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Yesterday, we formally announced that Lightspeed and Sequoia invested in OneAssist, a company that creates and markets assistance and protection-oriented membership plans for consumers. OneAssist was incubated and founded in the Lightspeed offices during 2011 by Gagan Maini and Subrat Pani. We’ve known Gagan for almost five years and frequently traded views on business ideas and opportunities in the payments, loyalty and concierge space. Gagan and Subrat have known each other since the late-90s, when they worked together at the SBI-GE cards joint venture. They have each built new businesses from scratch inside larger companies – Gagan most recently started the Indian operations for CPP and Subrat built the credit cards business at Kotak – and we’re excited to back them in building a new company in this white space.
The thesis behind OneAssist is that consumers increasingly value peace of mind, convenience and assistance with respect to certain events that can disrupt or interrupt our everyday lives (such as the loss of a phone or wallet, health emergencies etc.). This is driven by: (i) increasing time scarcity – especially in double income households, (ii) a cultural preference for ‘assistance’ (witness services such as Naukri’s ‘assisted’ online job postings, where sales reps hand-hold employers through the job posting process, JustDial’s assisted directory service, IRCTC’s agent channel for booking online tickets etc), and (iii) an emerging orientation towards protecting oneself from unforeseen future events (health insurance didn’t meaningfully exist 10 years ago and is a 13,000 Cr industry now). And perhaps more anecdotally, a growing sense of taking responsibility for oneself and one’s family.
We believe there is a large opportunity to create a branded, consumer-oriented assistance and protection platform across multiple segments. The initial use cases OneAssist will support are the loss (or theft) of a wallet (including cards, driving license, PAN card etc) and the loss (or theft) of a mobile phone. In each case, the company takes on the chore of cancelling credit/debit cards (or remotely wiping and locking a phone), protecting against misuse of cards and/or data, providing emergency assistance (such as providing a replacement handset with data fully backed-up), and replacing essential identity documents such as a driving license or PAN card. Each product also offers certain group insurance benefits to protect against financial loss. Plans are priced at Rs 1,000 to 2000 per annum depending on the chosen package plan, which equates to just about Rupees 3-5 a day.
In addition to marketing directly to consumers, the company would also market their products through affinity partners (such as banks, telcos, retail, etc) and corporates who have large customer or employee bases and can offer such products as very relevant value added service or benefits for a fee.
This business model is notoriously difficult to execute against given the importance of delivering against the promise in ‘moments of truth’, the myriad of supply-chain partnerships and capabilities that must be developed and coordinated, the direct and partner-driven sales and marketing capabilities that must be built to achieve scale and the customer engagement strategies that must be deployed to ensure high customer satisfaction and loyalty. We believe that Gagan and Subrat are the best entrepreneurs to take on this challenge and wish them and their team the very best as they embark upon this adventure.
[Published in Pluggd.in]
Several of our portfolio company founders and I have recently been debating whether to launch a new product/company quickly (and sometimes prematurely) or instead take more time to launch with a ‘fully baked’ product. The most compelling reason FOR launching early is to expose the product to real customers and begin the cycle of learning (and sometimes also to establish a first-mover advantage if relevant and important). The principal reasons AGAINST launching early are that you deliver a half-baked or imperfect user experience and worse, you risk failing to meet basic user expectations.
Through discussions with other CEOs it became clear to me that many entrepreneurs struggle with different variations of the same question. For example, while we’ve been debating this trade-off in the context of when we should launch a new company and how ‘perfect’ the product should be, other entrepreneurs whose companies are already in market wonder whether they should begin to scale-up aggressively or first invest in their infrastructure (provided they have validated product-market fit).
Clearly there is no generic answer to this question as many factors play a role – the nature of the business, competitive dynamics, user expectations, regulatory requirements etc. For example, Indian Energy Exchange (IEX), a Lightspeed portfolio company, operates a national, electronic market for power. The company’s platform is used by state utilities and industrial buyers to buy and sell power as well as ensure payment integrity and schedule power delivery. Given the company’s mission critical role in the power market, it is essential to launch with a pressure-tested product that works flawlessly at scale. However for many consumer internet or mobile companies that do not serve such mission critical use-cases, there is a strong argument to launch early with a minimum viable product and begin the learning cycle as soon as possible. The key question we’ve been debating is how early?
My current thinking is that entrepreneurs must focus on getting to market quickly with a lean or light-weight version of the product (note that this is different from an incomplete or half-baked product), PROVIDED that:
- The product supports the core customer use case,
- The company has a level of technical and organizational readiness that will enable them to iterate, innovate and improve the product post-launch rather than engage in months of fire-fighting because the product or service was launched prematurely and fails to meet basic customer expectations, and
- The company is ready to track user behavior, engagement, funnel metrics, cohorts etc so that iteration and improvement can be done in a data-driven manner – and the insight gained from an early launch can be actioned
Note that this does not require the product to be perfect or ‘complete’ but it does require that the limited set of features and functionality work well and support the core use case. For example, an online retail company need not have full product selection, support every payment method or offer a full feature-set on day 1, but it should offer a frictionless user experience and be able to accurately ship an order to a customer within a reasonable time frame. If the company has made appropriate investments in its organizational and technical infrastructure, it will be able to layer on additional products, functionality etc on a continuous basis post-launch and will be in a position to accelerate growth going forward. Flipkart is a great example of a company that did this the right way – by focusing on getting the user experience right and establishing product-market fit before aggressively investing in marketing to scale rapidly.
Conversely, a company that launches prematurely, simply to get to market quickly, runs the risk of demonstrating early success, only to have to pull back later in order to fix a long list of ‘bugs’. This can lead to unsatisfied customers, demotivated employees and a compromised competitive position. Worse, this type of company wont be in a position to run experiments, learn from its customers and make rapid product improvements.
Companies with purely ‘virtual’ business models such as social gaming or music streaming can launch even more quickly with very lightweight minimum viable products to help establish product-market fit. Once they see positive signs around traction, usage and engagement, they must prepare to handle scale prior to ramping usage. After all, what would have happened to a company like Instagram if the system buckled under the tremendous growth?