Finlatics notes

Module 1

Breaking down a business idea

A Business Model Canvas is an excellent tool for understanding a
potential business model. It is also helpful in understanding an
existing business model. It is divided into nine aspects:

 The First Aspect that one should look at in a proposed or

existing business is the Customer Segments. You can restrict
yourself to the top three segments that generate the highest
revenue here.
 The Second Aspect that one should look at is the value
proposition that she is considering. This would form the list of
products and services made available to the customers.
 The Third aspectto look at is the Revenue Streams, which can
be restricted to the business's top three revenue sources. If
 you’re looking to give a service for free, that can also be listed
here.
 The Fourth aspect to consider is the business's channels. This
describes the channel through which the company
communicates with its customers. This will be your business
revenue catalyst because the proper communication channel
can often lead to an alpha multiplier in your revenue. You
should consider it carefully because it can be a competitive
advantage for your company.
 The Fifth aspect to consider is customer relationships. This
includes relationships with key stakeholders on the customer
side and how the company intends to maintain these
relationships. This includes maintaining customer
relationships and the channels that lead to customers.
 The Sixth aspect is the key activities that form the day-to-day
activity of the business.
 The seventh aspectlooks at the key resources that give the list
and type of people, knowledge, means, and money needed to
run the business.
 The Eighth aspect focuses on Key Partners, without whom the
business cannot function. This includes partners on the
product side of your company for both building your solution
and delivering it to customers regularly.
 The Ninth aspect is the cost structure, which looks at the
activities and resources that would generate costs in your
business.
We can take an example of a potential cab aggregator:
The first aspect looks at the kind of clients who would make use of
a cab aggregation service. This would include people who don`t
know how to drive, people who don't have a car, and people who
would need taxis at their door 24 hours a day, seven days a week.
Other groups include those willing to pay a little bit more than your
typical taxi for both comfort and convenience—convenience in the
form of paying a little bit more for taxis during peak hours and
comfort in the form of getting a guaranteed ride through your
phone. For a company like Uber, additional customer segmentation
methods include:
1. Geographical segmentation would look at the company’s divide
between rural and urban audiences and the usage pattern of
customers in their home city vis a vis when they’re travelling
2. Customer status segmentation – which would be on whether the
customer is a daily user, a weekly user or a monthly user of its
service.
3. Demographic segmentation based on the customer's age range,
occupation and life events. It could also include insights like when
the customer frequently uses the service – do they perennially use
it or they use it till a significant life event.
The Second aspect is The business's Value Propositions. For a
potential cab-hailing service, the primary benefits drivers would
provide to their customers would be convenient and affordable
rides, shorter wait times for rides, the convenience of waiting at
home for a ride rather than going out and finding a taxi, the ease of
mobility in an unfamiliar city, cashless rides, the option to ride in a
hatchback, sedan, SUV, or MUV, the safety of a tracker while
travelling, and knowing the rating of the driver and car number
before getting in the car.
The third aspect is the revenue streams. The commission that an
app-based cab aggregator or Uber might earn on each ride would
be the source of revenue.
The fourth aspect is the channels of communication that an app-
based cab aggregator would use with its customers. This would
include social media marketing, email marketing, and partnerships
with corporations and travel agencies. Other channels include
event-based tie-ups, such as those with sporting events or concerts,
where the service has a designated pick-up location and cabs are
more readily available during the event.
The fifth aspect is the company's approach to maintaining
relationships with customers. From the point of view of a potential
cab aggregator for Uber, this would include how the company
works to ensure the safety of its customers, customer complaints
and the time it takes to resolve them, how accurate and seamless
the cab ride booking process is, and plans to reduce customer wait
times.
The sixth aspect discusses Uber or a potential cab aggregator. This
encompasses the day-to-day actions the company would take to
guarantee that it can provide value to its clients. On the product
side, this includes, among other things, constantly striving to
onboard more drivers to improve and enhance its supply side base.
On the marketing side, this means expanding activities to more
places and expanding coverage to more and more cities, channels
through which the company communicates with its customers, the
upkeep of areas of public infrastructure, such as the upkeep of pick-
up points at airports and railway stations.
The seventh aspect of an Uber's or a proposed cab aggregator's
key resources is its digital assets, which include its website, mobile
applications, and matching algorithm, which connects drivers and
customers based on the customer's desired destination and the
driver's preferred operational area. Because Uber is already in
operation, its customer data is an essential component of its
resources
The eighth aspect is that key partners are essential to providing
value to customers. The drivers are one of the most important
aspects contributing to delivering value to customers for an Uber or
potential cab aggregator. As a result, the platform needs to provide
customers with competitive prices while generating value for the
drivers and making money for them. In addition, the platform must
be secure for drivers and safeguard them from customers who
cause annoyance. If we look at Uber`s business model, we can see
that one of its most important features is surge pricing, which helps
drivers earn more during times of high demand. Platforms must
also ensure that drivers receive their payments on time. Any
potential cab aggregator`s source of business capital could be an
additional important partner. Another important partner might be
commercial taxi companies, which already have a fleet and work
with aggregation platforms to help them keep using it. This has
also been the case for companies like Uber in many emerging
markets, where Uber teams up with commercial taxi companies
with multiple cars and drivers to help them meet demand.
The ninth aspect is cost. Costs include the cost of servers, data
centres, payment gateways, maintaining a product team, and
marketing. In addition to product and marketing, roles are included
in the cost structure.

Estimating the market size

Total Addressable Market
 The total addressable market, or TAM, is the total market
demand for a good or service. It is the most money your
business could make from selling its products or services in
one market. Include every person or company that needs your
product or service and could be a potential customer to
determine the total addressable market. Next, establish an
average revenue per customer that you believe you could
generate from your potential product or service. You can get
this impression by looking at the pricing patterns that are
being followed in the market for similar goods and services.

The total addressable market is obtained by :

Serviceable Addressable Market

 Objectively estimating the serviceable addressable market is
the best method for defining your target. This would require
 dividing your target market into segments or the one you
believe you could serve and then multiplying those segments
by the average revenue you believe you could generate from
your potential product or service in that segment. Again, one
can get a sense of this revenue by looking at how much
customers in that market typically spend on similar goods and
services.

