Entrepreneur's Interview - OnUs Payments

MandE: Good evening everybody, today our guest for this entrepreneur’s interview is G.G. Shrinivas. G.G. Srinivas along with Hari have founder this startup called ‘Onus payment’. 

Without further delay I would request G.G to give us brief background about himself, his co-founder and founding of the company.

Shrinivas: Thank you. I am a 97 graduate of IIM Bangalore. Hari and I were colleagues in Standard Charted Bank - we were working in card sales at that point of time. We occasionally kept in touch with each other and saying some day we want to start off. Everything kind of fell in place thanks to the circumstances and the opportunity that was there at that time. Both of us were in Bombay fairly dissatisfied with what was going on – that is when we began working on taking this off the ground. 

So there was sense of comfort with each other because, we had worked as colleagues. We were just ordinary colleagues, there was bit of respect, but I wouldn’t call it as deep friendship. I can talk about respect for Hari, I think he is the one of the best sales man that I have ever seen in my Professional stint. He gets across to the table something very fundamental. So even if we are not friends at that point of that time, the fact that we respected each other, we said let’s try it out. 

We went about the classical way, I mean like you know, normally whatever anyone would do, when he starts a company. Get the idea it’s like one of our boss used to say take a deep drag of band substance or is their market at hand. So, we did a lot of validation in that point of time. We went to lot of seniors who were in this fields, I mean to a couple of heads of MNC Banks in India, A couple assets heads in India of MNC Banks. And said this is the opportunity at hand, are we dreaming this or is this opportunity that is there to be exploited. The unequivocal response that we had from everybody was, this makes a lot of sense provided you scale it up. This is going to be pretty big opportunity. I think to the extent that we spent little too much time on the validation, but we went about validating the complete idea. We went customers and we said if we give this product how much would pay? It was never about would you like this product - it was always about would you pay money for this product? We had gone to some of the high end schools in Bombay, which is where we were located at that point of the time and asked them about this.

We had industry experts who said this possible. We had customers who said they are willing to pay. The funny thing was Hari being Hari, went out and actually closed to sales and came back and didn’t had product, money, technology nothing. I mean we had not even incorporated our company! 

The next phase of it was we had to go back to our families and say that this is what we starting. For first time entrepreneurs like us, it was very important to have a backing of the family. So we went up to senior people in Hari’s family and said, ‘this is what idea is’ should we be going ahead - one of  them actually ended up being on our advisory board. So, that’s the great thing for us. They actually liked the idea, after we had checked, cross-checked, verified and re-verified and we had wasted sixth month of time, is when we said OK fine now we have to form a company now. That’s when we started a company. 

MandE: Could you explain what your company does so that the readers of the blog have an idea? 

Shrinivas: Without going into great details about what the structure of payment industries is like in India; Think about any transaction less than 200 Rupees these are the transactions like buying coffee, buying an idly, buying a tea, buying a cholle buthur kind of thing and you are doing a lot of these transactions day in and day out. There are lot of transaction we do in less than 200 bracket - the only transaction tool that is available to us is cash. We can go by our personal experience or whatever we transact on a daily basis which is less than 200 Rs. Irrespective of which category of customer class it belong to the only transaction tool that is available to us is cash and cash is increasingly becoming difficult to use as a transaction tool because some of the changes we are seeing to. As you know, right in front of our eyes the 50 paisa is going out fashion. People neither give 50 paisa nor accept 50 paisa. As late as 2 year back some people were accepting it and without knowing it’s not getting accepted. 

So what happens is the bulk of the transaction that we are doing is less Rs. 200. And this transaction cannot be done on cash. So we looked at this and said - is there an opportunity for us to tap into these segments. These transactions come into the ‘C’ category of transaction - This is large volume low value. 

If we keep focus right and if we cherry pick within this transaction, this is substantial value of transaction that can be done on this. Provided you get across the right technology, keep your cost low everything else goes with to run a company. So if you keep everything else constant you should make money!

MandE: Both Hari and you are from the sales background of and to scale up the back end operations will be IT. We have seen that many firms begin with creating the software themselves. I understand that you have not taken that approach. How have you managed all that?

Shrinivas: Hari and I are yes from sales background, Hari is one  of the superlative sales guy that I  have seen. There is fundamental understanding that when you are up to start up a company, to start off a new product, new concept it will take heck a lot of selling to push the product across. May be a little naively, but we believed that everything else can be made. Once customer exist and once he is willing to pay, the rest of the stuff can be put in place - as in raising the money to start the operations, getting the technology to run the operations, actually running the - operations everything can be put in place provided you have customer first. Obviously two of us are forced to think like this because we are not technology persons. 

