Getting funded: 8 tips from startup founders

To take off and grow, all startups need a constant flow of funds. However, angel investors and seed funding agencies check several aspects of new ventures before betting on them.

Techgig.com spoke to three successful startup founders to understand what it takes to draw in money for their company.
Ashish Goel, founder and CEO, Urban Ladder, an online furniture and home décor company

1. Consumer comes first “We have consistently been consumer-focused. It is also our primary focus in all our investor communications,” says Goel whose startup just raised $50 million in a new round of funding. 

“This way, the investor is clearly able to see that all the decisions are based on consumer satisfaction as opposed to ‘it's good for business’ and that helps."

2. Long-term planningA constant focus on the big picture and being vocal about it is the next key aspect, Goel says. 

“We know our objective is to build a really big and high-quality business over the next 8-10 years. Thus the minimum horizon for any decision is three-five years into the future and the investor community clearly appreciates this,” he says.

Vamsi Krishna, founder and CEO, Vedantu, an online tutorial platform  

3. A good team and working relationship
Investors look for a good team to put their faith in, says Krishna.“Investors check prior experience of the team members, what is their educational background and if have they worked together before.” In today’s scenario, this may be college buddies who come together to launch a startup or people who have worked together for some time, he says. 

4. Razor-sharp focus on business
Founders often become crazy about valuation, says Krishna. Alternately, he suggests greater focus on creating the company and product and growing it.

“Don't waste too much time on fundraising. It's an intensive exercise -- you're either in that mode or not. At least one of the founders should be completely dedicated to fundraising when it's on. Keep on networking, pitch, and do a couple more rounds and close," Krishna says. 

“It is important to be really clear about what you will do with the funds in the next year and a half. This creates confidence among prospective investors."

Prateek Panda, cofounder and CMO, Appknox, a firm that helps developers and enterprises fix security loopholes

5. Quality service to consumer and hiring processes adopted
“The majority of our pitches covered these two aspects and it is these two aspects that have been vital to our success,” says Panda. 

“Making money came later. The idea is to address the hiring process, which in turn helps ensure quality service to your customers, thereby creating a natural connect.”

6. Realistic market value
Today, every startup wants to valuate itself in billions of dollars. “This is a big mistake,” says Panda. “It is smarter to have conservative numbers and if it leads to billions, then it’s great.”

 Source:TechGig/knowledge

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Net neutrality: Government to make its stand public soon

The government, after verbally backing the concept of net neutrality for some months, is all set to put it in writing. It is likely to make public this week the telecom department's report on the subject, which sources say will back the Centre's stance that the internet should be completely free with equitable access and without any obstruction or prioritization.

The Department of Telecom report - prepared by a team of six officials - is currently with the Prime Minister's Office (PMO), and will form framework for the government policy on 'net neutrality' along with recommendations of the telecom regulator, which are yet to be submitted to DoT. The principle of net neutrality guarantees consumers equal and non-discriminatory access to all data, apps and services on internet, with no discrimination on the basis of tariffs or speed.

"A panel has the taken the views of all the stakeholders before submitting it to the telecom minister. There were a few critical points of debate such as allowing zero rating plans or not. The report will back the government's stand unequivocally," a person familiar with the matter said.

READ ALSO: Netizens exult in people power

While the government has made its stand in favour of neutrality of the internet amply clear, industry experts and civil society groups say that the fine print of the policy will be critical for implementation.

"A policy supporting net neutrality in the Indian context must block any preferential treatment to any content. This is so because India is a country where all connectivity is slow. Hence, speed matters less than cost in a price sensitive country like ours," Nikhil Pahwa, the founder of online news portal Medianama and one of the prime movers behind the campaign for net neutrality.

Last week, US telecom regulator, the Federal Communications Commission, slapped a $100-million fine on AT&T alleging the telecom giant was intentionally slowing down internet speeds to its unlimited data subscribers after they consumed a certain amount of data. This the commission said amounted to a lack of transparency on the company's part. Earlier this year, the FCC, prodded by US president Barack Obama, embraced net neutrality.

Some say the government should either clearly bar a telecom operator from creating or owning content or it must put regulations in place which strictly forbid the telecom operator from throttling or slowing down the content of other providers.

"There could be a blanket ban. Or, instead of just a blanket ban on operators owning content, the government should ensure no content is throttled. The purpose will be defeated even if telecom service providers enter into agreements with other content providers and give certain content preference over the rest," Prasanth Sugathan, Counsel at Software Freedom Law Center, told ET.

