Interview with Dijam Panigrahi, COO, Gridraster

Dijam Panigrahi, COO, Gridraster

“Passionate and excited about how technology is challenging norms and changing the way we interact and engage with the world around us. Particularly excited about the convergence of mobile technology, cloud computing and AI.”

What does Gridraster bring to the marketplace?

We observed, and we strongly believe, that augmented reality and virtual reality will change the way we interact or work and live in the long run. But we also had a strong feeling that if all those things were to be possible, they have to be made possible on a mobile device. On Oculus and other heavy devices, not all those experiences are possible.

As part of our team’s previous functions in Qualcomm, Broadcom, Texas Instruments, and Apple, we have worked on mobile, the network, and the cloud. We have seen a few technologies merging. For example, data pipes are becoming thicker, and you can do more using the network. The cloud computing thesis is falling into place with the virtualization of GPU’s. We saw that you cannot do this sort of intensive experience on the mobile device, but mobile is the only way that we can actually make this use case of this medium mainstream.

What we can do is leverage the cloud infrastructure, which is available to act as a co-processor to the mobile device, and be able to enable any kind of complex intense immersive experience at scale, not just trying to confine it to a single device or two. Essentially, what we bring to this industry is the software stack to allow any content provider to enable those experiences on any of the devices over the network so you don't need those heavy devices anymore. You can use the software stack that we are building to make the experience possible across different devices.

Can you tell me a little bit of your background and the team’s background before starting Gridraster?

We started the company back in 2015. Before that, in all of our fourteen to fifteen years of experience, we worked on the next generation of network-based products, whether it's the first dual processors for the smartphones or the 3G and 4G networks. We have built those products and taken them to different markets, international markets and scaled the revenues from zero to multimillion dollar sizes.

So I bring mostly product and business development expertise. Rishi Ranjan is the technical brain. He was a system designer within Qualcomm and Broadcom, working on the product for five or six years ahead of when they came into the market. Venkat Dass brings expertise in delivering to the customer. As part of Broadcom, he was the person who was applying 4G, 3G, and LTE into the networks for Samsung and Apple. He led our engineering effort. 

Recently Bhaskar Banerjee, somebody we knew over the years, joined us from the Apple team, where he was working on the immersive display technologies there. Now he takes over the CTO role. 

How does your experience in business development and product management help as Chief Operating Officer? Could you talk a little bit about your experience more on the BD side versus your co-founders experience on the technical side and how you are able to bring that together?

What we're doing is deeply technical, and we have multiple patents that have been filed, a couple of which have already been approved. We weren’t trying to do a research project, but rather make something commercially viable. That’s why we wanted to have multiple people come together.

When we started out it was Rishi and I who were both outward facing. We both had the technology base but we wanted to commercialize it. Before we conceptualized it, we actually spoke to at least fifty customers, trying to understand their pain point. I was trying to understand how it was going to be used, what business problem we were going to solve, what value it was going to bring, and how we can take this technology and productize it. Rishi was focusing on how you map that out from the technical requirement and from the systems requirement so that the engineering team, at that point led by Venkat, could implement it and come up with viable product that we can show to customers in our target audience.

We continued to iterate and evolve our roles. We started developing the product and we raised some funding and strengthened our team. Rishi focused more on the fundraising and top leadership and Venkat focused more on ensuring successful deployment with customers.

There are a lot of specific applications to aerospace and industrial industries. Can you go into detail on those applications and give a few examples?

Those use cases were developed from the conversations that we were having. The first part of the process for us was: okay, we have this awesome technology, how do we leverage this? 

We needed more data points that in a certain industry, there is a problem they're facing that we can solve. When we went out to the market and spoke to the customers in aerospace and defense, we talked a lot about value for price. For example, the HoloLens costs anywhere between  $3,000-$5,000. That's going to be pretty expensive if you’re looking at medical, education, or any other industry. But the amount that the aerospace customer or automotive customer or any of the manufacturing companies were actually spending on a device like Hololens was humongous.

For an aerospace customers that we're working with today, one use case is the manufacturing process where they're building out the spacecraft. What they're doing is aligning the virtual CAD models, which are pretty heavy and complex, onto the physical assets. When you're overlaying those virtual assets on top of the physical spacecraft that you're building, you're identifying spots where it needs to be put. If you can get those accurate overlays done using our technology, the cloud infrastructure, which you can do to almost a millimeter precision, you are able to save big by cutting down the time required to do the job and eliminating errors. 

Another use case is engineering design. One of the automotive companies has been designing cars using the clay or foam model. The problem is, any changes that you want to make to the design takes weeks and months. Now they're replacing the clay or foam modeling with the mixed reality pieces where you could overlay those virtual assets very precisely on the physical assets . This they can do now in near real time instead of waiting for weeks or months.

What was the most valuable thing you learned from Alchemist?

Learning to stick to the process and believe that the outcomes will come. If we focus on the outcomes too much and we don't focus on the process, we won’t have a scalable design. That's the thing that I found very valuable that we got from Alchemist, whether in the fundraising process or the building process.

