERP to manage their whole inventory, as well as construction project on the Build Supply platform. So it’s both being used by contractors as well as Real estate developers and they have big clients like Godrej, Godrej Homes, they have Vatika. They have Embassy, they have Egmarg and even DLF. And these guys are using the platform to sort of manage the construction projects. And similarly, they have the mid-tiers of contractors, who then go and provide the services to pick developers also using a similar platform for themselves to manage the inventory, manage their projects. But then once you start capturing on this data of what exactly is going to be needed, like how much steel is required next month to finish this project, then it becomes very simple to go and enable that transparency in the supply chain and open up you know, very transparent supply chain for the contractors and developers to buy from. And so, this again, the platform helps enable these transactions that, you know, are powered by Build Supply to their own supply chain. So, it’s a SaaS plus transactions model again.

Fantastic. And now I believe because you have been able to figure out as a VC to partner with these companies where you think, you know, the commerce and the transaction market is much, much higher than the SaaS subscription market. You are repeating, I believe across geographies?

Nikhil 17:30
Yeah, exactly. So, we are starting to do this across. Okay, so let’s sort of step back and think, why did we come up with even this sort of a thesis? Like why take such a twisted approach? And I think the answer, probably every VC and most founders already sort of understand, you know, in emerging markets is difficult to get money from pure subscription model from these businesses. Right. And definitely, you know, the Jio movement that has happened in India has enabled like adoption and digitization of these SMEs, you know, it’s high time, you know, it’s beyond time. So yeah, I would say, and all of these SMEs are definitely willing to adopt and interested to adopt software, but they’re still not ready to pay the kind of dollars that the western market would typically pay for this kind of software. Right. And partly that has to do with culture, and just, you know, legacy, right. And partly, it has to do with just how much amount of money that they as business make and what kind of profit margins they live on. And, you know, just the bottom line that they sit on it, there’s no scope as there’s not as much scope to pay for subscription, right. And because of this, it’s just easier to solve this pain either on the revenue side or on the cost side for the SME and make some money on the transactions that they’re anyway doing in the market, in fact, making them even more efficient on those transactions, and then charging them a small fee for it, right? So, you can improve the efficiency or you can increase the revenue by 4 or 5x 10x times, right. And you can take 10% of it, and that’s okay. Like, because for them, it’s much, much better than how things were before. Right. So I think that way the friction becomes weightless. And that is the reason why companies like ClassPlus have scaled so quickly, in two years, you know, they’ve gone from zero to 5000 Institutes without raising like much capital, only now they’ve raised $10 million, but before that, they were working on like, a few million dollars, right. And they managed to scale so quickly because of this. So I think this sort of model, the Shopify model, if you will, works very well for emerging market SMEs, right. But if let’s say we focused on some more mature markets like Singapore, or Japan, right, like overthere both enterprises, as well as SMEs are willing to pay for software. And over there, we might take a pure subscriptions approach towards the market.

Siddhartha 20:22
And how’s Indonesia, a market as compared to India in terms of fast adoption, willing to pay for SaaS?

So, I think that’s a great question Siddhartha. And, you know, something that we’ve asked ourselves a lot of times as well. I would say the adoption is actually a bit similar to India. Like it’s just starting to happen. I think just like India had its own Jio moment like Indonesia has had not a telco like movement, but more tech unicorn led movement, the likes of Gojek and Grab, Tokopedia, Bukalapak sort of opening up the market and educating the market towards tech, right? Like, all of these platforms have hundred million plus sort of users. And the total population of Indonesia is around 260 million. And the addressable population from, you know, tech VC perspective is maybe around 150 Max 180 million, right. So a significant amount of adoption has already happened on the consumer side, which is sort of seeping into the SME side. And now is sort of the best time to build these kinds of SME digitization platforms. Right. So from an adoption perspective, very similar to the way India sits today. But from a willingness to pay perspective, it’s very interesting. I think the willingness to pay is a bit higher than in India, thanks to sort of the higher GDP per capita, that Indonesia sits at. But again there is a slight nuance, you know, Indonesia is mostly Led by micro businesses and 98% of Indonesian businesses are actually micro-businesses, which is less than 10 employees. So it’s even more sort of, let’s say, fragmented than India, right. And in that sense, like, you know, those companies, those sorts of businesses, micro-businesses, the propensity to pay for SaaS is almost zero. And that’s where like, you know, the transaction models work very well. And if you see, you know, the right now there is a wave of companies coming in, which are sort of Udaan of Indonesia or KhataBook of Indonesia and these kinds of companies, right. So it’s very interesting. And that’s what I mentioned at the start of the episode, we sit at a sort of a bird’s eye view of seeing all of this and seeing what is working in India, and what makes sense and what doesn’t make sense and then applying similar sort of thesis to the Indonesian market because from a tech wave perspective, they’re probably one or two years behind India, in terms of sort of the entrepreneurs, and what they’re building from business models.

