Monday, December 31, 2012
STARTUP SPECIAL Starship Enterprise
Powering Customer Engagement
Firm has unique platform that does not require customers to fill up forms or carry membership cards
When Aneesh Reddy, Krishna Mehra and Ajay Modani—all alumni on IITKharagpur—quit their jobs to set up Capillary Technologies in 2008, they did so without any concrete business plan. “We were young and had no major responsibilities. So, it was the right time to take the risk,” says Reddy, now the CEO of Capillary, who was earlier with ITC. Mehra was at Microsoft Research and Modani at Danieli India when they took their entrepreneurial plunge. Their gamble has more than paid off, what with the Bangalore-based customer engagement solutions venture—which Capillary ultimately morphed into—having raised $15.5 million (about 85 crore now) in a first round of venture funding in September.
The friends had initially experimented with a few ideas. “Mobile and retail were booming and so we thought of focusing on these sectors,” says Reddy. They first created a traffic management solution for the Kolkata Police but dropped the idea when they realised there was not much revenue potential in the solution.
They then came up with a deal aggregation site. But the team quickly realised that in a post-Lehman world, retailers were more worried about getting customers into stores. “We asked retailers what they needed, what problem of theirs we could address. They all wanted some way of getting customers back in stores,” says 28-yearold Reddy. Armed with a 15 lakh soft loan from their alma mater’s entrepreneurial cell, they went about building a customer engagement platform that did not require customers to fill up forms or carry a membership card.
The customer information is captured incrementally at the billing counter each time he or she shops and the customer’s mobile number is his or her unique identification number.
The database is stored on the cloud and stores can choose to manage their own database or outsource the management to Capillary.
Like other Software as a Service (SaaS) models, the startup also charges a monthly fee of $100 to $500 per store per month. The product was launched in March 2009 and the company acquired its first five customers, including Indus-League Clothing, Indian Terrain, Numero Uno and Madura Fashion & Lifestyle’s People brand, soon after.
Capillary now provides clients analytics based on the data they gather, including details like shopping trends, customer preferences and profiling. Retailers can also run campaigns like sending out offers to a select group of customers through the platform.
Reddy says their most revolutionary product is the instant cross-selling engine, where a customer gets a discount on a product within a store as he is billing other products. “We have seen conversion rates of up to 30%,” says Reddy. The company now has 140 clients, including some big brands like Raymond, Pizza Hut, Puma, United Colors of Benetton, Peter England and Nike.
“When they came to us around three years ago their idea of no form-filling and no membership cards were revolutionary,” says Mrinmoy Mukherjee, director of marketing at Raymond. Mukherjee says their premium memberships have grown six times since they got onto Capillary’s platform. “Around 70% of our sales come from these members.”
In 2009, the company was placed second globally at QPrize, Qualcomm Ventures’ seed fund competition. This fetched them $10,000. In December that year, a handful of angel investors, including former chief executive of Cafe Coffee Day Naresh Malhotra, put in around $500,000 and in January 2011 a further set of angel investors, including Google India’s Managing Director Rajan Anandan, pumped in $1 million. It was following this round of angel investment that the company went international. “Our strategy was simple. We approached our India clients that had international presence,” says Reddy. The company now has clients in 16 countries across Europe, Middle East and South East Asia.
With the $15.5 million venture funding from Sequoia Capital, Norwest Venture Partners and Qualcomm Ventures this year, Reddy says they intend to expand their reach. The company, which is targeting around $7 million in revenue in the current financial year, services 10,000 stores. “We offer a strong value proposition to our clients. There is no reason why we cannot reach 500,000 stores soon,” he says.
RADHIKA P NAIR ET121221
The Loyalty Leap
How to energise the workforce
1. Failure to find the FIT. FIT comes from asking three critical questions: What are my gifts and talents? What am I absolutely passionate about? What needs to be done-where can I make a contribution? When my gifts and talents are aligned with my passion in a job that makes a valuable contribution, I'm happy, alive and having fun at work. Most companies are not very rigorous about matching employee talents with the needs of the company. They're not rigorous about finding the FIT. We talk a lot about wellness, but people who are doing work they are not gifted at and not passionate about are not well; they're mentally and emotionally ill. This contributes to decay and deadness in the organization.