Serviceable Obtainable Market

 Serviceable Obtainable Market, or SOM, is the subsequent
metric after SAM. SOM can only be calculated by a start-up
that has already launched commercially and has been
operating for a year. The start-up's market share from the
previous year must be multiplied by the current year's SAM to
calculate SOM. Divide the revenue from the previous year by
the SAM from the previous year to determine the previous
year's market share. The market expands by a certain
percentage each year in normal economic conditions. The
SOM looks at how much money a company could make if it
had the same market share and average revenue per
customer as everyone else only because the market expands
by a certain percentage.
To illustrate this, let’s take an example of a start-up in Cyber
Security Industry. Firstly, Let’s look at the total number of
businesses around the world that could be potential customers of
cyber security services. Let’s take an assumption that, in total, there
are 50 million or 5 crore businesses that are willing to pay for
cybersecurity services.
We now have the total number of potential customers, which we
can use to calculate TAM. The cybersecurity market's average
spending per customer must be determined next. It is anticipated to
be around 10,000 annually, and we believe any new company could
obtain this revenue from its clientele. As a result, we get the TAM
for Rs. 50,000 crores for the global market for cyber security.

Next, we narrow in on the specific market audience. Regarding

cyber security, we can now assume that the start-up focuses and
specializes more in the BFSI market. None of the five crore
businesses would be operating in the BFSI sector, is a well-known
fact. Let's say 2 million of the 5 million businesses are in the BFSI
sector. Additionally, because the industry operates in a format that
requires long-term contracts, lengthy negotiations are required
before signing one. As a result, the segment's average revenue per
customer is Rs. 9,000 instead of Rs. 10,000. Consequently, the SAM
is Rs. 18.000 crores.

Let's move on to the SOM calculation lastly. To begin, we must

determine the sales that occurred in the previous year. Let's say the
startup had sales of approximately 8 crores, or approximately 80
million dollars, in the previous year. The Market Share Percentage
needs to be calculated next. This pound must be divided by the
previous year's SAM, which we derived to the tune of 18,000 cr.

To get SOM, the next step is multiplying this Market Share

percentage by the SAM of the year. The SAM for the current year is
20,000 cr., which is based on the presumption that the growth rate
is 11.11 per cent. As a result, this translates into the company's
revenue target for the upcoming year, maintaining its constant
market share and average revenue per customer.

Market mapping
Market mapping is the process of using a graph to plot competitors
and their products to understand competitor behaviour and spot a
gap in the market. It also allows you, as a start-up to see who your
competition will be and what other products and services are
available in various market segments. This study helps you
understand how the problem that you’re looking to solve is currently
being solved in the market by your potential customer, which can
help you identify potential gaps in the current solution as well as in
the market, which will help you in launching a product or service
that is more likely to be a success.
You can spot market gaps or weak spots that present an
opportunity by looking at the various businesses on the competitive
map.
The definition of the market is the first step in every market
map. Establish boundaries for competitors, potential customers,
and the location. This entails determining who the relevant
competitors and audiences are in the regions you sell to or wish to
sell to. Companies that address your customers' exact needs or
solve the same problem as your product should be considered
competitors.
The next step in creating a market map is to determine the distinct
advantage that each competitor provides. You can determine the
perceived value of particular goods and services by comprehending
the features that represent their unique selling point (USP). Market
mapping's final step is tracking the data and regularly creating
market maps. By comparing them over time, you can see how the
market changes, spot emerging trends and anticipate how
competitors will move. Make use of them to determine which
strategies and data require additional investigation.
Even while operating in the market and after launching your start–
up, market mapping as a concept is beneficial for positioning
yourself in the competitive arena.
The effectiveness and price graph would help you in determining
the relation between the two variables – which you can again see
from the graph that largely products that are highly effective, have a
higher price and vice versa. And finally, the effectiveness and
market share graph tells you that products that are highly effective
have a lower market share and vice versa.

Highly effective products are higher priced – they are bound to have
a lower market share. Finally, combining all your knowledge, you
can come up with a market map – where you have market share
and high price on Y axis and effectiveness on the X axis. You
position the companies that are operating in the market on this
map; that helps you understand the gaps in the market and the
optimal product – market mix that could help you in gaining market
share, which could lead to SOM. It would also make you interested
in certain competitors whose products and marketing strategies
you’d want to study more in detail.
The last step of market mapping is to take it one step further and
keep tracking the data and creating periodic market
maps. Comparing them over time helps you visualise shifts in the
market, identify emerging trends, and anticipate competitors’
moves. Use them to pinpoint who’s strategies and data you need to
investigate further.
Let's take a look at the restaurant market on the following market
map to get a better understanding of this. Based on the tastes and
preferences of customers, we have divided the market into two Key
Indicators. Weave divided the market on the X axis into healthy and
less healthy food. We have divided the market into consumer
preferences according to cuisine on the Y axis.
The market map shows that each player is listed based on how
healthy their food's health and whether it is Indian or international
cuisine. For instance, Ruby Tuesday is regarded as more global in
terms of cuisine, while McDonald's is considered unhealthier.

Using such a market map, you can identify market gaps and
evaluate product development or positioning accordingly.
Traditional healthy food is an apparent omission from this market
map. However, when examining gaps, we must also determine
whether they exist in a high-demand or low-demand segment. As
we examine a potential product, the subsequent modules will assist
us in comprehending this. Additionally, it is optional for such an
empty space to exist in all markets; in general, any new business
attempts to capitalise on market gaps. The open spaces in the
combination of Healthy and International Food can also be
beneficial to launch a product if it is built well and positioned
appropriately.

Module 2
Customer Discovery: Hypothesis Testing
Hypothesis testing:
Hypothesis testing essentially starts the customer discovery
journey, which combines the market with your product or potential
product to either accept that there is going to be market demand
for your product or reject that there would be any market demand
for your product.

Testability:

Your hypothesis is testable if evidence (and experience) shows it to

be true (tested) or false (invalid). It would take a lot of work to
design and execute an experiment for the left hypothesis. To create
a good experiment, we need to clarify some terms. This makes it
easy to explain what exactly to expect. Clarity about what exactly to
expect makes hypotheses testable.
Precision:

A personal finance application that makes money management

easier has a greater degree of success working with the second
hypothesis than the first one, as it has precisely defined an
assumption that it is looking to work on with regard to its target
market.

Discrete:

The hypotheses on the left are two different hypotheses combined

with other hypotheses that are unlikely to be tested together.
Instead, these should be split into her two hypotheses. The first
hypothesis on the right concerns channel testing. This can be made
more precise and verifiable by specifying how much you want your
conversion rate to be and from which market. It is important to note
the first two factors of hypothesis testing. Testable and accurate
hypotheses can be formulated even before the company is
founded. However, this hypothesis is a post-start-up hypothesis. It
is therefore important to note that hypothesis testing is not only
useful during the idea generation stage, but also important in the
larger product decision-making process.