The DoT report will be made public even as the Telecom Regulatory Authority of India (Trai), after finishing a consultation process, is preparing its own report. The consultation, and launch of Airtel's Airtel Zero plan — under which certain apps can be accessed by users free of charge, with the app makers paying telco for users' access — caused a furore, especially on social media.

Click here for complete coverage on net neutrality

Bharti Airtel's plan is what is known as zero rating plan when the content provider pays the telco for providing free access to users. Critics say such a plan gives a clear advantage to bigger content providers who can afford to pay, against those who cannot.

"In case a Flipkart app or browsing becomes free whereas a small startup is unavailable to make its app or website free because it cannot pay the telecom operator like a Flipkart. It will kill the small person's business," explained Pahwa. "Hence prevention of a 'carriage fee' in internet access which could be charged for zero rating or increasing or lowering speeds is a critical issue."

Trai and Airtel's plan faced a severe backlash from netizens who overwhelmingly expressed support for maintaining neutrality of internet. The regulator in fact received over 10 lakh responses supporting a free internet in a month, the highest ever it has received on any consultation paper.

Meanwhile, telecom department officials say the government could disallow the controversial 'zero rating' plans in its final policy on net neutrality. However, it could make an exemption for delivery of essential government services such as education and health on a preferential basis.

Telecom operators such as Bharti Airtel, Vodafone and Idea complain growth of apps, especially the ones providing communication services such as Whatsapp and Skype, have been eating into their messaging revenues and now have the potential to hurt their voice revenues, which makes up over 80% of their business.

READ ALSO: What is net neutrality and why it is important?

Most telcos said that since the apps offer the same voice services as they do, they must be brought under similar rules, which involve payment of licence fees and meet roll out obligations.

Jio, the 4G mobile service from the Mukesh Ambani-run Reliance due to launched later this year, has on its part called for a regulatory framework for voice and messaging apps which will ensure that the likes of WhatsApp comply with all security guidelines that mobile phone operators need to follow, while supporting key proposals of rivals like Airtel, Vodafone and Idea.

Supporters of net neutrality though say any move to regulate content providers will stifle innovation. They add that the security rules proposal indirectly seeks to burden innovative application providers by increasing cost of providing services.

"Do you really want the government to decide which app should be allowed to offer services in the country? Do you think Whatsapp could have grown in this country if it had to take permission from the Indian government?" Pahwa asks.

Source:The Times Of  India

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Why security determines success in the Internet of Things

As with any new invention, hype and expectation can overshadow practicalities. The Internet of Things (IoT) will be one of the most transformative technological trends to impact global society, perhaps since the invention of the World Wide Web. But there is a less sexy element that will underpin its success. Security.

To give some impression of the scale, 6.5 billion objects are expected to be connected to the Internet and cooperate partially without human intervention by 2015 (Stefan Ferber, Bosch Software Innovations).

The Internet of Things will undoubtedly impact every area of global affairs. As objects, data, systems and people enter into this global interconnected web, business models, communication, politics, security threats and even doing something as simple as boiling the kettle will change forever. If history has taught us anything, it is that with technological change come new security vulnerabilities. Individuals must be proactive not reactive when it comes to protecting their data.

Unfortunately there is no crystal ball. There is no way of knowing what devices we’ll be using, what our workplaces will look like, how we will get to work, the list is endless. As a result, security of information must occur at a network level and be device agnostic. Most importantly, data protection mustn’t be dismissed as unimportant or worthless. Much like in the story of the ugly duckling, those that underestimate it are soon proved wrong.

With work and other technologies mingling, fundamental methods of communication like email are likely to change. From a security perspective, change opens new and unfamiliar vulnerabilities for cyber criminals to exploit. Therefore, businesses must ensure encryption is an integral component of how information is shared. Equally, the processes have to be user-friendly, device agnostic and at a network-level if they are to succeed.

Companies need a solution that is focused solely on email security if that is the main form of communication. Gmail alone has more 900 million users. Both Facebook and Microsoft have introduced an open PGP approach. Google apps is following suit. As email threats get greater, it’s prudent to have a solution in place to handle and protect sensitive information. The businesses that wise-up the fastest and responsibly protect against the threats that lurk in our Internet-powered world will reap the benefits. Those that judge the Internet of Things on face value will sooner or later realise their mistake to the detriment of their business.

