PiQube Story Is Typical of a Product Startup Struggling, But The News Minute Did a Shallow Coverage
This story appearing in The News Minute amidst a brewing conflict reflects the poor state of journalism regarding startups. Reporting facts is another matter. But understanding the story behind the startup takes that much of an extra effort. As a contributing writer to YourStory, I only can understand PiQube as a struggling product startup.
Basically, startups are services based or develop products. Service startups don’t face much of a cash problem as they typically get paid for their services. Typical big organizations in services in India are TCS, CTS and Infosys. Global product companies are Google, Microsoft and Apple, to put it simply.
Product startups go through multiple stages before they can really see cash in the bank. Some successful product entrepreneurs have perfected the model of services funding the product. Here the startup offers services and out of the cash generated from it, product development is undertaken.
From ideation to development of the product, startups need multiple resources, financial, human and otherwise. Developing a product takes effort, money, brains. How a product is developed itself is a big learning experience. Once a product is developed, the story doesn’t end there. The ultimate aim of a product is to find paying customers. Typically product startups at times work on a freemium model with the aim of acquiring customers. If you want to understand freemium model, you just think what Jio did. It offered its services free for a period of time before starting to charge its customers. And all free customers don’t start paying. The conversion rate is often poor, and a 10% conversion is considered very good. And sometimes there is a product with multiple versions — free version, priced version with added features, highly priced version with more features. Customers choose between these three. And if you see, free customers make up even 90% of the customer base. Why should a startup offer its product for free? Primarily, free customers help in developing the product by providing feedback. And it is the wish of the startup that slowly the free customer will move to become a paying customer.
Where does the product startup find money to develop its product? First, it starts with FFF (friends, family, fools) putting in money, with generous helping from the founder’s savings. If the startup reaches a stage where its product is in decent shape to court customers, it begins to acquire customers. Some of them may be paying customers. The startup will not be able to sustain itself on just those paying customers. It should be understood that Zoho didn’t get any funding because its products paid for its operations and profit. It is often romanticized as bootstrapped but bootstrapping is hard, very hard, unless you have someone like Zoho to whom customers pay in millions.
Also when the product is able to find customers, to fine-tune the product, the startup needs money. Here is when investors come in. If they are willing to bet on the product to do well, they put in money. At this stage, if funding is obtained, the startup starts going aggressive on product development, which is what PiQube did. And it also starts recruiting more people, sometimes at premium salaries just to get the product in shape.
The product startup is lucky if it gets rounds after rounds of funding (e.g. Freshdesk) to sustain operations and for product development. What happened with PiQube is its funding stopped at its first stage and it’s trying to raise its next round.
Unluckily what has happened is that second round of funding is yet to be realized. Now it should have paying customers for whom the product should be up and running and it has to pay salaries to employees. In good sense, Jayadev apprised his employees of the situation and going by the The News Minute story, those who didn’t want to stay have quit. Others have stayed on, believing in the product and the founder. This is the typical story of a product startup. Passion overrules everything else. If you saw how MakeMyTrip survived its initial years, with six employees taking no salary for two years, PiQube’s case is no different. Now The News Minute has picked up the story at the stage when PiQube is going through hell and talked to disgruntled employees. If such reporting were to happen, many startups I bet will have to run for cover. And entrepreneurs will be forced to abandon their dreams.
There is no empathetic tone to the founder who has skills and ability to land up in an executive job with a plush salary. Why should he be struggling with developing a product and fighting this battle? I have found many entrepreneurs crazy, plain crazy. They are not willing to give up. Many believe they are changing the world. That’s how startups work. Finding a very grounded and level-headed entrepreneur is rare. There should be some amount of reality distortion field in the entrepreneur’s thinking who is trying to make the impossible possible. If the story would have gone deep on Jayadev’s efforts and his product, and the marquee customers he acquired, it would have a lot of justice to the struggling entrepreneur’s story.
Every entrepreneur in some way is a crackpot. No person in right and level-headed sense would ever imagine running a startup. And focusing on some negative personal traits, without proper verification, would do more damage to the entrepreneur’s reputation. There should be a balance between the entrepreneur’s efforts and his failings. This story fails to put even one word about the three-year journey of PiQube and its high moments. It has only captured the slide in the fortunes and by good luck, PiQube could revive itself to roar again. If the startup has 60 plus employees today, it’s not such a simple feat.
That’s where this journalism that talks about a startup fails. Reporting on startups needs to give adequate space and mind to the entrepreneur who is trying to build something new. Given a chance, all other employees would find another job. And they could be successful. Think of an entrepreneur. Failure is a hard knock on dreams and many entrepreneurs I know have fought depression and plain hard times to revive themselves again. If we need to celebrate entrepreneurship and give credit to the efforts of an engineering graduate who was bold enough to start up, instead of finding a coding job and traveling onshore, which was the typical case at least a decade ago, why not put one word of appreciation for that? Why should the entrepreneur who is staying there and fighting his battle projected as a villain of employees’ future and welfare despite his well-intentioned efforts to keep them in good humor? Everyone has low moments and highlighting them is easy. This entrepreneur has not run away from challenges. He is fighting for his survival and his future. And some employees and his investors believe they can bet on him. If you can’t encourage him and wish him good luck, don’t discourage him by giving him such stories. This is my appeal.