I am a jack of all, whereas Hari is primarily into sales. The advantage this gives us is that when the operations are still not scaled up I am pretty much capable of handling operations, technology and marketing. Having said that jack of all trades never works out when things going to specialization. When the company is starting off somebody like me, would be able to handle, all the other things that Hari is not handling. There is an understanding between Hari and me what he is handling at this point of time is one of the important things of business. Getting to run a company is almost like pushing a vegan once it is running even I can go and give it a push, but when it is standing to make it move  is what is very difficult. Hari provides the traction I ensure that I take care of everything else. So, we don’t increase our cost base in the interim. Now once the whole thing starts of we need to obviously get in people who handle the technology, operation - at that point of time there would be fair bit of specialization.I think we are approaching that time because what we have done. 

Because of this approach, have we made mistakes? - Yes we have made mistakes. I mean there was a wrong choice of one of the product we had taken which kind of set us back by about four months. Would trained technology have helped? Obviously, I mean like you know Grade A technologist would have helped. Have we suffered from other fronts because of this? No, technology is one of the issues that we had. But it was not unmanageable. Thankfully it didn’t sink the company. 

We put the paying customer in front of us and align the rest of us behind the paying customer. With one and half year of this, I can say it works. 

MandE: Putting the customer front and aligning all other things behind it definitely has some advantages, would you also highlight some of the challenges yuo faced in this approach and how you handled it? 

Shrinivas: Between Hari and me we have 21 -22 years of payment card experience. Either in sales, marketing, operations, a little bit of service and collections. What you try to do is you end up a duplicating a whole bunch of things which are there on a payment card.

The biggest example I can quote is - the credit card allows you to do paisa transactions. When you go and buy something in a super market you can buy for 1063.15. In real life I have not done a 0.15 transaction ever. Now over the last 15 odd months we have done over 17 lakh transactions. Within this transaction everyone of the paisa transaction that has come to us, is actually an error by the customer on the data entry front. What essentially has happened is something where I can go and probably pump my chest and say you do a one paisa transaction, is nothing but a boast .Which doesn’t hold any value for the customer because the customer is entering into round figure transaction of one rupee. And here I have build up a utility which can take paisa transaction. Now look at this and ask - why did this you stupid mistake happen? Don’t I go out and purchase? To put it simply, if I am drinking chai every day, and this were to be taken on a card how many times paid in a paisa. And answer is ‘NO’, so why did I put it on payment card? - Because I was aping credit card. 

So the experience that we have some time noose around your neck. That’s when we decided that will not invent feature that are nice on credit card, unless the customer comes and ask for a feature which we should have the ability to turn it around fast. We would not implement that idea because we burnt our fingers in couple of features which we put on the card which the customer never uses. They are nice to tell on the sales pitch but all most never the customer has a utility for that kind of transaction. Sometimes like the paisa example I gave you, they actually become a point of failure for payment solution.  We went by heuristic of saying if Hari and I want to X number of features on the card. Hari will divide feature at by half and I’ll divided the features at by another half. And whatever is the number of features are left is the features that we implement. Any feature that has to be implemented after that the customer has to ask for it. The design that will have it will take into account that the features may be added later but would not make feature unless customer ask for it. So what happens is we typically go to the customer and say this is the basic product this is what it is you tell us you will use this and if there something needs to be added we can turn it off fast that’s not a problem. Thankfully we have a very good technology partner. So what happens is we can implement those things very fast. We know that we are not wasting our money in terms of spending a feature. So it actually worked out for us very well. 

A wasted feature is wasted time and wasted money. We have couple of them I mean like we talk some experience on this.

MandE: You said, customer feedback on features is essential, did your dependence on this feedback hold you back?

Shrinivas:Thanks for the confluence of a couple of technology issues of that we had,  for first seventy days of operation we visited the customers every single day and at 11.00 O’clock in the night. One of us would drive, 50Kmtrs, two ways and visit the customer at 11.00 PM including December 31st of 2010. If you visit a customer 70 days continuously doesn’t matter whether the customer is a dumb guy - he will start talking. Even if you are deaf you will start listening because there will be issues on the card which would start understanding pretty fast. 

In hindsight, that was the best thing would have happened to us. Rather than the pain of going there every day at 11.00 O’clock that was the one best thing happened to us because at the end of it we understood how the customer is using. Simple thing like a 21 years young girl telling a boy with her - telling him that I will pay by my card it is much cooler! It makes your day. Obviously I am not giving you the bad news. 

70 days of visiting the customer you pretty much get it. I would honest enough say that we say that this is the not part of the design, If anything else it would be part of the bug. But it helped us a lot. 

Something that we tried now consciously to do that even when we set up installation, however small the installation is we ensure that for a  25 days we will visit the customer every alternate day. To a point the customers starts asking why are you not handling over the solution to us. There are a the couple of features on the card which we do not hand over because you want the customers to realize, otherwise he will never gets into the operation. We continue to visit - Till he says why you are coming so often, it is at that point that we complete the installation and at that time we handover. 

