Young founders of Aadharapi.com, Vijay Chuttani and Ritesh Kothari explain how they recognized a huge gap in market and their experience overcoming the obstacles of dealing with bureaucrats to build a business around a government initiative.

Key takeaways from the episode

  1. So, first you need to figure out that the problem is big enough and you have the resources to solve it.
  2. From pilot to real stats we have started selling products so rather running behind the funding we started running behind customers.
  3. We started getting traction very well which showed us that Funding is not bigger task than traction.
  4. If you solve the problem and solve it good and you get customers and everyone listens to you.
  5. We made sure that we get paying customers even it’s not profitable at least we have customers that are willing to buy the product, It’s just not a product which came to our mind that how the investors think and because they need some kind of validation at that point.

Some important questions covered in the interview

  • What made them change the focus from large telecoms to smaller companies for their product?(01:44)
  • How did they handle the problem of constantly changing government laws?(03:42)
  • How did they get their first paid pilot customer?(04:51)
  • Why did they choose to focus on customers first?(06:00)
  • How did they approach and pitch the first investor they met?(11:58)

Here’s the full transcipt

Meetul(00:19): Today I’m joined by two co-founders of the company called Aadhaarapi.com.Vijay and Ritesh Welcome to the show. Yeah, I have done few series so far and I think you tackling very hard problems either companies are B2C or B2B I think you guys are dealing with B2 bureaucrats. You know if I can call that type of problem, walk us through the journey I mean how did you guys come about tackling this problem and thinking about starting a company around that?

Vijay(05:55): So, initially we started with an idea that was more focused on telecom. So if you have seen that about Jio thing where you get the sim card with just your fingerprint and Aadhaar number that was the problem where we were trying to solve before even Jio came in. But then we realized that telecom is not the game for us and we found that a lot of companies are there who can use this Aadhaar as onboarding system applications for their businesses. So instead of going to telecom let’s build up the product that can be used for other companies also that where we thought instead of removing their hassle taking license and doing everything we started this company and started with the whole idea was, a being with Jio thought.

Meetul (01:44):So in a sense that in startup because in general, because the ideas have does and doesn’t mean everybody is I guess but trying to figure out how to build a company around that and validating it especially in this whole ecosystem is new, the whole Aadhaar is new and I’m sure infrastructure is new. You’re dealing with bureaucracy. Laws are changing potentially daily if not hourly basis and trying to build the company around that and making sure that yes this is a viable company. How did you guys figure that out from trying to go to the telco route to this whole other Aadhaarapi.com?

Vijay(02:24): I think instead of the idea that one should focus on the problem. How big is the problem? Because the problem is not big you’re solving the small chunk of business. So, first you need to figure out that the problem is big enough and secondly you have the resources to solve it or if you can go to courage to build on those sources and solve the problems than initially also we thought that we can solve that problem by the telecom and that was a mistake on our part because we did not have the resources required to solve that problem.  

Meetul(03:00): But how did you pivot to like if I can call pivot you know this Aadhaar problem.

Ritesh(03:05): So, I mean being team size of 03-60 but you are not able to survive the telecom industry for sure. When you targeting India A segment, telecom needs the big team and big liability that. So from that point we understood that telecom is not cup of our tea, we should focus on small companies which they can’t take the Aadhaar services to capital but they want to solve the problems of customer onboarding, customer compliance, KYC and so and so for and from that point we pivoted our model to telecom to small companies.

Meetul(03:42): So once you guys figured out your MVP or maybe you thought that you know this is great, this is an area we are moving to. How did you guys move into dealing with government and bureaucrats was that a difficult fiefdom, was that a problem?

Ritesh(04:00): Well, to be honest, I mean we didn’t focus on the government we focused on the problem of customer primarily. We have got the motivation that huge market which is where we can sell the product to the customer. But having said that start up a business, the problem going to be there even if its government or its business and we were ready to solve the problem .so, rather than directly going to government we parted with companies how to have government license of the UID.We told that we would like to provide customers to you through our platforms we could have advantage technologies and marketing. Through that, we solve the problem and we don’t interact with government body directly but now we do that.

Meetul(04:51): So once when you could forget out the MVP and you guys figured out Okay there’s a business you know to be had on top of that. What was the next step?did you guys you know wanted to build the right team as the next thing was with the funding the next course of action you guys thought about you know doing it all that it was more of a customer to get a customer pay for it and then we will build the business on top of it.