Fantastic. And as you mentioned, you know, one of your startup portfolio companies, Ayopop is similar to KhataBook in India as well.

Nikhil 23:25
Yeah. Actually, Ayopop is not similar to KhataBook. But I would say it’s a bit similar to BillDesk.

Siddhartha 23:32
Okay. Yeah.

Nikhil 23:33
So it’s a bill aggregator in Indonesia. And they are the category leaders, they’re the largest ones. So, Bill Desk actually, funnily that way when India came, you know, 10 years or so ago. In Indonesia, it only happened, maybe when we invested in Ayopop, which was four years ago. Yeah. And so now we’re starting to see billers getting digitized, thanks to, you know, Ayopop going in and sort of working with these folks and bringing them on.

Siddhartha 24:06
Fantastic. And tell us more about, you know, the global companies, which you mentioned Hasura and TestSigma, which are targeting global markets, like how do you evaluate these companies?

Nikhil 24:19

Siddhartha 24:20
And what are the key early metrics that catch your eye? Right

Global SaaS is actually very close to my heart, Siddhartha. And the reason is like, my personal career has been sort of in Global Saas.


Nikhil 24:34
Almost all my life, right. I started my career building office for mobile, within Microsoft. And, you know, we deployed to over 10 million users at that time, and I learned firsthand, going from zero to like, 10 million users on our platform with a small team of 50 devs, you know, so we really like enjoyed that experience. And that sort of brought me to the forefront of SaaS, like Global SaaS. And then I sort of had built a similar platform out of Singapore, a company called Pie. That was soft of building slack competitors back in the 2015 timeframe. And we were taking a very different approach towards collaboration, we were sort of targeting the nontechnical SMEs in the market. So, you know, Slack seem to be used and probably still is used mostly by the tech community. But, Pie was focusing on sort of the nontech communities, schools, random SMEs like restaurants, etc, were using this platform for their team collaboration. And that was a vision and we started growing and scaling and then ended up getting acquired by Google. And at that time, I actually entered venture capital. So since that day, like, you know, I realized that my personal experience is in tech and product and go to market for SaaS companies. And that’s where I sort of, I’ve used my sort of, you know, learnings from these experiences in looking for the right kind of companies. And our journey in global SaaS actually started with Singapore with a company called Healint, which is a healthcare analytics company and so global in nature from day one. They so like pharmaceutical enterprises, with data analytics, and on the patient side, they have the largest sort of engaged patient base today with an app called Migraine Buddy, which basically tracks and predicts migraines for anyone who’s suffering from a chronic migraine condition. And, you know, I don’t know whether any of the listeners are migraine patients, but, they most likely have used this app, especially if they’re from a developed market because they have more than 2 million users on the platform. So anyway, like our journey started with Healint and then I led an investment into a Y Combinator-backed company called SalesWhale, which is sort of building this conversational intelligence platform for helping qualify Marketing Leads at scale, so and it’s all done via AI. So there’s sort of a board that takes on the hat of what an SDR will do typically in a sales company in a sales team. So, the bot sort of plays the role of an SDR and qualifies the lead and once the lead is qualified, it handed over to the account executive to close. So, that’s an investment. I led and through that journey, I learned about how to build and scale GPM for global SaaS companies. And then we invested in, I personally invested in, in two companies, Hasura and TestSigma, in India, and these are in the dev infra space within the global SaaS sort of bucket. And, again, this is a space which is very, very close to my heart because I come from dev and technical background. And so I’m able to understand some of these platforms may be a bit better than the average VC. Because you know, only when you actually build something, so you realize sort of the nuances of technology and, you know, code bases and stacks and technical stacks and hence, you’re able to see like where a particular solution fits in. So, most of our Indian global SaaS companies have been in the dev interest phase, but very much looking to sort of diversifying across other verticals as well, we have Martech, you know, financial tech, within the global aspects, and so on and so forth. So that’s been sort of our journey.