How to Frame a Hypothesis:

Step 1 : Understanding your need
Different types of hypotheses reflect different stages in the
customer discovery journey. Breaking down the customer discovery
journey into specific hypotheses makes the results clearer and
more insightful. Here are the four most common hypotheses we
see in the customer discovery journey:
 Problem Hypothesis: A hypothesis that addresses the
problem you want to solve. Is it an actual problem people are
having? What is the extent of the problem? why does it
matter?
 Solution Hypothesis: A hypothesis that addresses the
proposed solution to a problem you’ve identified. Does your
solution actually solve the problem in the customer’s eyes?
 Price Hypothesis: A hypothesis that addresses the feasibility
of your solution? Can it generate revenue? Are customers
willing to purchase at your price to alleviate their pain?
 Go-to-Market Hypothesis: A hypothesis that addresses how
you will get your solution in the hands of the customer. Is your
MVP (minimum viable product) able to be distributed? How
will potential customers find your product? How will they
purchase your product?

Step 2: Define Your Assumptions

When detailing your hypothesis, you will be forced to make some
assumptions about your idea. The assumptions are:
 The problem you addressed is a problem.
 The solution you propose will solve the problem.
 The market you plan to target will be willing to pay for your
solution.

Step 3: Designing a Sampling

To perform hypothesis testing, you need to collect a sample of data
to be analysed. Segmentation is important if you want to increase
the effectiveness of your marketing. Market segmentation has
become an important part of a strong marketing strategy and can
make a big difference for companies in a competitive market
environment. Therefore, when determining the sample for
hypothesis testing, it is important to segment the market and run
the test on a sample that includes people from all target segments.

1. Demographic segmentation: The Who

Demographic segmentation might be the first thing people think of
when they hear ‘market segmentation’. This is perhaps the most
straightforward way of defining customer groups, but it remains
powerful. Demographic segmentation looks at identifiable non-
character traits such as:
For example, demographic segmentation might target potential
customers based on their income, so your marketing budget isn’t
wasted directing your messaging at people who likely can’t afford
your product.
2. Psychographic segmentation: The Why
Psychographic segmentation is focused on your customers’
personalities and interests. Here we might look at customers and
define them by their:

Compared to demographic segmentation, this can be a harder set

to identify. Good research is vital and, when done well,
psychographic segmentation can allow for incredibly effective
marketing that consumers will feel speaks to them on a much more
personal level.
3. Geographic segmentation: The here
By comparison, geographic segmentation is often one of the
easiest to identify, grouping customers with regards to their
physical location. This can be defined in any number of ways:

For example, it’s possible to group customers within a set radius of

a certain location – an excellent option for marketers of live events
looking to reach local audiences. Being aware of your customers’
location allows for all sorts of considerations when advertising to
consumers.
4. Behavioural segmentation: The how
Behavioural segmentation is possibly the most useful for
segmenting customers. Some methods of behavioural
segmentation include segmenting consumers or potential
consumers through the following routes:
Let us work with a hypothesis testing example to understand this
more in detail. Imagine the you’re looking to launch a financial
technology-based credit service that looks at point of sale based
micro lending. Your product idea is basically to launch a service
that’s linked to a mobile payment application like Google Pay or
Phone Pe or Paytm in India, where a consumer, who has a good
credit score can immediately access credit at the time of
transaction. The larger idea is that once a user signs up or is an
active user on any of these payment platforms, they can have an
opt in for your service. Once they opt in, you use their mobile
number to fetch their Tax Identification Number – which in India is
popularly known as the PAN number to access their credit score
and incase the score is above an eligibility level, they immediately
get access to an unsecured loan; which they can utilise to make
payments through the application itself.
The USP that you’re looking to build on is that the whole process
happens within, 2 – 3 minutes and hence, users can access this
credit line at the time of transaction itself. Also, this credit line can
be used to make any sort of payments via the app – regardless of
whether it is a bank transfer or a purchase. The product is looking
to target good credit pockets in India and “believes that digital
savvy, salaried consumers in the age category of 24 – 45, with a
credit score of 800+, living in districts where the median credit
score is above 700, with a UPI Payment frequency of more than 5 a
day would be interested in such a service to make transactional
payments, especially in the 2nd half of the month.”
If we observe closely, we’ve already defined our hypothesis here.
Here, we’re saying that, “We believe that that a healthy 40% of
digitally savvy, salaried Indian consumers in the age category of 24
– 45, with a credit score of 800+, living in districts where the
median credit score is above 700, with a UPI Payment frequency of
more than 5 a day would be interested in such a credit service to
make payments, especially in the 2nd half of the month.”
This hypothesis is testable and precise as its defining success and
failure with the degree of interest being the testable variable. It has
a problem and solution mix as its looking at the problem of liquidity,
especially in the 2nd half of the month and is proposing a solution
of a credit line that is approved within 2 minutes to make all sort of
transactions.
It has defined its assumptions that the problem of liquidity exists,
especially in the 2nd half of the month; and that a fast, digital
solution would be effective in solving this problem.
The target market for this hypothesis has also been assumed as
well as segmented. It is demographically segments as it is looking
at individuals in the age category of 24 – 45 & those who’re salaried
professionals and not self-employed. Psychographic segmentation
has been done as the product is looking to target individuals, who’re
repaying their loans regularly & have a clean intent towards
borrowing money. As psychographic segmentation is difficult, it has
been attached to an objective variable of an individual credit score
of 800+. Geographic segmentation is also done on the hypothesis
in two stages. In the first stage, it is looking at India as a country
and in the 2nd stage, it is mixing psychographic and geographic
segmentation, where it is looking at districts with a median credit
score above 700, lastly it is also engaging in behavioural
segmentation as its looking at users with a UPI payment frequency
of more than 5 per day.
Hence the particular hypothesis can be tested to understand the
demand for such a product.
As we’ve defined our target market, the next step is the method with
which you might want to collect responses. It can be through
surveys, observational studies, or experiments.
A survey involves asking a series of questions to a sample and
recording self-reported responses. Observational studies involve
observing a sample and collecting data as it occurs naturally,
without intervention. Finally, an experiment involves dividing a
sample into multiple groups, one of which acts as the control
group. The control group is where the response variable that is
being studied is kept constant. For each non-control group, the
response variable that is being studied is constantly changed and
manipulated to determine how the data collected differs from that
of the control group.
For the hypothesis that we mentioned earlier, we can use surveys. If
we’re going the survey route, we first draft the questions that we
want to keep on our questionnaire. These questions should
inherently revolve around things like:
1.The respondent’s age
2.Whether the respondent is salaried or self employed
3.The respondent’s mobile / PAN number to get access to their
current credit score
4.Their frequency of mobile payments and digital transactions to
determine whether they fall under the target market
5.Their choice of application when they transact via mobile, whether
it is Google Pay or Phone Pe or Paytm or anything else as this helps
us understand, which application would be having users of our
proposed solution within this target market.
6.Whether they face a liquidity crisis in a month
7 How are they currently solving this liquidity crisis?
8.How satisfied are they with the current solution? And if they are
not satisfied, what problems are they facing with the current
solution?
9.Whether they would be interested in our proposed product
solution. We can also share a few of our proposed features like the
speed at which credit will get delivered, its link up with the
payments app, its multipurpose usage in terms of the type of
transaction and the potential rate of interest that we’re looking to
charge.
Through, this questionnaire; we’ve essentially looked at all aspects
of our hypothesis, the only aspect missing is determining whether
the respondent is living in a district with a median credit score
above 700 or no. We have not included this in the questionnaire as
its better if we filter for this earlier only & send the questionnaire to
only those individuals, who’re staying in such areas.
Also, whenever you’re looking to use personal questionnaires as a
way to test your hypothesis, you should have an aim of the number
of relevant responses that you’re looking to generate. Suppose, your
relevant response is 200. Therefore, you must get 200 responses
from your segmented target market to gain insights from your
potential users. To get 200 relevant responses, its possible that you
might have to generate 500 or even 1000 responses. The number of
responses that you’ve to generate to get to your relevant responses
acts as a subjective barometer of how difficult or easy it would be
to get to your target consumer.

Customer Validation: Alpha and Beta Testing

Alpha Testing
Alpha testing was a form of internal acceptance testing performed
primarily by internal teams to understand the effectiveness and
usability of the product under construction. However, when it
comes to alpha testing, we encourage you to broaden your horizons
and include friends and family as part of it. Because it helps Most
startups have a fairly small team size and variety, so the team that
built and developed the product is often the one doing the testing
as well. Therefore, the potential for bias against the product is high.
At the heart of all testing is understanding and knowing the
different ways consumers can learn and experience your product.
When it comes to alpha testing exclusively by an in-house team,
they've already thought about how consumers will experience the
product and factored that into the product design itself as much as
possible. Alpha testing with friends and family includes at least
Level 1 analysis of how outsiders perceive, use and experience the
product.

Some important notes that you can keep in mind while conducting
an alpha test include the following:
The first one is that you should look at friends & family as potential
consumers of the product. Hence, similar to hypothesis testing, you
should only reach out to those you feel would be a part of your
target segment for your product or service. Getting feedback from
others would be irrelevant. In case your product has multiple target
segments – on a practical note, you should get in at least 10 – 15
people from each of the target segments to test the first version of
your product. As friends & family form the most approachable part
of your consumer base, getting their feedback would be the easiest
external feedback you can get. Another good tactic at this stage is
to involve a domain-level expert to get feedback on your product.
The reason for suggesting involving a domain-level expert in this
stage and not in the hypothesis stage is again psychological.
There are three major issues when it comes to alpha testing
  Human beings inherently work on incentives. Frankly, there is
no incentive for your friends, family or experts to consistently
engage with your product as you keep developing & improving
it.
 They form a part of your known circle even if they fall in your
target segment of consumers; their feedback is bound to be
biased – based on their relation with you.
 The sample size is bound to be small, so your product has not
yet obtained proper feedback.

Beta testing:
Beta testing helps solve these problems. Beta testing is the first
real test of a product with the outside world and potential
consumers who are not part of your social circle but belong to your
target market. Incorporating feedback from the alpha phase into the
product will prepare it for beta. Beta testing is much more extensive
than alpha testing. So if you get 15 people to test the alpha version
of your product, you'll probably consider 100-110 people for the
beta stage. This ensures a large enough sample to run the beta and
adds significant value. Beta testers are not part of your social circle
and must be found by searching externally. A good place to look is
where you performed the hypothesis test. Respondents can be
contacted and persuaded to participate in the beta phase. If you go
out and visit a location physically or digitally to conduct a
hypothesis test; you can go back there and reach out to potential
consumers to participate in the beta. It's painstaking work, but a
good beta guarantees a good minimum viable product that you can
boot.
The most important part of beta testing is interaction and
engagement. Let us look at the example of an FMCG product to
understand this in more detail. Suppose you come up with a
mosquito catcher which is eco-friendly, fumeless and electronically
enabled. It is innovatively designed and removes fumes through a
liquid that does not disturb humans but attracts mosquitoes, which
then catches and traps them. Once a mosquito is trapped, it is killed
in the device itself. Hence, periodically, the device needs to be
cleaned.
You have scanned the market, and you know that consumers have
seen such bulky light-based installations at restaurants, and they
would have also seen such Chinese home products that work on
light and are hence, only effective in the dark. You also know that
many consumers do not like fumes emitted by traditional mosquito-
killing devices or sprays. You’re also aware of mosquito racquets
that are unsafe and require human effort to kill the mosquito. Your
solution solves all these problems.
To test your solution, you give your mosquito catcher to
homemakers, as they are the key decision-makers regarding the
buying process in this category.
Once you’ve given out your samples for beta testing, it is important
for you to interact with the homemakers on a regular basis to
understand their usage patterns. From a product perspective, some
important things that you need to map are:
Whether they’re using the appliance on a daily basis, and if they are
not, what are the reasons for their non-usage? Is it design oriented,
is it electricity consumption-oriented, is its effectiveness oriented or
is it any other reason? Essentially, mapping frequency usage would
help you determine how easy is for your product to change a habit
of your consumer – the change being from using a traditional
method to a new and innovative method to solve the same problem.
You’ve to map how others in the household react to your product
and whether it has been able to capture the attention of others as
well.
In case multiple homemakers complain about the same issue,
which has led to a drop in usage, you would have to intervene in
your beta, pause it, upgrade the product and resume the beta with a
fresher version and then again start mapping their usage.
In this case, you’ve to also map the effect of your liquid fumes on
people with a lung disorder so you’ve to engage and interact with
those households having such people more – to understand their
sensitivity to your product.
You’ve to essentially map their experience with the mosquito
catcher over a one to two-month period and upgrade your product
based on their feedback. As you would have multiple beta testers,
the idea is to make your product launchable by incorporating the
common feedback you’ve got at this stage. Apart from getting
feedback on how to improve your existing offering, sometimes you
might also get insights to include small additional features that
consumers would love to have in your product. This would help you
in making your product more attractive and marketable.
From a marketing perspective, some insights that you can get on
the mosquito catcher in the beta stage include:
The number of units that would be required per household,
depending on the size of the household
The existing decision-making process in the household when it
comes to a product like this – who’s the initiator, who’s the
influencer, who’s the decision maker, and who’s the purchaser.
Insights on how households typically purchase such a product – do
they buy it online or through any channel of offline retail?
Ways in which you can get a repeat purchase on the product. For
example, would they prefer a low priced one time usage product –
or would they like a high priced one time machine, where they’ve to
purchase the liquid on a regular basis?
The more you think, the more things you want to map at the beta
stage. The more the number of things you map – the more sellable
you’d be able to make your final product. The best part about this
stage – is that here, you’re closest to your actual consumption.
Once you’ve commercialised, on a personal level – you’re never
going to be talking to so many consumers on a daily basis. Hence, it
is important to use this period effectively to learn more and more
about your consumer.
The alpha and beta stages reveal your product to the consumer,
help you get insights and feedback, which you can incorporate into
your product to enhance and make it more attractive and sellable.
As we’re essentially striving for customer validation in this stage –
the conclusion of the beta test leaves us with a product that can be
commercialised and is validated by its target segment – right from
the ideation stage through the product development process
Lastly, it is often much tougher to find alpha and beta testers for a
startup launching its products than for a company already in
business. Though, many, if not all, aspects of testing remain the
same – an existing company might not go in for alpha and can
always look towards an existing customer to test a product they’re
looking to launch at beta.
Also, the scale of the beta test differs from company to company
based on its scale – a new start-up might be satisfied by 110 beta
testers; however, an established player might need around 2,000
beta testers. Hence, in this domain, there is no one-size-fits-all when
it comes to the number, but largely the process is quite similar; it is
based on interaction and engagement and making the customer a
part of your larger product development process.

Building a Team
There are three ways in which a company can become a multiple-
founder company.
 The first one is when two or more people get together since
the start and start jointly working on the idea & building the
product.
  The second is when one person starts the company, hits a
ceiling when it comes to product development or marketing,
and gets more people into the company as co-founders by
giving equity in exchange.
 The third one is when an internal employee of the company is
elevated to a founding position as a co – founder, and
sizeable equity is given to her.

When it comes to the first way, that is of two or more people

starting the company together - it is important to get involved with
only those who have complementary skillsets to your own. For
example, if there is a two-founder, one of them needs to be an
inward facing Chief Operating Officer and the other needs to be an
outward facing Chief Executive Officer. Primarily, the COO’s
responsibilities would start with the product; while the CEO’s
responsibilities would start with the market. This would help keep
synergies in the partnership.
When it comes to the second way, when the company is started by
one person – the idea to get a complementary skillset based co –
founder remains the same. However, one important thing here is
that there can be a case here, where you do not get a co-founder in
at all. Single founder companies are rarer than those with multiple
founders. As the dependency on a single person’s mindset and
ability is often the determinant of start – up success, such
companies are preferred lesser by venture capital and private equity
players than ones with multiple founders. Many start up
accelerators and funds like Y-Combinator do not encourage single
founder companies. Building such a company is also tougher in the
initial stages and you get a co-founder in when you face a
consistent bottleneck in one of your critical areas.
When it comes to the third way, this typically happens due to the
combination of loyalty as well as performance of the employee
inside a company; which gets her promoted to the position of a co-
founder.
The most important part of starting company is building correct
team.some important point you should consider while building
team are:
1. You should look at hiring full time employees with the same
skillset related to company and interns to help them. For e.g. if you
are building a company from tech background the full time
employee should be from tech background and interns should be
there to help them with back office works like hypothesis ,alpha
testing, etc.
2. When it comes to choose between talent and attitude, you should
always choose attitude as mentality is all about it is difficult to
create a mentality for a person with only talent.
3. You should look beyond full time employees and interns as
freelancers can act as low cost source of expertise.
4. You should Also outsource non-core functions to freelancers or
other companies, who can then also bring their resource and
expertise on the table.
5. You should get people who’re more skilled than you in their
domains. This is because you wouldn’t want your skills and
expertise to be the glass ceiling that your company would grow.

Launching an MVP, Customer Development &

Product - Market Fit
 Once the beta testing of a product is completed & feedback
from the beta testers is incorporated into the product, it is
ready to get rolled out commercially. This is essentially your
minimum viable product – which has been tested only by the
internal team, alpha and beta testers and is being launched
 commercially. Predominantly with only must–have features
required for a successful first commercial launch.
 Getting your MVP to the market includes launching it and
driving up your initial sales.
 Launching it is easy – if it is a tech product, launch your
website or mobile application; if it is a physical product – list it
up on amazon or start selling through your website. However,
in both these cases – just by doing this – you would not be
able to drive up your sales.

Touchpoint scanning
 Touchpoint scanning is a method of looking at various touch
points your target consumer engages with while making a
purchase.
 You can look at placing your MVP at these touchpoints to
increase its sales chances.
Let’s take the example of the mosquito catcher & look at ways in
which we can do touch point scanning:
1. Where do they currently purchase such products?
Two dominant trends emerge here – the first one is that many
consumers have been purchasing such products online - via
Amazon, and the second is that many of these consumers have
been purchasing such products through local retail shops. We can
now focus on tapping these two trends to continue with touchpoint
scanning.
To explore the first purchasing pattern – which is through Amazon
– we need to continue interacting with beta testers to understand
the following:
First purchasing pattern
1. What are the competing products that they’ve been using?
2. What would be the typical waiting period that these consumers
are comfortable with while purchasing through Amazon?
3. What display aesthetics catch the eye when they look at
experimenting when they look for a new product in this space?
Second purchasing pattern
 To understand the of buying through small retail shops and
launching your MVP
 Touchpoint scanning through offline channels will help you
study the type of shops where buyers go to purchase a
product like this.
 Through interactions with such shop owners
 Establish contact with distributors in this domain.
 Enter into negotiations – to get into a distribution agreement.
The distributors would purchase the product from you and
place it in their store network.
On your commercialisation journey, you will start getting your first
sales once you launch your MVP by using techniques of touchpoint
scanning.
A product market mix is achieved when any start–up has placed a
product in the market and established an institutionalised process
through which it can drive up more buying from the same target
segment.
In this case, you can say that product market fit is achieved when:
1. You have been able to complete negotiations with multiple
distributors in this domain and have entered into distribution
agreements with them.
2. The product is selling, and distributors are coming in with repeat
orders they get through their store network. This means that the
product is remunerative and is making money for them as well.
3. You have developed a system or a process through which your
team can consistently reach out to more and more distributors in
this domain, with the aim of getting into agreements with new
distributors and expanding your sales.
The third aspect is pivotal in saying that you have achieved a
product market fit. Essentially, the core idea behind a product
market fit is not only that you are having distributors and sales but
more on the side of whether, along with having sales and
distributors, you’ve developed a system where you can reach out to
more and more new distributors; through whom you can
continuously expand your reach. A product market fit is established
with you’re continuously growing sales through both existing
distributors as well as new distributors. And that you’ve understood
the ecosystem when it comes to onboarding new distributors –
with regard to the financial arrangements with them as well as the
mechanism to reach out to them.
To understand product market fits and resultant distribution
strategy in more detail, let us look at the example of BharatPe.

BharatPe is an Indian fintech company that provides a single

platform for various digital payments. It focuses on small
merchants and Kirana store owners in India. It provides solutions
for UPI payments, card acceptance, small business funding, and
others. It helps small merchants to carry out transactions through
UPI (Unified Payments Interface) for free using QR Codes. Much
before the establishment of this company, most companies had a
closed ecosystem, where the merchants had to use different QR
Codes to receive payments through different payment gateways.
Every payment gateway used to charge more than 1% of the
commission. The merchants and SMEs accepted payments by
paying some commission, which had become a great problem. So
BharatPe founders thought of addressing this problem and
providing a single QR Code for different payment gateways like
Paytm, PhonePe, Google Pay, BHIM, and other UPIs, without any
commission.
In 2018, the founders discovered a gap in the digital payment
market. The gap was the use of various QR codes by a retailer to
make a digital payment. For instance, if the retailer has a QR code
for PayTm, but you want to make a payment through PhonePe, then
you cannot make the digital payment as the shopkeeper doesn’t
have a QR code for PhonePe. Before the launch of BharatPe, other
payment merchant companies charged around 1.5% on each
transaction.
BharatPe provided a single QR code for many digital payment
merchants and waived off transaction commissions. Thus,
merchants joined BharatPe to stay away from paying transaction
commissions.
BharatPe follows a unique distribution strategy. Before the
establishment of the company, other UPI payment platforms
differentiated between consumers and customers. The consumer is
the buyer, and the customer is the QR Code merchant, which acts
as a support system. So, the platform had to target two different
entities and provide incentives to two different entities to onboard
them. Whereas for BharatPe, its customers were its consumers. Its
consumer is the merchant. Thus, the company decided to provide
incentives to the merchant himself and benefits also to the
merchant only.
If we look at it closely now, BharatPe understands that this is a
market that is dictated by the merchant and not by the buyer. The
merchant decides through which platform will the buyer pay and
not the buyer. The buyer can only decide through which app she will
pay. Hence, their focus was incentivising the merchant and not the
buyer. The incentives that companies were earlier given to buyers to
use their app while paying also costed money. BharatPe was not
incurring this cost, and hence, it was able to break into the market
by waiving off transaction commission and easily incentivising the
merchant to display their QR.
To distribute the product, BharatPe used the agent-based strategy
where its agents used to go to merchants and install the QR at their
shops. Due to the financial benefits of using the BharatPe QR, the
merchant easily accepted it and encouraged more and more
payments through that as it was commission free. Once it had
merchants onboard using the agent-based distribution, BharatPe
got into lending, providing collateral-free loans to merchants at a
2% per month interest rate. Since the company already had access
to a merchant’s cash flow, it could relatively estimate how much
business that merchant had. Hence, this data was the focal point
on which the company made lending decisions. As the proceeds
from their sale were managed by BharatPe, the company adjusted
for their loans given in an EMI-based format and then settled the
sale amount with the merchant. This was a hassle-free settlement
system that was beneficial for both parties. BharatPe could boost
up its settlement system, and the merchant did not have any stress
of EMI dates.
Therefore, the product and distribution strategy followed by the
company helped them reach out to onboard more merchants and
cross-sell more services like loans to them. This helped them
establish a product-market fit as their offerings were attractive to a
category which had a significant chunk in the unorganized sector,
lending to whom was perceived as very risky for traditional banking.
Despite having similar data, lending as a service was also not
offered by any of their competitors. This showed how meticulous
their market mapping was.
The advertising strategy of the company was led by two popular
campaigns. They were “Ek Bharat Ek QR” and “Team BharatPe”.
Also, while looking at the marketing and distribution strategy, it is
important to understand that for BharatPe, the person who’s being
targeted is the merchant and not the buyer. Hence, the campaigns
are designed based on that profile.

“Ek Bharat Ek QR” was focused on patriotism, while “Team

BharatPe” looked towards cricket. Both were perfect for its target
segment, a large chunk of whom were cricket lovers and were also
based in both metros and non-metros. These campaigns created a
lot of recall and reach & made its QRs attractive for the merchant to
display as well as for buyers.
A synchronisation of sales & advertising strategies helped the
company create a product market fit and scale up fast.

Moat Creation
What is an economic moat?
The term “economic moat” refers to a long-term competitive
advantage that a company holds that protects its position in the
marketplace. The term is inspired by the moat that surrounded
medieval castles to protect the valuables within from invaders. A
company with a strong moat possesses a competitive advantage
that is both strong and sustainable.

How to Create an Economic Moat?

Economic moats can be created in one of three ways.

A. Production advantagesA company can achieve production

advantage-based moats in two ways:
1. ComplexityProcesses that are unique and difficult to imitate are
good moats, as they tend to be durable. For example, the formula
for the Coca-Cola syrup that creates the signature taste of the cola
soft drink is difficult to copy. The complexity of the product ensures
that other soft drink brands will not be able to replicate the product
and take away customers.
2.ProtectionA company’s products can be protected through
patents, copyrights, trademarks, or operating rights. Patents help a
company protect a product they spent R&D funds on to keep
advantages achieved through innovation. This is generally a way of
moat creation in the pharmaceutical industry.

B. Consumer advantages:achieving an economic moat is a

consumer advantage. Companies can create consumer advantage-
based moats in three ways:
1. Habit and horizontal differentiation:When customers prefer a
product to other competing products, there is horizontal
differentiation. Generally, companies or products with this moat
have banked upon habit formation.

2. Switching costs:Switching costs are costs that customers have

to bear if they want to change to another product or service. As the
switching costs increase, the customer becomes more locked in
with a company. Switching costs can also come in the form of
loyalty points or the inconvenience of switching. For example,
Amazon Web Services has a moat through this. They have a
program called AWS Activate – where they have a scheme that
gives around $10,000 as free credits to eligible start-ups in the
digital space, which enables start-ups to use the AWS cloud to host
their product. These credits expire within two years of activating
them. But they are a strong way in which Amazon catches potential
customers early in their building process. A way in which Amazon
has popularised this program is by tying up with co-working spaces
in India – where a start-up operating out of that space is eligible for
the Activate program. Once a start-up is on-board with AWS, its
team gets used to the systems there. Hence, even after the credits
expire - it does not look to change frequently as that would involve
the cost of training its team for competing platforms like Google
Cloud or Microsoft Azure. It would also involve dedicating time and
resources to get the system ready to shift. Hence, a moat is
created.
3. Network effect:The network effect occurs when the value for the
company and existing customers increases as more people use a
service or product. It creates a moat since the company becomes
more valuable and competitive. Examples of companies with
networking moats include social media platforms like LinkedIn and
Facebook. The moat in these platforms is their community
Let’s look at the example of share chat
ShareChat is an Indian social networking platform that allows users
to connect with people and share videos, pictures, and statuses in
their language. The features like direct messaging and tagging are
also included in this app. The app has close to 400 million active
users monthly. Its target audience is not limited to any certain
groups, but it primarily targets people who want to use social
networking platforms in their mother tongue or any regional
language. There are two ways in which content marketing is done
on the internet. This social media platform falls under the second
category. All the contents are user-generated here. Those contents
are shared with the other users. The feature that makes it unique is
that all of these can be done in any 15 regional languages that
ShareChat provides to its users. ShareChat mostly makes money
through advertising. Many companies use the platform for
advertising their products to the community present there, owing to
the app's user base. Due to its focus on regional languages,
Sharechat has many users from India’s hinterlands. Hence, the
community that the app has makes a moat for it. Along with being
attractive to advertisers, the community moat has also made the
app an exciting investment prospect – which is why Google is also
an investor.

Brand Value
Brand value is the idea that a company is able to generate more
revenue or charge a premium price because of brand recognition.
Brand value is significant for companies that have commoditised
products. For example, the juice is a commoditised product, so a
juice start-up must differentiate itself through its brand to attract
customers.
Brand value is the idea that a company is able to generate more
revenue or charge a premium price because of brand recognition.
Brand value is significant for companies that have commoditised
products. For example, the juice is a commoditised product, so a
juice start-up must differentiate itself through its brand to attract
customers.
One such example in India is Paperboat – which has similar
products to many juice brands but created a moat through its
packaging and advertising strategies, which connected the target
market with their childhood. This helped in brand building, which
enabled them to create a moat around brand value.
Moat creation is perhaps one of the most challenging parts of
building a start-up. It is also one of the most important ones. Also,
its important to note that moats cannot be based on price.
Discounting or pricing your products on low levels in the start may
be a good starting point; but it c ant be a long term sustainable
moat. Moats need to be different. For example, we often confuse
the moat of online shopping to be based around price. Its not. The
moat of an Amazon or Flipkart is its logistical infrastructure that
helps it cut the turnaround time taken to fulfil an order. A lot of
segments in the online shopping space have a delivery return rate
of close to 30%. The rate increases as the time taken to deliver a
product increases. Hence, the logistical infrastructure that these
companies have built – which reduces its turnaround time to deliver
orders is perhaps the biggest moat that they have.
A lot of us keep wondering that why do loss making start ups
operate or why do they keep attracting money. The idea behind that
is that over time their moat would be so strong, that it would act as
a strong entry barrier for any company looking to build in the same
space. This would help them turn profitable in the long run & it
would also help them in becoming strong acquisition targets for
any larger company looking to enter the space. We’re not trying to
justify overvaluations of start-ups here but are just helping you think
into another direction.

Pitching
Story:
At the outset of any pitch deck, a story should be included. This
story is the account of your client and how she is at present tackling
the issue that you're hoping to sort. It ought to be presented in the
form of a narrative on the PowerPoint. For instance, if you're an ed-
tech start-up in the school ed-tech space, your pitch deck should
begin with the school student's journey through the classNamees
and should highlight the classNamees that you're looking to target;
along with mentioning the problem that you're looking to solve and
how the student is currently solving it. The next step should be to
point out problems with the student's current approach to solving
the problem.
Problem and solution:
The next step should be to identify problems with the method of
solving the problem. After you have explained the problem, how it is
currently being solved, and any problems with the current solution,
You are now able to provide specifics regarding your plan to resolve
customer issues.
After outlining your solution, it is critical to concentrate on the
market. Sharing your own personal story of interactions with the
market before starting the company is an interesting way to begin
the market portion of the pitch. . During hypothesis testing, you
would have generated data that would demonstrate not only the
current state of the market but also how the market would readily
accept your solution and how it would be more valuable to the
customer than her current method of solving the problem.
The central idea is to support your solution with a mix of anecdotal
and data-based evidence.

Market portion
The market portion of the pitch would then display your Total
Addressable Market (TAM) and Serviceable Addressable Market
(SAM) in the future. You should also explain how you arrived at the
two figures of TAM and SAM while displaying them.
The main idea here is to show potential investors that the problem
is one that many people face, so you have a large target market
from a market perspective.
Another important part of the market part of pitch is to demonstrate
to investors that you are aware of the market and are in control of
the reality in the market. This is in addition to demonstrating to
investors that you are looking to target a large potential market. As
a result, combining knowledge and experience is helpful.
You can now get into the specifics of your solution, moving on from
the market segment of the pitch. In this section, you should talk
about how your customer would interact with your product and how
it would guide her to a step-by-step solution to her problem. For
instance, if you're developing a food delivery app, this section of
your pitch should be a step-by-step breakdown of the customer
experience from the moment they log on to your application, how
they can search among different restaurants, how they would place
an order from their preferred restaurant, and how it would be upon
delivery.