Ritesh(05:17): So, you won’t believe that the MVP which we have built on, a complete smaller sage beginning, we sold. We had paid so, we have paid pilot customer which we got it, which given the confidence that the product is a huge demand in the market, we can solve the problem and top of that we focused adding more and more customer.From pilot to real stats we have started selling products so rather running behind the funding we started running behind customers and how we can solve the problem of customers. And somehow we got the attraction very well and the moment we got attraction then the funding was not a bigger task.

Meetul(06:00): That’s such an important statement trade because the majority of the startups are many startups are run after funding first and then they will try to go after customers. You guys went after customers first and used customer’s money kind of funding growth and funding just came because of that. You know it just kind of by-product per say because of it. So coming back to customers a lot of startups don’t know even how didn’t find those customers right. Who is going to buy my product? And you know you were telling me some amazing story of a kind of pitching to really large companies and CEOs to whom you try to get meetings within past it was very difficult and now you were getting the invitation from them to come talk to you, can you talk to a little bit about that to our listeners.

Ritesh(06:50): Well I think thou, I mean when we launch MVP, think of going for any startup of product you should look after segmentation what’s your target customers rather than taking to everybody you should target to the customers which are going to buy your product. So, the first moment you should do target segmentation like who is going to buy my product and are they really gone pay me or not. That really important part and we have done that. So, other than running behind everybody, we have packed our customers we have to try to pack how do see this problem and can we solve this problem altogether. So running behind customer from beginning time then from that point we understood that the problem is already there so we are in KYC segment which is the custom onboarding process of KYC which is like ‘know your customers’ so we are running small brand and small company we need KYC from on operator even if they are paying 1000 rupees to me it’s fine for me. He is paying me and buying my product it’s very wonderful for me. It’s a strong validation. We segmented that customer first and then after that, we approach this customer

Meetul: You know that some Telco would have some companies you know can benefit from you know your product. How do you know how did you get got your first customer right? Who wanted to bet on us as a startup right? Because that’s the most difficult part that somebody knowing or at least understanding that you are an emerging company and betting on you guys and placing that bet usually that’s a very hard thing to convince .(07:55)

Ritesh(08:23): Lucky it was not, to be honest, I will tell intentional what happened considering that the company was in the problem and nobody trying to solve the problem rather than looking you my other startup and you’re looking my solution that very interesting thing happening with us startup my solution. So, when we trying to pitch up or they were not looking for our startup they were looking that these guys are solving the problem.

Meetul(08:45):  The problem was so large enough or at least it was a big enough problem nobody was solving it and hence they’re willing to take a chance on anybody who is catering to this market.

Vijay(09:00): So, that was a lucky thing that happened to us, so when one on customer came to us, It was a startup only. So they trusted us we also building something new and you are also building something new and let’s go together to see how it’s gone they loved our product.from then I think a lot of small company started coming up and then we score some big names and once you have big names on your websites, and then people trust you more.So you just need to see one or two good customers if you’re catering them then you can cater ate to us.

Meetul(09:43): So that is another aspect at least you know going from MVP to maybe even getting few customers but when you go to raise around investors have a very different mindset towards because they’re looking at 5-10x returns for their money and so forth. How was it? how was that approach? how did you guys decide to go after that?

Ritesh.(10:01): So, I have done the mistake in funding and I will advise the entrepreneur not to do that mistake.So, I think in India investor look for attractions it’s very genuinely understood very well. In the month of last year, 2016 when I’m interacting for the startup that time we just building MVP not selling the product we were trying for proposal for investment nobody was ready for that everybody was asking about attractions so and so far. We understand that we let run behind the customer and build attractions.And then once you have attraction we will see how funding rounds go up. Every investor was saying the same thing. And you will not believe that in the month of  April and may we have made the business of more than 12 lakh rupees and everybody start to listen to us.So, completely it was 180-degree change, and they started saying that we want to invest in your company, we meet three company who came say that we want to invest in your company, we were thinking to choose which company, Very lucky to have such scenario.

Meetul(11:18): So, you guys again that the attraction trumps everything.