Siddhartha 29:17
In case of some of these companies, let’s say, Hasura, or TestSigma, what were their metrics at a very early stage that caught your eye?

Nikhil 29:24
Okay, metrics. So, Siddhartha, actually we are seed-stage investors. So yeah, we are sort of as mentioned, we’re the first institutional check into these companies. So when we meet them, forget metrics, sometimes they don’t have a product. So, when I met, actually the Hasura founders, they were building or they were planning to build a backend as a service. And at that time, they were running what we guys call like a Tech Shop. So they were building some apps for some people and on the side, they were building this product. And I really found the team very interesting. And I found what they were starting to build quite interesting. But that said, I didn’t invest in them at that time. So we kept in touch for another five, six months, because I wanted to see how they evolve on this platform. So actually, when they came to me, again, after five, six months, and we discussed, they hadn’t reached any particular metrics in terms of, you know, customers, or revenue, or ABCs, or whatever. All they had was maybe like a few beta users who were just starting to use the platform. But what was more important was a vision, right? Like now they had a vision that, hey, we want to make back end development, easy for, you know, mid to high, sort of experience devs. So that was how their thinking evolved, they’ve learned like along the journey, and that sort of is what I invested in, essentially, a team of Rockstar founders, like amazing founders. And I can, I can just clarify what Rockstar founders mean for us. But basically a very strong team, going after a market that we really like no large market as most VCs like and with a very clearly defined vision, and the vision can be very broad and that’s okay. As long as we understand the founders will be sort of following this path and will be, you know, incentivized to follow this path, regardless of you know, the ups and downs that come in the journey. So, you know, the solution can pivot, the product can change, the go-to-market can change, but at least the vision will stay aligned, and sometimes vision can change also. So, but mostly we want them to have a consistent vision towards what they want to achieve or what they saw in the world, right. And so, let me help like clarify what Rockstar founders mean for us. And we have like a few qualities that we assess these founders but the biggest one is what we call product-led. Right? So I think unless the founders or product-led like we are unlikely to be interested in, and from product-led perspective like it’s very simple like we want them to be solving problems. Thinking about the product first, right, like not thinking ops not thinking manual, but may be initially manual but always thinking how to automate like certain parts of the process that they are running right like be it the product or be it GTM, but how having a very, sort of, user-focused approach and thinking, what is it that the user wants and make, like, you know, 10 users delighted with the product with a small MVP, and then solve a problem, and then iterate from there, right? So product-led, and that iterative approach is one, one big factor. The second factor is frugality. Right? Like, we want founders to be frugal in nature. We want them to do more with less. And, you know, we’ve seen this across our portfolio. Only when you do more with less, are you really building the right kind of company? And that’s when you see massive successes, both for the startups as well as for the VCs, right because the return on equity is the highest only when founders are using the resources in the best, most efficient. So that frugality and frugality doesn’t necessarily mean being cheap. But what it means is like, where should the founders be using the resources, the limited resources. So, that’s the second part. And the third part is like ambition and hustle, right? Like, we want them to be dreaming big. We don’t want them to be thinking about a small, you know, 10 $20 million revenue business where they exit in five years down the line, we want them to be going for the long run, or for the IPO, for the m&a which is going to happen only of a billion dollars, right. So having that sort of billion-dollar ambition and having the hustle to get there, right, like so that hustling nature, and always being super ambitious, and that’s sort of the third criteria. And when we see these kinds of teams, our product-led teams who are frugal in nature and, but with big, big ambitions, like that excites us already and for us, like metrics are irrelevant at that time.

Siddhartha 35:01
Fantastic. I think that’s also a product-led team comes from your DNA, you have been a core techie.

I think it helps. Like, I think coming from that background, I think it’s just, you know, one thing that my managing partner will say to me is like, you know, VC is a job, where you get to choose the kind of people that you want to work with.


Nikhil 35:27
Like, it’s probably one of the very few jobs which allow you to do this, right. Like, every day you decide, like, do I want to work with this person? Right? Like, even sometimes when you make mistakes within your portfolio, let’s say you invest in somebody and you realize, you know, two years down the line like this one, this person was not the right person to invest in, and for whatever reason, you don’t like working with them anymore. You can just stop and move on. Like, it’s so easy, and that’s the I guess the good part of being a VC like you can choose you to want to work with. I personally want to work with the best sort of product and tech people in the market.

Siddhartha 36:10
And within your portfolio, what are the early-stage SaaS mistakes that you have seen your founder making on either on the GTM side on the product side, which you can share?