2. Too much emphasis on TITLES versus RESULTS. Lip service is given to engagement and empowerment, but the real deal is command and control. Employees are inadvertently taught the importance of hierarchy in getting things done. The result is a culture of fear where everyone plays to titles instead of doing what they know is right for the business. The Internet just might be the greatest democracy on the face of the earth. If you have a great idea, people follow you. If your content isn't compelling, they don't. Creating a culture of innovation is a lot like the Internet. The best ideas, not tenure, titles and hierarchy, win.
3. Lack of courage to test new ideas.
People's spirits are deadened when the waters of creativity are stagnant. Zero defect cultures foster the kind of cautious inactivity that slows the organization down and makes it sluggish. We can never know our true capacity unless we are encouraged and willing to push the limits and test the boundaries of what we are capable of. Innovation is the result of experimentation and experimentation is the result of risking more and failing faster. This why leaders who create an environment that inspires creativity and ingenuity aren't afraid to reward intelligent failure.
4. Employees who have no voice. People who have no voice don't feel trusted or valued. So, they check out. The true experts in most organizations are those closest to the point of action doing the work. They know where the opportunities lie, they know what market trends are emerging, and they know where waste and redundancies exist.
Leaders who fail to put the true experts in control of their work create a paternal culture where creative discovery, freedom and responsibility are traded for a reactive, victim-like mentality. Innovation is radical because it not only changes the rules of the game; it's about changing the rule makers.
5. Lack of diversity. We're not just talking about cultural or ethnic diversity; we're talking about diversity of thought and ideas. If you only hang out with people who look and think and act like you do, this doesn't unleash your creativity, it sharpens your prejudice. It takes guts to surround yourself with diverse others. They are often eccentric, weird and difficult to manage. But they are the ones who will draw you out of the comfort zone and take you on an adventure where you can find the NEXT big thing. They will keep it interesting and lively. Innovation feeds on multiple points of view.
6. Employees who embrace a VICTIM mentality. People want freedom, but they seek safety. Far too many people we have met in our travels fail to assume responsibility for their own happiness and well being at work. They assume it is the organization's job to make them happy and content. They assume it's the organization's job to train and equip them to become more marketable. When the organization fails, people jump into the blame frame and start pointing fingers. As this cancer spreads it deadens the spirit of the enterprise.
7. Failure to acknowledge the WHOLE person. Whether it's sick kids, aging parents, planning a vacation, visiting a doctor or dropping off the dry cleaning, life happens when life happens, not just before 8:00 am and after 6:00 pm. Organizations that fail to acknowledge the person behind the software developer or customer service agent fail to acknowledge the distraction that keep these individuals from doing great work. Innovative companies figure out how to eliminate these distractions and make people feel valued. The result is an incredibly unique culture that has a distinct competitive advantage in attracting the best and brightest talent who, in turn, create world-class products and services.
8. Lack of optimism and resilience. No one gets it right in business all the time, but successful companies and leaders have the ability to bounce back from failure. Unsuccessful companies let it take them down. The assumption is that optimism and resilience is something you are born with, you either have it or you don't. The research suggests otherwise. There is plenty of evidence to suggest that optimism can be learned and bred into a culture intentionally.
Innovation is messy. It doesn't follow a neat, linear path. It offers no guarantees. And, it tests the validity of an idea through trial and error. This is why the "bounce back" factor is so critical. People keep moving forward, trying new things that keeps them invigorated.
9. Inability to celebrate and have fun.
There is a "deadness" in organizations that don't see the value in or don't know how to celebrate. It's amazing how many really cool things can be going on in a company that most people don't have a clue about. Celebration fuels people's fire to do the next great thing, without it heroic contributions are missed and the emotional bonds that wed people's affection and enthusiasm to the company are weakened.
10. No CAUSE to fight for. When the work is defined in terms of a cause what follows is a movement. A healthy level of fanaticism and missionary zeal characterizes the movement. People want to belong to something larger than themselves-something that gives their lives meaning and significance. People who have a direct line of sight between their individual contributions and the cause are more engaged. They see innovation as a necessity, as a way to further the cause.
Drs. Jackie and Kevin Freiberg are best-selling authors of NUTS! Southwest Airlines' Crazy Recipe for Business and personal Success and NANOVATION: How a Little Car Can Teach the World to Think Big and Act Bold.