Intertwining Geopolitics and Profits! Good Idea for startups? | #Roundup #139 | The Startup Operator

[00:00:00] Hello and welcome to another episode of The Startup Operator Roundup, I am Roshum Karya Pha And I am Gwingen Saha and together we break down the biggest headlines from India's growing startup ecosystem

[00:00:11] For the 139th edition of The Roundup, we'll be talking about ease my trip that decided to halt flight ticket bookings to Maldives This is amidst the rising tension between India and the island nation Transitioning to the tech sector, we have somewhat of a scandalous story

[00:00:26] Leaked emails have revealed that Qatar is promoting startup shares without consent What kind of implications could this have for the company and the industry? We'll talk about that Moving on, we'll be talking about the large number of layoffs you're witnessing in large tech companies in the US

[00:00:41] This includes the likes of X, Meta, Google, Amazon, Salesforce, you name it And finally, we'll be talking about the pickers successful close of the first round of its $40 million new fund Which will be invested in AI and enterprise as startups

[00:00:55] So definitely exciting times ahead for the fund as well as the start-up set will be partnering with But before we dive in, if you are a regular listener to the startup operator podcast, do consider liking this video And sharing it with your friends

[00:01:15] And if you're a new listener then consider subscribing to this channel for regular updates from the Indian startup ecosystem So Roshum, the biggest news from the previous week is of course the CS2024 And closer whom we are having the Indian startup week underway in Delhi

[00:01:30] This is organized by the Department of Promotion of Industry and Internal Trade And this event which started on Wednesday happens every year to celebrate the achievements of the Indian startup ecosystem

[00:01:42] This year, Prime Minister Narin Ramosi even said that India is among the top five economies in the world today And the startup ecosystem is the third largest globally And the main driving force behind these achievements is of course the youth of the country

[00:01:56] So maybe in the next round, I will be talking more about this But what are your biggest takeaways from CS2024 Well, I saw all sorts of fascinating inventions at CS There was a thread that I had shared a while back

[00:02:12] You know you had intelligent toilets, flying cars, newer devices I mean things like a keyboard for your Apple phone or you would cat doors And new form factors emerging right I mean there's a little bit of a fatigue with the phones

[00:02:32] I think you know and you know I think Apple also is noticing that there's a little bit of a flatlining People are choosing to skip editions The newer Apple phones are at about $1,500 Which is the significant cost

[00:02:46] And I don't think people will keep upgrading the way they have been So everyone is on the lookout for that next form factor I mean we certainly spoke about you know humans AI pin There's also this rabbit rabbit race

[00:03:00] So there's plenty that is going to come up in 24 and 25 So let's see what new gadget we will all be adopting this year on the next Yeah, also another thing which wrote for me from CS is the whole

[00:03:15] Re-shifting of focus for car manufacturers Honda and Hyundai and the likes They're now moving towards hydrogen fuel cells And not only that they also Many of them are talking about using sea-wage or biomass to produce hydrogen fuel So that is something which India hasn't pioneering

[00:03:33] And now it is taking a global stage at the CS Massive investments in green hydrogen both by a company and a dany here in India Multiple tens of thousands of crotes has gone into it

[00:03:45] And God knows we will require all of those energy channels to fire for us I mean not literally So yeah fantastic always great to see new inventions new innovation Okay, so let's dive into the first headline of the roundup Ease-might trips suspended flight booking for Maldives

[00:04:06] Amist rising tension between the island nation and India The Ease-might trip co-founder and CEO Nishanth Pithi Took two eggs and said that in solidarity with the country The starter has suspended all Maldives flight booked Prior to this social media post Ease-might trips other co-founder Prashanth Pithi

[00:04:24] Said the starter would come up with crazy special offers for luxury travel And Ease-might trips competitor make my trip even reported That there's a 3400% increase in on platform services for luxury since PM Modi's visit to the Union territory

[00:04:40] While this is all good to promote tourism in luxury they when we understand you know the geopolitical reasons for doing so What do you think of you know a company getting involved into the geopolitics of the nation?

