Timing the features based on market adoption
Kalyanaraman Vaidyanathan (Kalyan) Co-Founded Nadhi Information Technologies along with Ravi Mundoli. They both are Civil Engineers from IIT Madras who did graduate work abroad in the US, worked for a few years, including together as colleagues at i2 Technologies, before returning to start Nadhi. They wanted to take the learnings of operational efficiencies that manufacturing industries were realizing using supply chain solutions and apply it to the construction industry. That led to Nadhi and its flagship product nPulse.
Construction is a fragmented industry with several stakeholders like owner, architect, contractor, sub-contractors, consultants, suppliers etc. who have to come together to deliver a project. There is a lot of information latency between planning and execution. Projects were being managed with lots of manual data entry, and lots of duplication of the same data entry, and all of decision making and project monitoring was backwards and ineffective.
Having identified the problem, validated with discussions with a few IIT Madras professors, and industry experts, the team was confident that they could capture the market. But initial response when trying to sell was underwhelming and surprising to say the least. They had to pivot the product, the business model, and the customer segment more than once to get to where they are today. About the only thing that has not changed (yet) is their unwavering focus on selling only to the construction industry.
On the customer segment front, their initial product was targeted towards the Small and Medium companies who did not have systems in place. But they quickly learnt that the time to sell to SMB was about the same as that for a large enterprise and also that large enterprises also needed the kind of solutions they were developing. Today, they cater to both but predominantly target the mid to large enterprises although the solution has been deployed in a few small and medium companies as well. The change in customer segment also meant a pivot for the product with a different focus. The second pivot on the product front came about in the learning that project monitoring and control was considered as a mature area that everyone thought they had solutions for and no one did effectively in practice. That meant an uphill attempt in trying to sell value and convince clients that what they had was an effective solution. So, they pivoted the solution again. Today the nPulse solution is designed to be a platform that integrates data from the various stakeholders (and their systems) so that they can all effectively collaborate on one source of information. The stakeholders can interact with the solution using any device of their choice including mobile devices and browsers. And the solution uses a proprietary analytics engine that learns from the collaboration of the users to provide project performance and lead indicators to potential project delays.
Their business model also morphed over time. Initially the solution was priced on a per user per month basis. But in an ill-fated attempt to optimize, clients purchased fewer licenses than optimal number of users, overloaded the users, and did not derive the desired ROI. So, Nadhi went into an unlimited user per module per month pricing model. They were one of the early proponents of SaaS in 2007 for construction. Today their practical experience is that some of their clients use the SaaS for trial and a conventional on-premise for enterprise roll out which also they support. All of these pivots on segment, value proposition, and revenue model to make a scalable business happened from Sep 2009 till about April 2013.
Their initial customers were obviously friends and families and introductions through the IIT Madras professors. Nadhi is a bootstrapped company that has not gotten external funding. To fund their product R&D, Kalyan and Ravi also did a lot of Lean Construction Consulting in the initial years. This also had the side benefit of developing a deeper understanding of the workings of the industry while generating funds to keep the company running and organically growing.
Kalyan’s advice to startup founders – sales is hard on two dimensions. While the epiphany of an idea is great, taking it to market and creating a sustainable business takes a lot of marketing and sales skills. Understanding marketing dynamics, product positioning, customer expectations, and pricing takes quick learning and a few iterations to get it right. And however good your idea is on paper, execution matters! This means that sometimes you cannot be too ahead of the market in terms of capabilities. For instance, Nadhi had a mobile solution that can work on low bandwidth in Symbian O/S way back in 2007! That was way ahead for the Indian market. But today almost any construction solution is expected to have mobile access. So, one has to sense the market pretty early, but have a timing element to be just ahead of the curve to see better acceptance of your products. On the timing, Nadhi’s second attempt is so far more successful. He quotes the incorporation of analytics on his product as the right timing. Just when the market was warming up to analytics based solutions, the nPulse solution incorporated it. Waiting for a few years would be too late.
He also advices that having sales people who can understand the customer’s problems and the domain into which they are selling into is hard to find but need to be found. In their case, the construction industry people does not have patience for sales people who cannot speak and understand the domain and their issues. He also realized that finding a knowledgeable sales person who is willing to work for a startup Is very difficult but putting the effort in finding them is worth its weight in gold.
Nadhi currently has around 15 people between product development and consulting. Kalyan and Ravi did all sales by themselves until recently when they have hired one full time sales and marketing person. They are currently exploring markets outside of India and specifically in the Middle East. Nadhi has been a finalists of Asia’s Top 100 Red Herring finalists for two to three years in a row and is a part of the Nasscom Emerge 50 in 2013. Nadhi was also one of the two companies in India to be selected in the SAP startup contest on the Hana platform. In 2014, Nadhi was the proud recipient of Express IT awards for business innovation and Kalyan was given the Entrepreneur of the year award by CII Chennai.
As of now, Nadhi (http://nadhi.in) is still a bootstrapped company and are looking out for funding. Any Investors?