The beauty of cloud based message encryption is that it truly doesn’t matter what device you use to send the email; it is protected. Imagine sending an encrypted email from a toaster  – and it being secure! Effective security will, without a doubt, enable any business welcome the benefits and opportunities of the Internet of Things, not the challenges.

The Internet of Things is a game-changer. Whether it is a blessing or a curse will be entirely determined by the participant’s understanding and commitment to data security. Like the story of the “ugly” duckling, observers must not see security protocols as worthless and disregard them, given time, they will become invaluable and the most important investment of all.

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Net neutrality rules go into effect in US

NEW YORK: New rules that treat the internet like a public utility and prohibit blocking, slowing and creating paid fast lanes for online traffic took effect on Friday.

Cable and telecom industry groups have sued to have the rules thrown out, arguing they are too onerous. But on Thursday, a federal appeals court declined to block the rules from taking effect as the industry litigation against them proceeds. A court could still eventually overturn the rules.

There will be no immediate effect on how consumers and companies use the internet. Broadband providers today typically treat content from different websites and services equally.

"We had the internet for some time obeying such principles but they've never been codified. Now they have been codified,'' said Nicholas Economides, a professor at New York University's Stern business school and an expert on networks and telecommunications. "Consumers should not see any substantial difference.''

Regulators, consumer advocates and internet companies like video site Vimeo and crafts marketplace Etsy had concerns about internet providers' power over web traffic. For example, there were worries that being able to pay for a special internet fast lane would let richer companies more easily reach users and stifle the growth of newer, poorer startups.

What is new: The Federal Communications Commission (FCC) will be able to investigate complaints about "unreasonable" business practices by internet providers that aren't explicitly banned. Many broadband companies say this invites uncertainty -- they don't know what's allowed.

Here's a look at what the developments mean for consumers and companies:

What is net neutrality, and what are the new US rules?

Net neutrality is the principle that internet providers treat all web traffic equally, and it's how the internet works today.

The FCC enacted rules that protect that, to make sure cable and phone companies don't manipulate traffic: They can't create special fast lanes for some content, like video from YouTube, or intentionally block or slow Web traffic. Many Internet providers say they don't plan to do those things, but the FCC worried that they could.
What's changing for consumers?

In enacting its rules, the FCC placed internet service in the same regulatory camp as telephone service. That means providers have to act in the "public interest" when supplying internet service and refrain from "unjust or unreasonable" business practices.

The FCC can investigate complaints about industry practices that might violate net-neutrality principles, even if they're not specifically prohibited by the rules.

What about for companies?

Internet companies Netflix and companies that manage internet traffic, like Cogent, can also complain to the FCC about "unreasonable'' behavior by broadband providers over network-connection deals in the backbone of the internet.

Companies could complain that broadband providers are charging them too much to connect to their networks, for example.

Fights over these arrangements had in the past led to a slowdown in Netflix streaming speeds for customers of several major internet service providers.

Which companies are affected?

Cable companies like Comcast, phone companies that provide internet service to people's homes and smartphones, like AT&T and Verizon, and cellphone companies like Sprint.
Why is the industry opposed?
Companies say they don't want the stricter regulation that comes with the net neutrality rules. They say the regulations will undermine investment in broadband, and that it's not clear what is and isn't allowed under the greater authority the FCC has to investigate unspecified complaints.

They are also concerned about price regulation. The FCC says it won't pre-approve the prices companies set for internet access. But consumers can complain about the cost of their service and the government can look into it under the new rules.

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Net Neutrality: Zero ads vs. Zero plans, what do you prefer?

                       In late ‘90s and ‘00s most  ‘dot-coms’ lacked a revenue model (past an IPO). But they were making a lot of money for cable/phone companies. People around the world were signing up for internet connections to consume all that ‘free’ online content. And as long as they made the lion’s share of internet industry profits, internet service providers (ISPs) were happy to support idealistic notions like net-neutrality; the idea that all data on the internet is treated equally. For a while, ISPs actually went along with the radical notion that consumers not ISPs should determine what consumers should see.

                      Today cable/phone companies have a serious case of Silicon Valley envy. ISPs continue to make increasing amounts from internet subscriptions. For example Comcast made $3B in Q1 ‘15, +15% YoY selling internet connections. But Google made almost $18B. And Facebook’s $3B is growing at 46% YoY. And it is not just ads. Netflix makes over $1B a quarter. Skype’s revenues are in the billions and investors dream of a time when WhatsApp’s billion subscribers start paying that $1 a year. And if these ‘dot-coms’ are going to make billions over the internet,  in true Godfather fashion, the ISP’s want ‘their taste’.

