My experiences founding a startup

I had been thinking about writing a blog for quite some time but never really got around to starting. This is my first attempt at writing a blog, and I will share my experiences founding a startup. (Failed at it, and learned a lot.)

Beecon Fleet Management taught me a lot of things. From bootstrapping a company to a fairly good revenue, to struggling under the effects of demonitisation, and taking strong decisions. The logistics market was undergoing a disruption.

Genesis

Back in 2016, when I used to work at Citi for their Foreign Exchange Product CitiFXPulse spending 12 to 14 hours a day used to be a very common occurrence. I'd joined as a fresher there and programming fascinated me. In college, I had barely done any programming and I learned basic Java and Javascript at Citi.

It was around this time that a couple of my friends and I discussed about doing something on our own. We started with some ideas around pets, then researched a bunch of others before finalizing on an idea about unifying the fragmented logistics market in India.

The product

We envisioned a product that would let a fleet owner manage their day-to-day operations, finances, customer management etc. We first built an ERP solution to manage fleets, drivers, revenue and more. We realised quickly that our biggest competitor is good ol' Microsoft Excel. The fleet owners were mostly running operations themselves and were not tech savvy. Our tool therefore presented a high barrier to entry for them. Having to hire people well who can use computer to manage the operations became another challenge.

In order to make people move out of Excel and use our app, we had to find a different important value proposition. A big challenge for fleet owners at that time was knowing where their vehicles were, in real-time. So we built integrations with multiple GPS devices and started providing fleet monitoring as a service. This got us the first few customers.

Over time, we introduced further integrations like fuel-theft monitoring, geofencing, live video streaming etc. This propelled our growth significantly, and we started acquiring customers through some strategic partnerships.

Challenges in defining MVP and Product-Market Fit

Adding all these features took us some time. We had bootstrapped the company, and were surviving on whatever we had saved during our two year stint at Citi. It took us a little over a year to have our MVP created and get the first couple of customers. Also, another challenge was that every prospect we were going to had different and very varied set of requirements from what we were planning to build. Given our desperation to get customers, we went ahead and added every feature that the customers asked for.

Cash rotation in logistics and lack of cashflow

There was another challenge that awaited us even after building the feature capabilities. Logistics business in India runs on cash rotation and none of our customers were paying us for the service. Often we were not even getting paid for the GPS devices that we had installed in their trucks. This was making us run into extremely tight cashflow situations.

We fed ourselves tea worth Rs 5 and meals worth Rs 40. All of us were cramped up in an apartment and a couple of our friends, who were sharing the apartment with us were covering us for the rent. I am sure, I can never imagine going back to this level of frugality ever.

Impact of demonitisation

Somehow amidst all these challenges we were continuing with our startup. However, the big blows started coming when some of our biggest customers had started taking a hit due to demonitisation, introduction of GST, e-way bill etc. and their business models had to change. This made them cancel our deals leaving us with unsold inventory of devices and not receiving our payables either.

Our competitors at that time who had funding like locus.sh, Blackbuck, were able to focus on a subset of the problem and continued to survive during these times.

Lack of Investment and advisors

Even amidst all this, we founders wanted to continue with the idea of bootstrapping and didn't go behind investments. We had a couple of discussions with some investors, but that didn't go well either since we weren't generating much revenue at that time.

Our customer aquisition and strategy was fully organic and completely based on our understanding of market and learning from interactions with customers. We didn't focus on getting experienced people in the domain as advisors and this heavily affected our decision making and judgement.

Personal challenges

Somewhere amidst all this, life was also taking hard U-turns on some of us as we had been failing in business and families started asking questions. As usual, Indian parents are always worried about their educated kids not making any salary and doing something that they don't understand. Also, having girl friends meant that they are getting pressure to get married and finally I had to cave in to these pressures and then decide to leave my company.

Decision to leave

It was not an easy decision to make and had a difficult time coping up with this and was almost in depression since I was feeling I have failed, and also felt I was making the other 2 people who trusted in me also fail.

Between the 3 of us founders, we didn't have a partnership agreement in case of one founder leaving. Since, I was feeling sad that I was making my friends also fail, I decided to forego all my equity and left the company. At this point of time, I really had to start making some money to settle my debts and start looking at getting my personal life back on track.

I then went and joined Chargebee, a reasonably successful startup that time about to get into the next phase. (More about that will be written in my next blog)

Eventually, in another few months, the other 2 founders also decided to call it time and the company was aquired with them joining the company that aquired.

Lessons learned

Right co-founders

It is very important to choose the right co-founders. The founders should have complementary skillset. eg. if you are a tech founder, find someone who believes in the idea, but good at sales or so. All techies likely means you will miss out on sales, or clearly defining product market fit, etc. As techies, you will never be fully satisfied with what you build because you always know that you can do better.

Advisors

Get advisors at the right time and ensure that there are people to guide you. Often as young blood wanting to do a lot of things, you may think you know everything or you can learn it all, but that hardly is the case. You need people to guide you. The experience and know how the advisors are able to bring into the table can solve problems that otherwise would take you much longer.

Investment

Get investment at the right time if you are in a cash tight business. There is no glory in bootstrapping and losing all your money. 99% of the cases, if you can't land an investment, you are either not having the right team or product idea, unless you firmly believe you are in the other 1%. Getting an investment is also a validation of your idea to see whether people really find value in your product.

Identify your ICP

Identify a good pricing strategy and figure out when to pull the plug on some deals. Customers at an early stage of your company can be very difficult to satisfy. You are building something new and there is always someone who has more capabilities. But for you to build something, you need to have that clear vision and not deviate much. So choose your ICP (Ideal Customer Profile) and build only for them. Rest of the customers are likely going to cost you time and not much outcome.

Footnote

This blog is purely based on my experiences. There are many founders who made it big bootstrapping, or just by having tech co-founders. I am happy to discuss further if you feel I am wrong and my understanding has been wrong.