If you were in Alchemist again, would you do anything differently?

I would get my co-founders to be much more immersed in the program instead of it being mainly me.

From my side, I think many of the processes, like for example creating a customer advisory board, we created over a time period, but we could have done it much more quickly. If you look back it looks pretty crystal clear but in retrospect there are many things I would have done differently. The two things I will say is that I would have put up those processes much earlier and I would have gotten my partners to be more involved in the Alchemist program.

What is the most challenging thing going forward?

Exploring product market fit. I know that our technology is going to be applicable across different domains and different industries, but we have to navigate that over a time period. Considering the team that we have, we can only focus on maybe a couple of use cases and a couple of industries. Based on all the data points that were available to us and customer conversations we had, we decided that aerospace, defense, and automotive will be our focus in the short term.

What entrepreneurial lesson takes the longest to learn, or are you still learning?

As an entrepreneur you're learning every day, such as, for example, building up the team. I’ve learned the value of letting go of certain roles. Maybe you at this point are the best person to do certain things, but maybe it's a good time to let go of a few of the things because it frees you up to focus on some things that are more important that others cannot do.

For example, my co-founder is the best in terms of technical skills, but as a CEO you know he has much more things to do now. But if he continues to get into the technical chops, he may not be able to do the CEO role effectively. 

Beyond that, from a sales point of view, everything takes longer than what you expect. 

Do you have any insights that you want to share to the next generation of Alchemist founders?

Bring the right team. Before you even build any of the product, validate with the customers or the users who are going to use it. I'm sure that's been said so many times, but when you are technical founders, you are so convinced of the technology that you lose sight of viability.

Apart from that, you are trying to build a business, not building a company to raise money. Sometimes that part of the process gets mixed up,as if you're just trying to raise another round. Right from the beginning I think you should be focusing on building out a company which can sustain itself. The capital should be able to accelerate that growth but should not be the end goal.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

Vinod Khosla: VC Discounting

Vinod Khosla is the founder of Khosla Ventures, a Silicon Valley venture capital firm. His firm invests in experimental technologies such as biomedicine and robotics. Khosla co-founded computer hardware firm Sun Microsystems in 1982 with Andy Bechtolsheim, Bill Joy and Scott McNealy. He spent 18 years at venture capital firm Kleiner Perkins Caufield & Byers (now called Kleiner Perkins) before launching his own fund.

Would you say that you’re a venture capitalist?

You’ll never find me saying that we’re venture capitalists. If you look at the tagline on our website, in fact, probably since the 80s, I’ve never called myself a venture capitalist, I always say, I’m a venture assistant. That's what the tagline on our website says, since the day we started, because our focus is in trying to help with these kinds of issues, and the funding is incidental. 

We’re trying to figure out how much we are expected to discount from the listed price. What was your experience at Sun with this? Have you seen your Portfolio companies go through some of this?

Sun was a long time ago, a very different place. But there are a few lessons from there. One lesson I haven’t mentioned, people always asked me how to maximize market. I had this discussion today with a couple of them. I said, don't worry about marketing, what you want is to get the customer to love you, because most of the money you'll get from them will come later in other negotiation. So the first negotiation is, you get in the door and they become dependent on you, love your technology. Even zero margin businesses are fine initially, if it reduces your cost of sales.

So if making it attractive reduces the sales cycle from six or nine months to three months, do it every time, because you engage faster. You learn faster, what you think is a complete product is almost certainly very incomplete. The customer says, can you do that, can you do this. You’ve seen this. You want that learning to get incorporated into your product as quickly as possible. So that three or six-months delay in selling because you're trying to keep up your price point is worse than just losing the margin. You are also learning to create a better product faster. 

So get that first product refined in use, and you will hear this repeatedly, I’m a total experimentalist. You can't do a business plan, you can discover a business plan. You can’t define a product, you can discover product requirements by interacting and engaging. So I’m a total experimentalist on all these things. People have a tendency, especially when they don't know an area and entrepreneurs generally don't know the areas they're going after, to rely on experts.

I have watched a lot of my peers’ pitches. All the pitches seem like there's a prisoner's dilemma going on. They all get exaggerated to the point that they’re near uniform, and the VCs discount them all again, and there's no signal happening, where everyone says, we have an amazing team and a huge market and this enormous promise of traction. What concrete things do you do to try to get a signal out of that noise?

Especially at the seed stage, there's a lot that's not knowable, as I was saying earlier. What's most important to us is not the plan, but the quality of the thinking behind the plan, and judging because you can tell from the quality of thinking, how people approach a problem. When we ask for an answer, we're not looking for an answer, we're looking at how somebody thinks about the question. At least that's what I did. If somebody is trying to, you can have a big number. If you go to YC day, if you’re talking about hair salons, it's 10s of billions of dollars. If you’re talking about shoelaces, it's exactly the same number. So those numbers aren't really the issue. 