Nikhil 36:23
Oh, I think mistakes are a lot. Right? Like there’s not a single mistake that I would say everyone makes but let me think, you know, company by company. So, for example, like one of my SaaS companies based out of Singapore, I think they made a mistake of hiring heads and VPs too early. Yeah. And as VCs, we are always pushing these people to build a core team, build sort of middle management because you need to sort of, you know, move away from founder-led sales, etc, etc. Right. But I think one thing I realized is that, you know, there’s a time that you should think these kinds of VPs and Head of sales and Head of tech gets on board. And initially, till that first, maybe even a million dollars, right, like it will all be done by the founders. And if the founders themselves don’t have the skill set to do it, then either they should learn it, or they should bring another founder, co-founder on board, who will be as incentivized as them to sort of make it happen, right? But it cannot be bought. The skill set has to be either learned, or it has to be sort of shaped within the team itself. It’s not easily right. So I think, that’s a big sort of common, I’d say mistake that a lot of founders do, which is you know, without going out and selling themselves in the market, they go and hire a Head of sales and imagine this will work out for them. It doesn’t work like that. Because that’s not how sales works like it always has to be found in net sales, at least initially. And usually till that first million, maybe even half a million ARR, that’s okay. So, that’s a common mistake. I would say the second mistake is that founders don’t think about GTM often enough. And I love this within my portfolio that you know, even I personally used to think more from just a product and problem and product-market fit perspective, but not thinking about as much about how to align that GTM with the product from pretty much day one, right and these need to be sort of hand in hand. Because unless you have the right GTM strategy, it’s also very difficult to find that product market fit, right? To discover product market fit. And a lot of companies, they end up sort of straying all over the place. It takes them two, three years to figure out exactly what is the right GTM strategy for the particular product, right. But I wish like and I recommend, like any founders who are starting up right now or sort of in the early stages of the journey, to start thinking about GTM. And the different sort of approaches, different kinds of strategies that exist in the market, and which one would be a good fit for your kind of company, right? Because there is no one size fits all approach. Every company is different, every problem is different. Every solution is different. So you need to find the right one for yourself, but try and do it earlier and sooner rather than later.

Siddhartha 39:56
So, is there a playbook available on the web where SaaS founders can look out for various GTM strategies?

Nikhil 40.00

Nothing that I’ve come across right now, because I think this also keeps changing, Siddhartha, right? Like, I mean, the GTM pre covid is probably very different from post COVID, right. So I think like it changes every six months, I’d say the market changes like the reason why it changes is because the channel changes, right? Like, and the latest buzzwords change, right, like, at some point, right now let’s say, let me tell you about a specific example. Within Martech, right, like if you, let’s say you were building a Martech solution, you know, probably 12 months ago, you would have talked about lead generation, you know, closing velocity, even things like expansion, inside sales and content-led strategy etc right like sort of the HubSpot methodology. But now it’s all about what they call demand gen. So the buzzword has changed from lead gen to demand gen and why because it’s like, it doesn’t matter whether you have a lead but you need to have a qualified lead you need to look at this real pull whether there is demand otherwise you’ll be wasting your time trying to close a customer that’s not going to fix. Then secondly, the channel change right like channel used to be content, blogs, etc. earlier. Now there’s just so much of noise in backspace. That channel has moved to webinars like webinars and new sort of blogs and podcasts right. So I think the channel change so your whole strategy needs to change. I’d like how much effort you put in into doing webinars, do you do 12 a year. do you do one a year, do you do one big conference where you pull in like a lot of resources, you, you pull in a lot of heavyweights from the industry, you dump a lot of, you know, capital into building that sort of and for that one event, or do you do like small niche events once every two weeks, you know, with a close set of 10-20 users or customers or potential customers. So, you know, again, within the webinar, like there are multiple kinds of strategies that a founder can take, and depends again on the company to company, which is the big thing. So, unfortunately, there is no one resource like but I think, you know, if you follow the right sort of people on Twitter, or just listen to these podcasts, your podcast, or there’s some specific ones, you know, those are best places to sort of be up to date with how people are thinking and then you can sort of devising your own strategy. And that actually, is the moat, you know, most of the people, they think, you know, my product is my moat, data is my more, actually, if and this is something that a16z wrote about also recently that your moat is your GTM, your moat is like the channels that you build, the sort of capabilities that you build on going to market, rather than any data that you’re collecting.