[00:04:53] Well a company exists in society and a society on a nation are intertwined So obviously you know You know these things are very closely related ready. You can't operate in silos

[00:05:04] Having said that look coming there is the there is a skeptic view and there is the sort of a passionate person's view Right, and this skeptic view is all of this is marketing and you know Nishanth and Ease-might trip are just like riding on a way

[00:05:20] On nationalism and the prime minister's call and what not well that be that asset may You know the passionate persons view is that you know their true nationalists and you know they want to promote luxury weapon and whatnot

[00:05:32] And like their advertisements says you know nation first and business second I think you know both of those views can stand together right But I will say this right. Maldives is one of the most popular destinations and to be Suspending those flights

[00:05:53] They are taking a hit obviously they're taking a hit on their top line in order for them to you know come with a stand for short Right, and I was one of those people who contributed to a 3,400 percent

[00:06:07] So just to luxury with it is still not as accessible I mean the options are still limited you still have to take a flight from Kochi or you know perhaps take a ferry and you know again These are given to the vagaries of the weather and whatnot right

[00:06:21] So it's not like luxury we can compete with a mojdives at this point of time But the direction is very very important right the fact that we're promoting this as a local tourist destination It is amazing think of the number of people who go to Maldives

[00:06:37] You know I can think of a couple of colleagues who have gone there you know in the last six months itself right some of them twice So you know it's definitely is the right thing to do and luxury people is beautiful

[00:06:50] You know if you look at those photographs and everything So Tata is investing in a couple of five star properties as well So yeah, let's see I mean maybe this year it becomes that tourist destination I mean God knows we've had enough of goa

[00:07:03] So we have another beach place to go to right aside from goa and goa and goa Good stuff, good stuff all around and yeah I mean fantastic work by the easement repair and the two sort of you know jump on this man wagon

[00:07:18] And you know promote luxury with so that's a very interesting point you bring about right But let's change perspective if it was not eased my trip, let's say it was Google

[00:07:28] Okay, that was you know trying to do something which would be of the interest to the United States and was using its You know tech powers to control the nations interest right there would be a large outry out there in the market

[00:07:42] So do you actually think it is right for a company to you know Kind of take actions which influence like this is kind of preventing customers or the end users from taking their lives End users from taking decisions

[00:07:54] See it's a trade off and at the end of the day a private company can choose to operate the weight once to within the legal Ambit offer certain country right I mean in this case easement repair has said that it will forego revenues on its moulded bookings

[00:08:08] Right and rather promote luxury with now again It's up to them right it's their platform and sub to them and and she don't forget I didn't mention a while back right 99 when the car gear wall have what happened

[00:08:20] I mean there were problems with our maps and dual locations and everything Right, so all of these private entities do adhere to some national interests at the end of the day

[00:08:30] Right and again, which is also the reason why we need to have indigenization. We need to have our own things Into end right now that's 100% not a practical solution Right, you will not have everything of your own and obviously you'll have to depend on countries and so on

[00:08:46] But you have to play geopolitical might where you can right now mouldy is a small island nation I mean sure, you know the back-up by China and the way you know global warming is Mollies may cease to exist in 30 of 40 years itself

[00:09:01] Now it is our fault as well that you know we have not You know kept up great relations in the past with them Right and we should definitely influence our neighbors positively I mean and we have been doing that right I mean whether Sri Lanka or Nepal

[00:09:17] We have been making a mens for you know what we've done in the past It's at the end of the day, I mean yeah, it's up to a private company to choose

[00:09:27] You know what it wants to do the way it operates within the you know legal framework of a country Well interestingly talking about neighbors, it is a yesterday came across this fact that there are no direct flights between Indian Pakistan You know that Yeah, I mean

[00:09:45] See again, this is something that you know few folks like harsh mother Susan for example right the economist and author I mean he keeps saying that you know at some point of time Pakistan for its own existence will have to trade within

[00:09:59] Yeah, you know it has to put aside all of this You know there's no decent word for saying it but all of those you know a rough behavior and all this terrorism and stuff

[00:10:11] It will have to put aside all of those things if it needs to sort of not self-implot Which is what is happening at this point of time? I mean I follow a couple of Pakistani podcasters And what's happening there is crazy

[00:10:25] The Pakistan you know the Karachi police did not have money for fuel, you know So there was this odd case where thieves are like robbing stuff and like running away and you know people are these guys are not able to chase them