Experience of customer and highlights of the product:

The experience your product would provide to customers is
essentially demonstrated in this section of your pitch.
After providing a positive customer experience, you should now
focus on highlighting your product's most distinctive features,
revenue, growth rate, and rate of customer satisfaction, among
other things.
Additionally, key statistics vary by industry. Key statistics, for
instance, for an internet-based product include, among other things,
daily and weekly engagement rates and minutes spent on the
platform.
Additionally, key stats vary from stage to stage. For example, if you
are raising funds shortly after your beta and before
commercialization, your key statistics would include objective beta
testing parameters.
The primary idea behind this pitch section is to demonstrate your
product's feature USPs using data.

Future Plans:
You can move on to describe your plans for the future and how you
anticipate expanding in the future in the following section of your
pitch. It may include expanding your reach into the existing market
and new markets and introducing new product lines here. In this
section, you are required to demonstrate your overarching vision,
which could result in expansion, and how you anticipate your
business will develop.

Usage of funds and market mapping:

In essence, this is also one of the points at which the potential
investor evaluates your likely use of funds and the possible next
steps.
Your market map can be the next section of your pitch. Here, you
can show where you rank in relation to your rivals and how you
stand out.
For this, you can draw inspiration from market mapping.

Moat:
You can also talk about your moat while talking about your rivals.
The purpose of bringing it up now is to demonstrate to a potential
investor how difficult it would be for a competitor to surpass you in
this market and how your moat would safeguard your market share
and assist you in developing a competitive advantage.
You can include a few customer testimonials that show how
pleased customers have been with your offerings after moat.

Team details:
After that, you can show your team some details about their
education and prior experience. Usually, when a new business is
very small, The investor is betting on the team that is building the
business rather than the business itself. As a result, it's critical to
highlight your team's credentials here.

The primary objective of your team slide in your pitch is to convince

the investor that your team is the most qualified to build this
company.

Final slides:
Your final slide should be a consolidated one that shows, starting
with the amount of money you want to raise, where you are right
now in terms of the money you`ve invested in the business and one
or two metrics that are most important to your business, like
revenue, profitability, or the total number of active users.

Depending on the stage of your business, you may or may not

mention valuation because investments in start-ups recur through
instruments other than equity. If you're interested in raising money
through equity, you might state the valuation. However, keep in
mind that once you discuss the valuation, potential investors will
ask you how you arrived at this figure. Start-up investments
frequently take the form of convertible notes, which turn into equity
after a certain length of time and whose conversion percentage is
based on the company's development between the time of
investment and the conversion.
  Investment Thesis of Private Equity Funds

How to reduce mismatch?

Profiling the investment fund or investor to whom you are pitching
can significantly reduce this mismatch. You can find the right
investor by understanding the investment thesis that investment
funds typically adhere to.
An established set of investment criteria called an investment
thesis helps investors choose start-ups that meet their investment
goals. As an entrepreneur, the thesis helps you comprehend the
fund's investment strategy from a broader perspective.
This helps you figure out how your start-up fits in with the
investment thesis of the fund. Your chances of getting money from
that investor are better the better this fit is.

The Point Nine Capital investment thesis:-

Chris Janz, a partner at the fund’s investment thesis for Point Nine
Capital. Point Nine Capital is a Berlin-based venture capital firm that
only invests in early-stage Internet investments in areas like mobile,
online marketplaces, and Software-as-a-Service (SaaS). Delivery
Hero, Clio, Shift planning, Vend, Type form, and Zendesk are just a
few of the Internet companies that the fund and its managers,
Pawel Chudzinski and Christoph Janz, have backed from the
beginning.
First, let's look at their investment thesis for SaaS:
They look for software and hardware or software and data in
combination when they examine SaaS.
They are interested in both horizontal and vertical software as a
service (SaaS), which are different kinds of software services that
can be used in different industries at the same time.
They are just as interested in SaaS products designed for large
corporations as in SaaS products designed for small and medium
businesses. They are looking for SaaS products that have the
potential to spread like wildfire among small and medium-sized
businesses.
They are looking for businesses that have the potential to dominate
the market in the United States, with a few notable exceptions, such
as accounting.
They're searching for SaaS organizations that can possibly get to
$100M in ARR within 7-8 years and to $250-300M ARR in another 2-
3 years.
Let us now examine their market investment thesis:
They use a broad definition of marketplaces, just like with SaaS.
They view a marketplace as a digital platform that enables two or
more parties to "transact" with one another. A service, a digital
product, a physical product, or, in some cases, a piece of
information or knowledge may be the object of the transaction.
They look for startups that have the potential to build a moat
through network effects and use market dynamics to create unique
user experiences in fragmented markets. The fund believes that
fragmented markets, in which no single company controls the
market, present opportunities for marketplaces.
They are accessible to all C2C, B2C, and B2BC marketplaces. B2B
marketplaces are particularly appealing to them.
They are looking for marketplace platforms that have the potential
to become global leaders. As a result, they will typically seek early
evidence of their ability to operate in multiple nations.
They are looking for early indications that the business model will
bring in liquidity.
They look for founding teams with a good understanding of
business.
They believe that blockchain technologies have the potential to
upend numerous existing business models in the marketplace.
Additionally, the VC firm looks for markets that have the potential to
become truly significant. This indicates the potential to generate
billions in gross merchandise value (GMV) and hundreds of millions
of dollars in annual net revenues.
They will continue to keep an open mind when it comes to new
technologies, which they refer to as "frontier tech," even though they
are concentrating on two business models: SaaS and marketplaces.
They are very interested in brand-new opportunities in AI/ML,
blockchain and cryptocurrencies, IoT and hardware-as-a-service,
drones, and augmented and virtual reality (AR/VR).
Most technologies will eventually become commoditized, even
though superior technologies typically hold the key to entering the
market and achieving some early successes.
Point Nine Capital claims that it will continue to concentrate on
investments in the early stages. They will continue to focus on seed
investments, investing as little as a few hundred thousand dollars
up to approximately two million dollars in "seed" and "late seed"
rounds, typically in businesses with strong Product/Market Fit
indications and promising early traction. They will keep making
what they refer to as "founder bets."
Additionally, they state that they will continue to invest abroad. As a
German fund, Europe is their home market; they have invested in
most European nations and will continue to do so. They will
continue to invest in SaaS outside of Europe, such as in the United
States, Canada, Australia, and New Zealand, among other nations.
In SaaS, it is assumed that we can begin almost anywhere but that
we must win globally, which necessitates winning the United States.