                  The latest attempt is a proposal by European mobile operators to block most advertising on their networks. The plan is to install ad-blocking software at the network level, so web pages are displayed without ‘ads’ (social network feeds are unaffected) . According to the Financial Times, a mobile operator executive was open about this being a move aimed at internet ad publishers most notably Google. Blocking ads ‘just for an hour or day’ he reasoned, would bring Google to the the negotiating table to share some of its annual $60B revenue pie with the service providers.

                  In the ISP view of the world, the internet service is a two-sided market. When consumers pay their internet bill, they buy access to the ISP’s servers but not access to content. ISPs would then like to turn around and also charge internet publishers for access to the ISP’s servers so that publishers can reach the consumers with their content.

                 Common-sense will tell you that the ISP view is a pile of BS. Consumers pay for access to content not servers. ISPs charging publishers for access to consumers is barefaced double-dipping. And this double dipping is especially galling when the same ISPs are delivering internet service at about 10% of the speed consumers are already paying for.

               Yet it was this two-sided market  logic that allowed Comcast to extract tolls from Netflix. Comcast first restricted Netflix’s access to Comcast customers by ‘throttling’ download speeds. Speeds were restored when Netflix agreed to pay for direct connections to Comcast servers, i.e. access to Comcast customers. Similarly the European ISPs would like the Googles and FBs of the world to pay a toll to be allowed to show ads to the ISP’s users.

             Ab-blocking is in itself an interesting ethical question. Much of the content on the internet is free because it can be monetized through ads. An ad-blocking consumer is ‘free-riding’ by consuming the content but actively preventing compensation to creator. On the other hand, the rampant proliferation of pop-ups, toolbars and ad-injectors mean that consumers are forced to use an ad blocker to prevent abusive ads.

                However ISPs are not even  bothering to dress up their proposal as an effort at consumer protection. They have been vocal in their frustration with internet publishers and make little pretense that publishers can avoid ad-blocks for a fee. It is an open ‘stick-up’ on the internet superhighway. And no net-neutrality laws currently prohibit such actions in most of Europe.

                   India had its own introduction to the net-neutrality debate after a telecom lobbyist inspired paper by TRAI. However in India, the discussion centered not around blocking of content, but around ‘zero-rating’ schemes that allowed internet publishers to pay ISPs for data charges incurred by the publisher’s users. While both zero-rating and ad-blocking are both net-neutrality violations, they serve to illustrate that all violations are not equal.

                 In a zero-rating scheme, no content is blocked and like they do today, consumers continue to have the ability to consume any content that they choose and can afford. In schemes like ad-blocking or speed throttling ISPs effectively censor non toll paying publishers, separating them from consumers. Zero-rating incentivizes ISPs to expand services to areas where people cannot afford internet service because now publishers are paying the internet bill. Blocking simply allows ISPs to charge publishers to show ads/content to consumers while offering no consumer benefit. Under zero-rating, while ISPs are getting paid, there is also a consumer benefit of data charges subsidized by publishers. But in the face of protests across Twitter zero-rating now seems a non-starter in India. In contrast in USA, despite new net neutrality rules by the FCC,  ISPs can continue to charge publishers for direct connections to prevent throttling

                  Truth is that perfect net-neutrality, the complete separation of publishers and service providers is a fantasy. Google is trying to become both an ISP (Fiber) and mobile operator (Project Fi). Verizon, the US’s biggest mobile operator just bought AOL as an entry into the online ad business. Facebook’s internet.org is a big driver of getting Africa connected. Separating two industries as closely linked as internet service and internet publishing is unrealistic.

            When consumers stand up for net-neutrality, we are usually standing against censorship by ISPs and for consumer choice. But unconditional support for net-neutrality leads us to ignore the nuances and  ignoring nuances means that we overreach and open the possibility of regulatory ‘backdoors’. An example are the recent new regulations by the FCC that mandate a  ‘neutral net’ but ignore the question of ISPs charging for direct connections. Turning to protection through legislation is tricky as no one wants to selectively block content as much as governments.

               We might be better of  with reasonable compromises like zero-rating that offer some consumer benefit in return for ISPs increasing their margins. Outright censorship and blocking of content should continue to be bright lines that neither publishers nor service providers should be able to cross. And regulators will be crucial in guarding that line. But in a still fluid industry like the internet, a light touch is called for as new business models emerge all the time. In an evolving industry, the market is probably a better regulator than the government.

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