[00:10:37] So well it's an implosion of sorts So yeah, I mean at whatever point they choose to like put aside all this nonsense and you know be civil We should trade with them and I don't know I mean let's see might happen in our lifetimes for sure. I think

[00:10:53] Oh interesting. All right moving on to the next topic leaked emails show Carter marketing the shares of startup clients even without their consent Cartys facing backlash after admitting that it misused sensitive client information to target

[00:11:07] Start-up linear investors on behalf of his private stock exchange business called Carter X CEO Henry Ward has said that it was an isolated incident involving a single employee who breached internal protocols However, emails and marketing materials sent by Carter viewed by business inside her

[00:11:24] Reads some doubts about the characterization The debate about Carter mixing its business of managing company ownership and brokering deals focus on sensitive data it holds This includes shareholder contact info share prices transaction details and others

[00:11:40] Carter X could use this information to find an appropriate possible sellers of startup shares which could lead to issues But Carter's biggest you know marketing messaging out there was the fact that it helps protect such sensitive information while also trying to earn

[00:11:56] Commission from deal-broking how do you think this is gonna play out for the company? See their entire business is supposed to be built on trust right? Captable information is extremely extremely sensitive right who owns what and at what price and so on right

[00:12:11] So if you're going to a company and saying that hey, you know, you can trust me with your captive Information you can't simultaneously have a brokerage or a you know private seconder is market out there That sells these assets right I mean you can't do both of those

[00:12:26] I mean even if you do you have to figure out a way to sufficiently insulate both these businesses And clearly they're haven't in fact I mean they've you know they've used this captive information almost You know as a business development Tool right

[00:12:41] Which is absolutely not done so you know all of this Frakas could have been avoided if you know Henry the CEO had come out in the open and said look this was one of instance We apologize You know categorically on this and you know it won't happen again

[00:12:57] But then I mean there was this whole face off between Cari of Linear who's the first person who brought up on Twitter and Henry right? I mean they went back and forth on Twitter threads and apparently they had a conversation and so on and so forth

[00:13:09] But that's a bad look basically right the CEO of Cari was scenes are of defending I mean thankfully you know Say no minds have prevailed. I think they've shut down that Marketplace business it wasn't contributing too much

[00:13:22] It was maybe contributing over three or four million dollars to their entire Revenue which is about 200 plus million dollars But it'll hurt the valuation for sure Right there's a For those who want like a concise summary of this do check out the fin shots

[00:13:37] Part cars on this right specifically where they explain everything about seven minutes But yeah, I mean we've had capital for example, right on the podcast and they they do something similar as well Jamat jump then through the you know free as well and and Jamat you know

[00:13:52] He's he's been pretty active. I mean we'll talk about him in the talk of the town But he jumped in and said that look if anyone's building a cap table solution. I'm I'm happy to fund it now

[00:14:03] You know, I mean everyone's doing a bit of chance paid on here and trying to think about how to get some of those 40 thousand customers that Cari has right but it's not a trivial thing you know moving those platforms obviously So yeah, let's let's

[00:14:19] Let's see what happens. Yeah, I mean this is like as you mentioned it car ties in the business of trust Imagine today like hypothetically right Let's say there's some media report out this saying you know one of the Let's say poultry

[00:14:33] Providers has been found with you know injecting poultry which is harmful chemicals or drugs Even if the company has cleaned out the mess how likely I had to order from them

[00:14:44] Yeah, it's gone. It's gone. Yeah. It's gone. It's like, you know being a little pregnant. There's no such thing right Interesting but It's the the whole thing right and you know, I think see this private and seconder is market

[00:15:01] Is a billion money many billion dollar market right in fact my friend joy is kind of solving this through the infinite club Start up that she just you know founded right a lot of this liquidity is locked up in each of

[00:15:18] And you know other shares and whatnot and You know they definitely needs to be a market for the second is right. I mean it shouldn't be as opaque as what it is right now And you know it'll be awesome if people are able to transact freely

[00:15:33] But let's see you know Just the other day I came to understand that you know private shares will also have be demoted so which means it'll go and sitting your brokerage account Right, so so You know that could be a potential You know

