134th 1M/1M Roundtable For Entrepreneurs: The Challenge Of Navigating Long Sales Cycles
During today’s roundtable, we had five presenters discussing a wide range of businesses mostly from India.
First, Chetan Vinchhi from Bangalore, India, pitched Aurviz Technology, a video solution whereby enterprises can provide video-based customer support. The validation for the concept has so far come from the Indian Railways that is interested in installing video-support kiosks at railway stations.
Other segments where Chetan is seeing interest include banking and healthcare. The sales cycles, however, are very long, and the only way to squeeze the cycle would be by building case studies and success stories. In India, long sales cycles with enterprise customers are perpetual problems plaguing entrepreneurs, and the VC community largely shuns businesses with long sales cycles.
Then Musavir Iftekhar from Kuala Lumpur, Malaysia, pitched One Point Solution’s Super Mall KL, which, once we managed to get to the heart of the idea, is an online portal where malls can list their products and either sell online (e-commerce) or simply advertise and attract customers and foot traffic. Musavir came to the session with the assumption that once he pitches at the roundtable, investors will flock to fund him.
Well, entrepreneurs, please do NOT come to the 1M/1M roundtables with this expectation. As I have reminded you many times, over 99% of entrepreneurs who seek funding get rejected. There is a very long bootstrapping path that is needed today before investors are willing to write checks. [Also check out our 1M/1M Cartoon How Long Can You Keep Dreaming?]
Next Santhosh Jose from Bangalore, India, pitched IntenTree, an optimization service for e-commerce companies. Santhosh is trying to figure out how to validate his concept as well as get early customers. My suggestion was to focus on e-commerce vendors with over $1M in revenue and do a set of success-fee-based deals.
If, for instance, Santhosh can deliver 30% lift in revenues, it would be okay to ask for 10% of the extra revenue as a success fee. This way, he can get into a set of accounts, play with real data and develop reference accounts.
Then, Pareen Lathia from Mumbai, India, pitched The Alumni Portal, a private professional network for business schools, engineering schools, etc., to communicate with their alumni on placements, fund raising, etc. Pareen is seeing traction amongst the second and third tier business schools in India, but is also plagued by the long sales cycle challenge. I advised him to do limited duration pilots with schools around specific use cases solving problems and helping achieve objectives. Once the pilot is successful and the agreed upon duration is up, Pareen needs to ask for the check. Lengthy pilots without monetization are to be avoided at all costs.
Last up, Syed Harris from Chennai, India, pitched Zucumi, a social media marketing concept born out of Syed’s other business, MasalaStreet. The latter, which he pitched a few weeks back, is positioned to be the OpenTable for Chennai and, later, India. Zucumi is an off-shoot of the MasalaStreet project, and Syed is coming to the conclusion that it may be more promising than the original project. My input is that he needs to choose to focus on one or the other. Of course, he feels that he has spent seven months working on MasalaStreet and doesn’t want to write that investment off. However, it is quite common in the entrepreneurship universe that a better idea would emerge as people start working on their original ideas. Twitter, for example, emerged out of a failed business called Odeo.
You can listen to the recording of today’s roundtable here.
Sramana Mitra is the founder of the One Million by One Million (1M/1M) initiative, an educational, business development and incubation program that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond. She is a Silicon Valley entrepreneur and strategy consultant, she writes the blog Sramana Mitra On Strategy, and is author of the Entrepreneur Journeys book series and Vision India 2020. From 2008 to 2010, Mitra was a columnist for Forbes. As an entrepreneur CEO, she ran three companies: DAIS, Intarka, and Uuma. Sramana has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology.