Fight against COVID-19 – How our portfolio founders are responding to this crisis
We recently held a webinar with our portfolio companies to understand how founders are navigating various challenges they are facing due to COVID-19.
Below is the list of founders who attended the call.
Aastha Verma (Tardid), Antim Suman (Edgistify), Ashish Korde (Sattvaponics), Hardik Gandhi (Zestl), Ishan Nadkarni (Impact), Kamal Kumawat (Edgistify), Kevin Parekh (Sattvaponics), Kushagra Sinha (Jiny), Prateek Sharma (Nanoclean), Rohit Gajbhiye (Financepeer) and Umang Shukla (Edgistify).
This session was moderated by Subhash Prajapat from the PitchRight team. Amit Patel, Bhavik Rathod and Ravi Sanghvi from the PitchRight team also joined the call.
Here is a summary of the discussion:
Subhash: How are your going about cost reduction in order to increase your runway?
Ishan: We took a slight hit on revenue due to Covid-19. But it was not much because digital health is booming. In medium to long term business is going to grow. For short term we are cutting down on all non-essential costs.
With our office space provider CIBA, we negotiated a deal to not pay rent for 3 months. We also had a candid conversation with out CA partners that we won’t be able to pay for next 3 months. They have agreed. We initiated the same conversation with AWS but they didn’t agree.
In order to not extend this scenario as a fear to our team, none of the employee salaries have been cut. Nikhil (co-founder, Impact) and I have decided to not take any salary till everything goes back to normal.
If the world does not come back to normalcy anytime soon, we will ask our core team to take a 30-50% pay cut. Apart from that nobody else will take a hit. So 12 of our 16 team members won’t get affected.
Kamal: Before Covid-19 we were going on a dream run. A lot of deals were in the final stages of closure. So from business perspective we had to take a hit. Many of our customers are in e-commerce. So hopefully they will start their operations soon.
Luckily our rental agreement for our old office was about to expire. We didn’t renew that and saved our rental cost.
Our core team has taken a hit of 50-60%. There are employees who are getting 100% of their salaries based on their financial condition. One of our bigger costs was travel. But because of Covid-19 that is anyway not happening.
Subhash: Are you looking at changing your business model or diversifying your business?
Rohit: Luckily we are in education space which is not widely affected. But since Covid-19 is not something that will just last for 1 or 2 months, we had to think of alternate models.
A lot of other opportunities came naturally to us. For example we are into school fee financing. So we thought to leverage our existing distribution network to build a platform that aggregates educational content. You may call it Netflix for education. We started going to schools with the platform and so far we have seen a 100% hit rate for this product. So we are not deviating from schools to something else but we are looking at different products to pitch to our existing customers. The most important thing was to act quickly.
Kushagra: Till now we were focusing only on growth in Bharat. We had been building a new product category. We were successful to some extent since some large customers have adopted our product.
With Covid-19, I was not sure how valuable the use case of growth into Bharat is going to be. So we have paused some of the engagements on this front. We realised very quickly that over relying on just one case is not correct.
We also started diversifying geographically. This was always the plan to do it later on. But we expedited it because of the situation. We started looking at global markets starting with the US and other use cases apart from Bharat on-boarding like products to drive engagement, support etc.
We will start rolling our product in 2 months. Also we are moving to complete cloud platform to make it self serve.
Hardik: As a company over the last year we focussed on high growth companies who were expanding their physical presence across India. But because of Covid-19, expansion plans are now going to be put on hold. Still some companies continue to expand but a lot of them have stopped. For example Cure Fit has put expansion on hold since their business model is in trouble. So our solution has been put on ice for 6 months.
But we quickly branched out in our existing customers to other use cases so that we don’t lose out on our license fee. Luckily with a few large customers we were able to find use cases in operations where they were looking to drive process efficiencies. A few use cases got rolled out. And now we have decided to shift our focus from expansion to operational driven use cases.
Subhash: What best practices have you come up with for adopting work from home while still maintaining workforce productivity?
Aastha: Much before lockdown happened we anticipated it. We sent back employees who hailed from outside of Bangalore back to their hometown. We shifted almost 12 people to their hometown.
As a practice we start our day with a 9:30 a.m. call. On the call, the senior management understands from the team what they have delivered the previous day and what do they aim to achieve on that day. This also gives people a sense that the whole team is doing their bit. Whoever is facing some trouble can sort it out on the call. This is followed by a closer call at 4:30 p.m. Our head of engineering and productisation have prepared a progress update on each team member.
For us Covid-19 has come as a blessing in disguise. With Covid-19 every country is looking to become self sustainable. There will be lot of ease in local buying. Since we are in defence, now we can compete with larger foreign competition.
Ashish: Our major focus was development of some nutraceutical ingredients which we were planning to launch in Europe. That is now delayed by at least 3 months. Our labs have closed down. So essentially our scientists are sitting at home. We are working on building entire product roadmap.
We have not imposed any strict restrictions on working hours. We block certain hours in a day to have discussions related to IT and product development strategy.
Subhash: Have you made any changes in your business development strategy?
Ishan: Both business conversation style and messaging have changed. Messaging has changed to a painkiller positioning. We position our solution to take care of employee’s mental well being in this stressful scenario. Along with it company good will and brand also reaps benefits.
With respect to how we are communicating, video calls is the way to go. Everyone has moved online so closures will have to be done online. I am pushing our sales team to close USD 100K-1M deals on call.
Umang: For us the offering and the pitch have changed. We took the decision pretty early on 15th March and asked all employees to work from home. We restructured teams and workflows to ensure we are doing the most we can.
We found our customers now had some time to have a discussion since everything was shut. Hence we showcased our product to them. Our workforce changed their pitch towards product driven demos.
We also used this time to speak to our supply side which comprises of warehouse owners. Both operations and sales need recalibration going forward.
Amit: Thank you so much guys for joining. We will pass through this tough time together soon. But we have to make sure we keep communicating with all key stakeholders throughout this period. Over-communicate if need be. Track your business metrics, do scenario analysis and do business continuity planning. We have shared a MIS format for recording and tracking business metrics with all of you. Use it to constantly be aware of where you stand and also communicate with your investors to seek help wherever required.
We pray for your good health and safety. Be safe and wish you all the best.