[00:15:48] Exchange as well. So yeah, let's see more news from the west US is seeing massive layoff rounds especially among tech giants like google amazon sales force X Google said is laying of hundreds of employees across multiple teams including fitbit co-founders james park and Eric feedman

[00:16:06] The company will lay off hundreds of people from its voice assistant unit While hundred rules are being eliminated in the hardware team responsible for pixel nest and fitbit as well Amazon will lay off several hundred employees in its streaming and studio operations it's at an internal note

[00:16:23] Last year more than 27,000 people will later from amazon XCoff which is the controlling entity for twitter has slashed off its global trust and safety staff by 30% Including an 80% reduction in the number of safety engineers also last week sales force has announced plans to live of 10%

[00:16:42] Of its employees and some and even close some of its offices now decent trend of hiding and laying off people kind of makes it show like these large tech companies are writing the stock market

[00:16:54] We've as soon as it shares a performing well after a big announcement they are hiding thousands of people As soon as she prices plummeted the letting go of you know large chunks of their workforce like what do you think is going on here?

[00:17:07] Yeah, that's certainly the case, you know I mean this very short sightedness is not that good You know you have a couple of good quarters you hire a bunch of people and then you have a bad quarter

[00:17:19] Let's say in Q4 for the US and you've let a bunch of people go I mean it's certainly be trust right as an employer and no amount of investing in pool tables and Employee retreats and what not will fix that kind of stuff right?

[00:17:35] I mean there's a certain reason why Apple is still one of the most hot after employers Because they haven't had a mass layoff since 97 in fact, right? Which is phenomenal think about it right I mean So 20 26 years So they will have to figure

[00:17:53] How to solve this and and I think look I mean I can quite sympathize also from their perspective that There is a lot of disruption they have to be disciplined This is not those hero interest rate era Right so everyone wants profitability from these companies

[00:18:09] So they have to run a tight ship as well as support their growth goals now this is something that I don't think people have been used to like really for about 10 years Right post 2010 Levinish

[00:18:22] People have not been used to it. I mean they will learn how to do that. I mean this I would say is like You know casualties in the interim I would say right so and and especially you know sass and cloud companies

[00:18:36] They've not known a truly bad time They've not known that you know you can say you know 21 22 when the market corrected was bad of course it was bad and you know what not but Look again right having been through a recession earlier

[00:18:53] Things can get really really bad right if you look at the stock market prices of some of these companies Have recovered fairly well, you know from number of 21 they've all recovered reasonably well You know so

[00:19:07] Something that people will have to figure out as a post but it's also interesting I mean specially for country like India because a large portion of the you know workforce

[00:19:16] Demography in the US constitutes of Indians right so all of this talent is going to you know most highly come back to the country and And we've been seeing this happen as this is the worst being brain-brain

[00:19:26] Happening over the past few years so I think there's also great time for us as a country to capitalize on these opportunities So obviously you know if things do get difficult there We definitely could attract these folks and we have opportunities as well

[00:19:41] You know we're gonna put out this episode of start-up operator on the road and I'll spoken to Anandhan who was one of those senior Folks at Intel Right he quit to Intel and came back here to start this thing called Start-up then Kasi an initiative to nurture and

[00:19:59] Mentor start-ups right I mean definitely you know we could use such folks For sure yeah So coming closer home Opeka has achieved its first close of 15 million dollars for its new fund Opeka is a SaaS fund and accelerated that supports early stage

[00:20:15] Indians start-ups to expand globally and they pioneered the concept of called value SaaS Right which is providing value to customers from day one and Focusing on profitability Opeka closer initial round of its 40 million dollar Opeka fund

[00:20:32] Seeker 15 million dollars in a funding round which is led by Westbridge capital This means Opeka is deepening its focus on AI and Indian start-ups that are building especially in the B2B software products for the world

[00:20:44] Opeka's managing partner personal Krishna moor thesis the funds USB is the referral program that it has built with established SaaS founders Now prior to Opeka in their really did not have a robust ecosystem and platform that focused on early stage startups Especially SaaS founders and

[00:21:04] Their fundraising also comes at a time when you know we're seeing the hardship fees best start-ups to raise funds But The launch of a new fund is signaling that investors are actually hungry for quality startups to invest in So what do you think?

[00:21:18] This is awesome so Prasana and Rajan have both been on the podcast Earlier right do check out those episodes to find out more about you know value SaaS and Opeka You know I'm reminded of Microsoft Acculator, you know

[00:21:34] One more part of the accelerator a bunch of SaaS companies as well That was the closest equivalent to a SaaS accelerator slash incubator that we had for a long time You know so Opeka has done phenomenal work

[00:21:48] Over the last four five years. I would say in sort of pioneering this value SaaS Concept right which is to say that don't increase your valuation rather get to a point where you know your revenues justify that

[00:22:01] And you don't you don't have to like you know go gangbusters and like you know Spend a bunch of money to grow you can grow you know very capital efficient way Right this also retains more optionality for the founders

[00:22:14] To take their business in the direction that they want to right So oftentimes there is a dichotomy of you know Very with a bootstrap or funding I think Opeka sort of saying you know there's a certain middle path I mean you don't have to

[00:22:30] skew overly towards one path or the other So good man. I mean anything that you know comes in at the early stage increases the probability of success Reduce is mortality of startups at that stage is always a plus one for the ecosystem and especially something like SaaS right

[00:22:48] Where there is a certain success template there are playbooks there are benchmarks And it can be Driven by those benchmarks right so Mentorship at that level is is really really helpful. So

[00:23:03] Cuda to them and all the best and yeah, hopefully Wednesday we'll be meeting the Opeka gang at their social So we'll have plenty of questions for them Before we move on to the talk of the town section here are the most notable fundeezes of the week

[00:23:20] Well interestingly the second week of January turned out to be a positive one for the Indian startup ecosystem with venture funding crossing 100 million dollar mark Notable startups include health care company cure bay that raised 62 crores or 7.5 million dollars from Elever equity and existing investors

[00:23:38] FinTech startup salary say reached 5.25 million dollars from peak 15 surge and Provega ventures And B2B startup car Khanad.io that's in the manufacturing space raised around 6.3 million dollars from our conventions and vertex ventures and others So definitely we're seeing

[00:23:56] I mean I won't say we're building momentum but it is this has been a good week for fundeezes. Yeah interesting So for the talk of the town section where you mentioned Chamath posting on Twitter I'm starting an incubator funded entirely by me. It's called 1890

[00:24:10] Tell us what enterprise software you use and my team and I will build you an 80% feature complete version at a 90% discount Well of course you'll be wondering how he says we're using AI and offshore into make this happen

[00:24:23] So it looks like you already seeing the AI revolution like execute on them. No, it's good. It's definitely good Anything that makes for a cheaper software is a net positive even if in the inter-imperated cost is a lot of You know hard burn

[00:24:40] But I mean it's good directionally it's good, but I don't know if you know First of all 80% feature complete is good enough for large enterprises You know because having been in the large enterprise software game. I do know that the last mile really really matters for them

[00:24:56] Right you can't sell off the shelf products to these folks the 90% discount is a good carrot I would say again we'll have to figure right I mean okay is AI so good that it can ship Production ready code. I'm not sure at this point of time, right?

[00:25:10] So yes Like I said directionally it will get there someday when you know AI is so efficient that it can ship code that will make any software possible

[00:25:21] But are we there right now? Maybe not for the next four of I years in my opinion and see a lot of software People kind of ignore the amount of domain knowledge that you need the amount of back and forth the amount of

[00:25:37] People interface that exists right because ultimately you know software is used by people and People can be random you can't put people in a process unfortunately So directionally yes, maybe we'll get to a point at some point of time where AI gets super efficient

[00:25:54] And with offshoring you can bring down these costs and certainly I do feel that some of these You know software as service tools are like massively inflated god knows I think you know all of your articles and SAPs and

[00:26:06] Sales forces and whatnot could do with a little bit of competition to sort of ease off on the pricing Heck we use some of these tools ourselves and I'd love to pay less for some of these So it's all positive I would say but not not anytime soon

[00:26:23] Well, there's only one way to find out that's to it. That's it. I folks So that's it for the 159th episode of the weekly roundup. We hope you enjoyed this discussion and had some interesting takeaways for yourself

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