And can you share a few examples from your portfolio, or even just one example from your portfolio, which you loved on GTM?

Yeah, this one is actually very close to my heart. Because as I said, like, you know, I’m a developer by training, and I love some dev tools in general. And so Hasura I think they came up with this GTM somewhere sort of a couple of years into the journey, right, and when we invested in that Like they did not have GTM face, but they came up with this unique open-source led GTM. Right. And within DevTools, I think one thing I’ve realized is that there is a lot of power in this open-source GTM. Right? Again, it comes with its pros and cons. But for a company like Hasura, which was trying to sort of get mid to high tier sort of developers onto the platform, it was very important to get that initial mindshare from the top tier devs right and get sort of KOLs to testify that yes, this is the right platform. This is the right way to build your APIs. I won’t bore people with like what Hasura is because unless you’re a geek, you probably not be very interested. But you can go check them out on But one thing we realized was that they need to get these KOLs to sort of give or lend credibility to the firm. And the best way that they discovered during the journey to do this was by taking an open-source led approach. So open source was sort of in their DNA from day one because they want it to be open source. But what really propelled them to go open source was opening up this new sort of GtM strategy. And it worked beautifully. Right. Like I think the day they went open source, suddenly, there was a buzz on Twitter and people started looking at it. Then a few good like, top tier devs started experimenting with the platform. They liked what they saw, they started tweeting about it, and that sort of had a waterfall effect. And that effect has continued till this date, right and this was started around a year ago. And you know, from zero, they went to 17,000. I think now 18,000 GitHub stars, which is a lot, right, like I think, if I’m not wrong Kubernetes total has some 30,000 GitHub stars. So like that shows you like how, how big and how massive they are in terms of adoption already in just a year. Right. And this was all done, thanks to open source, thanks to a lot of open source devs are picking on the platform and sort of building on top of it, as well as tweeting about it as well as sort of sharing it within their communities. And that sort of GTM have really enjoyed being on the sidelines often and watching it grow. Because this was something that I had never sort of done before. The only experience I had with open source was with a short sort of internship I did back in my college days with Mozilla. And I’d seen sort of how tight that community is. And so you know, bringing that whole open source community approach towards your GTM, I think I really like that sort of strategy. And I’ve realized that the power these days or the right sort of GTM these days is mostly built on the lines of a community. And pretty much every company in the market has to now go and build a very strong community and on sort of the core set of users who become sort of the the voice of the company become bought opinion, opinion givers on the product side, as well as you bring in the virality. It was the GTM by bringing more people into the community. So that sort of open source community-led GTM is something that I really love.

Yeah, that approach, Postman has already been following.

Nikhil 47:50
Yes, fabulous company, by the way, and I’m very, very glad that normally we have that kind of success coming from India, which attracts attention towards the segment brings belief from, you know, external as well as domestic VCs into this segment,

Siddhartha 48:08
How much importance you put on revenue, per se from that point of time you put in your check. So, let’s say what was your goal of getting them onto a 1 million ARR, and then from one to 5 million ARR what are the key things? You know, I know, it’s are different advice for a different companies, but one of the key things you have in focus to get them at least to a 5 million ARR.

Nikhil 48:34
Yeah, so I think Firstly, for us, the biggest priority is engagement, right? Like even more than revenue, we want to make sure that, you know, those early sets of users are highly engaged on the platform, you know, they’re using it daily, monthly, weekly, whatever is the natural use case for the company, right. So that’s the first sort of focus and once these companies start achieving that kind of engagement, that’s when we start thinking about monetization and revenue, etc. Right? And, of course, like, you know, from a seed VC perspective, our target is always to help the company get to a million dollar ARR. Right? Like, that’s sort of the golden sort of milestone, like that big, big sort of line that you need to cross and only once you’ve crossed a million ARR that’s when you really know that you’re on to something, right. And I think the speed at which a company crosses that million-dollar line from zero to one, that also gives us an indication of like, how solid is this business model? How much is the real demand in this kind of market? But that said, like, even if a company is a is relatively slow, in going from zero to one, that’s still okay because fine might not be Massive billion-dollar company we are okay with the $200 M- $300 million outcome, right? Like you just go. As long as you have your financial sort of cost base structured with slightly slower growth, it’s okay. Right. But from our perspective, we’re always eyeing that, and then once we cross the million then of course, the next milestone is 5 million right now. And we’ve definitely helped the company go from one to five. But I think the biggest sort of role that we personally play is more in the zero to one sort of journey. And that’s because I personally have been sort of build that journey before, like twice. And because I’ve done it twice, like, I feel that I’ve seen at least some sort of, you know, pitfalls and some sort of hurdles that leading to jump across like to be able to get there. Right. So I think that’s where I spend most of my time with the companies once they’re beyond a million I think I reduce my time spent with the company. I’m not saying that it goes down to zero, but it definitely goes down to, let’s say, half of what I was properly doing earlier. And then, you know, I make sure that I’m touching base enough and I’m helping these companies enough to go from one to five, and then five, you know, I’m sort of, okay, you know, my time is better spent on the next set of companies which means that, you know, same sort of growth, right, and anyone who has crossed a 5 million ARR I think after that, I think after that we have this set in their trajectory, and they don’t really need us.