It is at that point of time that you understand lot of things which are going over there. First and foremost you know we need to know what the points of expansion in the business are.  It is not to understand the customer business, but it is to understand where our future points of expansion are. It’s a small installation one is I can say god has given me small installation to this place. Other is to look at it and say where can I expand his business and in the process expand myself also. So, it helps us in the 25 days to understand where we can be, where the solution has to move, what are the kind of thing. So, we added a couple of solutions, which are totally not part of payment in this process when we understood from the customer, so it helps us there, for us it is a big thing, even it is painful we will have to visit the customer first 25 days at least every alternate day. Obviously it is a big installation we will have to park as on there of 4,5,6,7 hours a day. In the process we understand good amount of thing of the customer and that tells us what are the feature sets that we need to have? what is the pain points? what is the future expansion that can happen?. You pretty much bit understand the flow of transaction, whose blocking the process, whose helping the process, who are your early adopters. So there is lot of things that you understand at this point of time. That kind of helps us to define the features set.  

MandE: Lot of aspiring entrepreneurs have questions on funding so – could you tell us how you organize your funding? 

Shrinivas: As a background I think we lost about 5 and half months of time on funding. Before we had gone off this entire round, there were three things that we ensured. 

The first thing we said was at all points of time have sufficient capital to run the business one mistake should not turn the game. That helps because both of us are experience professionals to that extent we had sufficient of payments so that we could spend on the company. 

That the second what we did was we said that as founders may be will not pick up money from company as in charges but as founders we also will never cross a particular limit – that is we would not get into a situation of good money of the bad money. We drew a line of what you would invest. We had friends and family money always as a backup, there are commitment from friends and family due to us. Third we were in touch with some couple of angels who were really helpful in the whole process. 

Thanks to a confluence of things we wanted to pick up our first funding from NSRCEL, that got delayed extremely and the mistake that we made and this is the second big mistake that we made  one was obviously the whole process of super validation and seeking over the customers and customers starting of everything. This is the second mistake that we made was we didn’t know when to  say no to NSRCEL money and actually go to the angle who was pretty much saying come and take the money. Because he was happy with the traction and he didn’t wanted us to die for lack of money. I think we did a mistake there. Yeah, it didn’t kill us it hurt us but all that were same mistakes, something that will carry forward from this wrong.  One was the complete validation phase we kept on validating. Second one we were also turning all the stones to figure out where we can find funding. Because we knew that some time we would be going for big amount of funding. So one of the things that we did was we started looking out for money not   asking for money but looking out for money before there was a need. We are happy that point of time because crux comes to crux we can get about 10-12 months of money almost in weeks time into our bank account but do you want that No. No we don’t want that because - like ambulance coming to you early is good thing but actually calling it is early is not a good thing.

MandE: In the discussion you did mentioned about first mistake waiting for a customer. Could you just tell us bit about that?

Shrinivas: We have three first customers all three of them like the product. All three of them are saying ya let’s do it. So, we are wearing the bride’s maid dress and marriage is not happening. 

Were we doing something wrong? Actually to say we are not doing anything wrong - we are good thing, we are adding value to the customers and customer are saying we are interested in you but guess what he is interested in his business I mean he is running his primary business. And there are days when I would to get frustrated and lets pick up the phone and like you know lets pursue and Hari would stop me , and there are days he would do that and I would stop him. We were like bride’s maid for for four and half months. 

Thats heck of lot of time, I mean like you know when you have product ready, everything is ready with you and you are dying to start of the race. And dam referee is not shooting the gun!. 

So you start wondering what’s happening. I don't know unlike the funding part of which doesn’t mentioned is the second mistake which where we clear learning in terms of to do next time when we have a situation like this. Here I don’t know what to do? Thankfully, I have never been in the state again. Its learning but I don’t know I will apply it next time.

MandE: What is your message for other aspiring entrepreneurs?

Shrinivas: I don’t know, whether we are to pass messages and give advice we need to have bank balance - Bank balance that has come from this operation.

When you look back at whole journey right from the stage of  validating  the idea to this point of  time where we are saying hey we are doing X number of transactions that represent a valid like high number of  transactions per month kind of thing. The sheer number people would want to help you is phenomenal and to anybody who doesn’t start off and cannot understand what I am talking about - because number of people who are likely to laugh at you, and declare as you public hazard, trying to kill you by laughter for having propounded such a silly idea is so miniscule compared  to the number of guy who would actually go on a limb and help you with the things like where find a customer, where to find the technology help you on their area expertise, giving a general bit of advice, maintain your operations. 

It is phenomenal, for example I have friend of mine sitting in UAE and writing major amount of code for me for free. Why because somehow people will always help somebody who is taking a risk. It’s something that we always discount. It is when you start off that you realize - there are some really nice people who really love to help anybody who are taking risks. 

I call it good luck that will not be a part of business plan but ones you are start off their bound to be huge amount of good luck. There are I mean like there are lot of people who would like to help you. It is very heartening thing, it’s very non-monetary payoff for the whole thing, obviously in the start of thing talk about non-monetary pay off.

MandE: Thank you once again for being in this interview. Thank you.