I met Srikanth in TiE Chennai and Chennai OCC. We chatted a couple of times. I introduced him to one of the most valuable marketing experts in Chennai – JK Iyer. In one coffee session (remember it being Barista in Khader Nivas Khan Road) that lasted a couple of hours, I listened with fascination the story of Funds India.
When I requested Srikanth to answer my seven questions, he readily agreed. Here is his story. Enjoy.
What inspired you to become an Entrepreneur?
To a certain extent, I can be called an accidental entrepreneur. I was not planning on starting a company when I did (with my friend Chandra, in late 2008). It was a case of an opportunity meeting a latent desire. I can trace back the desire to become an entrepreneur to, as many in my generation will probably do, the dot-com days of late ‘90s. I started my career at IBM and worked there for five years, and when I tired of that (and had secured my green card ), I moved on, through a referral, to a start-up company in financial services field. Looking back, this move appears providential – it both sparked my interest in start-ups as well as started me off in financial services. Working in this company – FolioInvesting.com – opened my eyes to the possibilities and the excitement of creating a product/platform that would be used by thousands of people. This is a common-place feeling today – in the days of personal blogs with thousands of readers and followers – but 12 years back, it was quite exciting to be directly part of a team creating a tangible, visible product that is being actively used by a lot of people.
Although, I moved on from this firm into another large firm, the desire to get back to starting up – to create something, own it, and be responsible for it – was always there. So, when I came back to India in middle of 2008, my friend of 20 years, Chandra, and I started exploring possibilities of creating a financial services platform in India. He was a very seasoned entrepreneur (both in US and India), and so I knew that this was an opportunity that does not come along very often in life – an opportunity to work with someone I completely trusted, in a domain of my liking, creating a product in an under-served market. And FundsIndia was born.
What products or services do you provide?
We are FundsIndia.com. We are an online financial services platform, specializing in mutual funds. We are a transactional platform – meaning our platform enables people to transact with real money, make investments in different ways, and manage it efficiently. We are partnered with 38 mutual fund companies in the country and with 33 banks for online net-banking transactions. The cool thing about our platform is that we offer technology enabled features for mutual fund investing that are not found in any other platform in the country. There are many people/platforms that will sell investors mutual funds, but none of them specialize in it the way we do. For example, one of the most favorite method of investing in mutual funds is through the mechanism of systematic investment planning (SIP). While mutual fund companies and other platforms allow you to do SIPs, we offer seven different ways of doing SIPs – all simple variations that enable people to either invest better, more flexibly, or more profitably. We are able to do it only because of our technology and business of scale. This is just an example – there are many such new methods of investing that we have created that make investing either easy, flexible or profitable for our customers.
Also, we enable people to manage investments of multiple family members within a single login id. Typically Indian families invest in the names of their spouse, kids, or parents, and with a single FundsIndia login, they can all be made and managed in one place. We also offer other financial products such as equities (stocks), corporate fixed deposits and online-enabled NPS on our platform.
Who are your target customers?
Our customers can be anyone who is saving and investing for their future. If they are comfortable with online banking, they are potentially our customers. Another way to look at it is if they are a customer of an eCommerce site like FlipKart, they are probably our customer as well (so, can we get similar valuations, please? ). Typically, our target customer tends to be in early thirties working in a new economy corporate job. However, we have customers from across the country as young as 23 to as old as mid 60s.
How did you get your first paying customer?
The first customer that I remember was a gentleman from Pune. We had just launched our service, and had small press clippings about our press conferences. This gentleman, whom I have not met yet, opened an account with us, and started small investments. We were thrilled to bits to get the first ‘stranger’ customer. But we were really surprised by what he did soon thereafter. We were yet to carry HDFC mutual fund on our platform, and this gentleman wanted to invest in a HDFC fund. He simply sent us a cheque for Rs. 5 lakhs and asked us to please make the investment and move it over to his account once HDFC comes on board. That told us two things – it validated our assumption that we were going after a good, under served market, and it also reminded us that we are going to be keepers of trust from every one of our customers. The trust and confidence shown by this customer was humbling, inspiring, and gave us a sense of responsibility that no amount of words could have.
What challenges do you face in your business?
When we started our business in the mutual fund industry in India, we did not know that we were entering the most interesting period in the history of the industry. Since 2009, when we launched our platform, too many things happened on the regulatory front. Most of it was to our advantage from a business stand-point, but they introduced a sense of constant change that we had to be always on the alert for. Even today, there are changes afoot in the industry, and we don’t know how much of our attention will be diverted in dealing with that. So, regulatory changes and dealing with them in context-switching, hurried manner is our top challenge.
Apart from that, by very nature of our business, we have some challenges. We intermediate between retail customers and many dozens of financial institutions – mutual fund companies, banks, payment gateways, brokers, registrar and transfer agents, corporate fixed deposit houses, data providers, research firms etc. Enhancements to our platforms, in most cases, need help from one or more of these entities, and the pace of progress can be quite frustrating at times.
On the internal front, hiring good people is always a challenge. We have a core group of very talented people and have very low attrition (knock-on-wood). However, trying to grow the firm with good talent is not easy. Especially on niche technology areas like mobile development, and in senior executive positions like product and marketing management.
How do you interact with your peers (both offline and online) ? Do you have mentors or coaches?
I am lurker in many online groups – both locally in Chennai and outside. Groups such as Chennai open coffee club and larger entities like TiE are very useful as steady points of contacts to keep in touch with fellow entrepreneurs in the area. Outside Chennai, I try to keep up to date using Twitter and Reddit. Also, the board members from our VC investors are very helpful getting us in touch with important, useful resources that would help us.
Regarding mentors or coaches, we don’t have one on a regular basis. We do consult with Prof. JK in Loyola (thanks, Dorai) and, of course, Dorai himself, whenever we can get access to their time
What lessons have you learned that you would like to share with others?
Although I can talk of several here, let me just focus on one thing. When starting a company, the founding team will rarely have the complete set of skills that will be required to run the business. The team would need to realize this early, and address it aggressively as soon as possible. We learnt this lesson the hard way in terms of the need for marketing skill. We were in a retail business, and the need for marketing was paramount. I think we postponed the decision to get external help on this too long and that lead to an inefficiency of our spend, especially in the early months of our business. So, it is important for businesses to realize which vital area they are lacking in talent/experience to run their business and address it explicitly and quickly.
We were trying to create a directory of Chennai companies. Srikanth took it upon himself to register a domain name, create a wiki and move the list from Facebook to the wiki. it is open and any one can register and add their own company. Take a look at Chennai Startups.