Vijay(11:23): I think if you solve the problem and solve it good and you get customers everyone listen to you. If you are solving the problem and build the product and not getting the customers, investors at least in India will not listen to you. So, make sure that at least you get paying customers even it’s not profit at least you need to have kind of  paying customers so, that they know someone willing to buy your product, It’s just not product which came to your mind that how the investors think and because they need some kind of validation at that point .

Meetul (11:58): So in value just saying that that reference from some everything. And as far as investors are concerned. How was your experience raising around India and even finding these three investors you’re talking about in Mumbai, they get pitched whatever by 100 entrepreneurs on a daily basis? How did you reach out to these people and figured out that these are the right investors for you guys?

Ritesh(12:20): I think while dealing We were not sure who’s gonna cost extra in falls, but there are a couple of platforms there, the online platform is there like F6s among them.And luckily again another side we were operating from Nasscom, So Nasscom startup only investor meeting and 20 investors came for that came for that program, and all the  Pune and Mumbai startup came for that and where roundtable discussion happens there and we got connects there.There we met the CEO of Angel group ‘Sanjay Mehta’ for the idea and interaction has been done.

Vijay(13:17): One thing I would like to add here is the investors only gave us advice if someone is not willing to invest in you “No is no never.” So, keep them updated, keep them updated on the purpose. Maybe that was the time they were willing to but maybe since you have some attraction, since you have good business approval your point they may be interested don’t take that No as No, don’t irritate them but yes keep them updated on your monthly basis.We kept updating Sanjay and then we met him 4 -5 month back and kept updating him and we have got some customer now and have some revenue now and then finally things start for us.

Meetul(14:07): So going from MVP to finding a good customer to raising a round of funding I think the next challenge you know and we’ve heard this from all the entrepreneurs is the ‘Recruiting’. I building the team making sure now have crossed the first Chasm now you’re the second part of it now you’ve got to scale now because now there’s more scrutiny. You took some money and now there is more scrutiny on you to deliver. And so the team becomes very important in that situation. How are you guys solving that?

Vijay(14:41): Okay. So, I think this was one of the biggest problems that we also had because the one mistake that we made was we started hiring too late.So, planned a little bit ahead. That’s what I think planning to build the pipeline that what?When are we going build the what product, when are we going to market with the product, What is the number of resources we will need for it and when should we start hiring for so that by the time we start that product we have resources ready with us. So, that is one thing and startup I think ‘Angellist’ was one of the best platforms, people come with the mindset of joining the startup.Since you are trying another platform may be Nakri or something else you don’t know if even they willing to interest this. So, I think the willingness to join a startup is one thing that matters because you don’t have all work of MNC’s. So, I think it’s a problem also but you need to filter out people in such way thinking that they should have a mindset work in a startup otherwise they will leave.

Meetul(16:00): As a parting thought I always ask my fellow entrepreneurs you know are there anyone resource, any book, any blogs or anything inspirational you guys think other entrepreneurs should read or focus on or learn from.

Ritesh(16:18): So, yeah I have done one-course udacity.com which is by “Steve blank’ how to build a startup It’s one of wonderful course which you can have. pretty easy freely available which gives problems statement the complete idea to the slight canvas model which is very important like when you want to start something up new, we should have canvas, who’s gonna be your resource, what activities you have done so and so and other aspects are there.

Vijay(16:55): So my I think I’ve been watching ‘Tag’ for a long time now. So that has been a big inspiration for me and once into some space, I think if you’re thinking of some ideas I think reading about the engine out of the whole market is one of the best things that you can do because firstly you need to understand everything though. I will not say specific book but yeah find out the articles on entrepreneurship, how to build the business, finding out what are the tricks and tips on building a business or any kind of business campus, follow them.And the best thing is to ‘Stop thinking and start doing.’

Vijay Chhuttani is overlooking the technology at AadhaarAPI.com as the CTO at Quagga Tech Pvt Ltd. With various innovation awards in the previous company and multiple hackathons win, he sure likes to build products that are helpful in solving problems at scale. After building products for Telecom On-boarding for US clients, he decided to help solve the problem of customer on-boarding for Indian organizations. He enjoys traveling, photography, and food blogging whenever he is not working.

About the podcast

Sunny Side Up is a series of 15-minute podcasts which shares concentrated analysis and advice from startup founders, B2B marketers, sales and product leaders. We welcome your ideas for future topics. If you know someone who would like to be on the show, give us a shout.

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