159th 1M/1M Roundtable For Entrepreneurs: Return On Investment
Today’s roundtable, as usual, had a wonderful international flavor, with entrepreneurs from all corners of the globe represented. In particular, we had presenters and attendees from Italy, Chile, Brazil, India, Canada, and various parts of the US. I am particularly pleased to see the rise of Latin America in recent roundtables. I am also encouraged to see entrepreneurs from parts of Europe that are in deep recession.
First up, Shiju Radhakrishnan from Cochin, India, pitched iTraveller.com, a destination-specific online portal for managing travel planning and reservations for all travel related needs for a particular journey. For instance, if you traveling to Kerala, you may want to not only book hotels, but houseboats, taxi or private car to travel between various destinations, tour guides, etc. This service does all of those.
The company does $80k a year in sales right now, but operates on a precariously thin margin because of a business model that has a very low gross margin. Today, we discussed how to address both the gross and operating margin issues to make this a viable business long term.
Then, Ron Robinson from New York pitched BeautyStat.com, currently an online beauty site that offers content, advertising, special offers, sale notices, etc. Ron pitched almost three years back, and I had advised him to bootstrap his business, since all his concepts were unvalidated at the time. Today, he has a $200k a year, profitable business, primarily monetized through advertising.
Next, he wants to move to the mobile platform, introduce e-commerce as a monetization model, and take his business to the next level. We discussed the gaps in his investment pitch.
Next, Mario Bucolo from Catania, Italy, pitched PhotoSpotLand, a mobile app for photographers that offers information about good locations to photograph a certain site from. For example, if you are in the Colosseum, Rome, you could find suggestions of good photographic angles from other photographers. You could also find other photographers and go check out the spot together.
It’s an interesting value proposition. The business model isn’t clear right now – Mario presented a Chinese (or Italian?) menu of possibilities, but none of them are validated quite yet. Mario says he already has investors interested. I prefer to validate the basic assumptions of a business before raising money. But that’s my personal choice, and my general advice to entrepreneurs.
Mario, of course, will do precisely what he wishes to.
Last up, Parag Patil from West Orange, New Jersey, pitched KW Energy, a data-based model for energy trading. Parag has a lobbyist beta customer already in the pipeline, who is willing to pay him $1500 a month to use the service. He believes that other segments like Fertilizers, Petrochemicals, Hedge Funds, etc., would be willing to pay those same amounts to subscribe to the service. Makes sense to me.
We had a fairly long Q&A session today, and it was great getting to know so many of the entrepreneurs in the room.
There are two articles that were repeatedly mentioned during the Q&A, in response to audience questions about 1M/1M, both point to the issue of return on investment from the 1M/1M program. Here they are: The Million Dollar Club and Quantifying the 1M/1M Value Equation. Just like we always steer you towards ROI, we ourselves make it a point to also articulate ROI from our value proposition. In out case, we offer $375k of value at $1000 a year.
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, a virtual 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.