Siddhartha 51:37
So, Nikhil, I am just concluding the podcast on your personal side. You have been a techie, a geek from Delhi Technical University, am I right?

Nikhil 51:47
Yes. And back in the days, it was called Delhi College of Engineering.

Siddhartha 51:51
Yeah. And then you work as a dev, as you shared with Microsoft, you built a company TommyJames, you worked in Pie which was acquired by Google. What made you shift to the VC side, right? It’s a very different path for a techie to go into VC and that too not in India and Singapore.

Nikhil 52:15
So, Pie was actually in Singapore. So I was already in Singapore. At that time, what made me switch to VC was lack of options, Siddhartha. When Pie got acquired by Google, you know, I was actually working with them while I was doing business school. And so, when my plan was, you know, that right off the business school and just go and you know, work with them, it was a fabulous team. I love the team. Yeah, we were growing very quickly. And my plan was, you know, this is good, because that’s why I’d come to Singapore to get sort of that a bit broader experience, international experience. And so this was perfect for me, you know, we were going back to the US and EU develop markets, and I was learning a lot right on GTM, product, success, customer success. But then Google acquisition happened. And at that time, I decided, you know, I’ve already been on sort of a large corporate journey. And one of the big reasons I came out from Microsoft was because I realized, like, you know, I’m one of the 50 devs who’s coding office. And, you know, even though that’s great like there are 100,000 more similar people to be in the company, right? And I’m just one of those hundred thousand people. And I realized that you know, if I really want to have a big impact or sort of realizing my personal ambitions, then I have to sort of take a bit riskier path, which is a bit less traveled, so to speak, right? That’s why the Google sort of, you know, the role never really excited me. And, you know, at that time, I decided, you know, it’s time to try something new. But I couldn’t think of a new idea than I can start my own company, or could not think about, you know, another company that I would want to join at that point. And so at that instant, I said, you know, what, like, venture capital is something I’ve always been interested in. Because, you know, I come across a few VCs doing my TommyJams timeframe. And I was always very curious, you know, we will bootstrap profitable company. So, I was very curious, like, Why do VCs do what they do you know, VCs have a certain way of behavior, so to speak like you to smell us from afar. And so I was very curious, like, why do they all have this sort of FOMO in them, right? Like, why do they invest in or take so much risk, etc, etc. So there was a lot of these kinds of questions in my head. So I said, Okay, why not? Why don’t I join for a bit of time before I think about what’s next? And so that was sort of key. The reason that I started venture capital. And funnily enough, like, three months in, I realized, like, this was the best thing ever again, you know, I like being on the side of the table, even more than the other side of the table, as a founder yourself, or as an operator, you’re heads down in one particular problem all day, maybe for weeks. But as a VC, you’re just living, you know, so many different problems at the same time, right. And you are just so much context switching, going from one problem to the other and sort of that engineer in me, was just got super excited by seeing all these problems like in the portfolio and saying, oh, why don’t I go fix that Fire, this fire and that fire. And how do I help grow this company while I’m doing this x thing on the side? And I really like doing multitasking. Actually, some people hate multitasking. I love multi-tasking, I enjoy it. And so I really found my place over here within the first three months and realized that probably never going to switch back to a founder.

Siddhartha 56:28
Fantastic. Thank you so much, Nikhil. It was wonderful to have you on 100xEntrepreneur podcast. And thank you for sharing your journey, your insights.

Nikhil 56:36
Thanks for having me, Siddhartha. Like I’ve always been on the listener side. I think it was my pleasure to be on the speaking side this time. And I hope it’s a help to some founders who are building a global SaaS or local SAS company out of India, or across anywhere in Asia or even Global.


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