One of the things you realize if you've been in the venture business long enough, is that very few companies end up executing on their plans. Their plans three years later look very different. So you're looking at how people think, how do they respond to things they don't know, do they pretend they know, or, are they actually much better able to admit what they don't know, and how fast do they learn. Sometimes we talk to companies for a long time, it can be two months. We'll see what their learning is in those two months. 

When we talk to YCombinator or Alchemist Accelerator about, over the two months or three months, we look at how much has somebody changed. That’s maybe at the seed stage, the most important question I look for, because it tells me how fast they’ll keep learning in the next two years or three years. I'd rather have an athlete than somebody who knows the domain. 

Somebody may not be a great, wide receiver, to those of you who are football fans, but they had great zero to 40 times, they learn to be a wide receiver. It takes them six months longer. But over the course of five years of a startup they’re investing in, they'll be far ahead of somebody who's a better wide receiver, but not a great athlete. That, by the way is also thinks about who you should try to hire in any function.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

Learn how to grow your startup with Sean Ellis, the “Father” of Growth Hacking

If you’re looking for experts that can advise you on when and how to scale your startup, Sean Ellis should be one of your first calls. Sean coined the term “growth hacker” in 2010, after helping companies like Dropbox, Eventbrite, LogMeIn, and Lookout achieve breakout success and billion-dollar plus valuations.

Today, he’s the Chief Evangelist at GrowthHackers, a company he founded in 2016 to “help teams work together to drive breakout growth results for ‘must have’ products and services.” During the summer of 2012, Sean spoke at Alchemist and distilled some of his most valuable insights around product-market fit and developing strategies for growth. His advice provides a significant and preliminary roadmap for early-stage founders, as they look to take the next steps with their startups. Sean shared insights across several different, critical areas.

Product-market fit is important…but what exactly does it mean?

For every startup, finding “product-market fit” is a critical early inflection point. Sean notes that Marc Andreessen, founder of a16z, and one of the first people to coin the term, emphasized that founders should be obsessive in pursuing this state. Andreessen sees it as so make-or-break that every business can be categorized in a binary manner, as either “pre” or “post” product-market fit.

Despite its importance, Sean observes that a metric-based, universal definition of product-market fit has proven elusive. Through his operating experience, Sean has developed a potential solution to this “mystery.” Put simply, companies need 40% of their users, within a large segment of their market, to be in a place where they’d be “very unhappy” without the product. That seems like a clean, elegant solution. But, what is a large segment of your market?

Sean has a few answers. First, you should look for some type of 40% cluster within your user base. Next, try to figure out whether that group is meaningful, or merely an edge case. For example, if 80% of men are really unhappy without your product, that’s meaningful. However, if 80% of men between the ages of 37-40 in Oakland are really unhappy without your product, that’s an edge case.

While definitions are a helpful starting point, there is limited utility in theory. Sean’s unique value comes from his experiences in helping companies achieve breakaway success. To reach product-market fit, he has a few key suggestions.

Have a concrete plan for growth.

  • Pain Point First: Find that there’s real frustration around the problem you’re solving, before you even write a single line of code.

  • Early Feedback: Release an MVP to get feedback on your product as early as possible.

  • Find Your “Must-Have” User: When you find this user, or group of users, who really need your product, learn as much as you can about them. Explore some of the following questions:

    • Why do they need your product?

    • How are they using it?

    • What’s the primary benefit they’re getting from using your product the way that they do?

Sean realizes that it’s tempting to find people who don’t like your product, so that you can try to improve and iterate. It makes sense, but he emphasizes that it won’t lead you to create consistent value. Instead, he advises that you discover everything you possibly can about your “must-have” users, and find out what makes their experience “must-have.” From there, you can start to identify must-have groups and execute on their needs, as they continue to engage with your product. Sean stresses that your product roadmap should be tailored to replicate the experience that’s been resonating so strongly with these must-have users.

Funnel optimization is critical, and it always pays off.

There are a few key skills that can help founders on their journey to product-market fit. According to Sean, funnel optimization might be the most important. He emphasizes that it’s necessary to analyze every point of the conversion funnel. This process can be frustrating, because users are typically unresponsive and unwilling to give meaningful feedback.

However, even if you’re frustrated, Sean says you can't give up or give in. Even a 1% response rate, with months of funnel analysis, can provide significant value. Sean explains that in one case, a company he worked with tripled their conversion rate with minor tweaks to messaging on their platform. Through survey results, they were able to see that users were unsure whether they were actually downloading a free version of their product. A minor tweak that more clearly distinguished between free and paid versions led to the 3X increase in conversion.

Know when to grow.

For most companies, there’s a lot of uncertainty around when and how to scale. Sean suggests that it’s optimal to spend and scale aggressively when you’ve reached the key 40% very unhappy stage, and when you have a positive ROI.

He also notes that, for freemium products, the free version is an excellent customer development channel for premium offerings. This testing ground lets them observe actual user behavior and see where there’s real value. He implores the audience to think about products in their lives that hooked them on their free versions, before getting paid subscriptions. For Sean, Skype was one of these products that quickly came to mind.

The network effects complication.

Toward the end of his talk, Sean makes a key distinction: there’s a big difference between traditional growth companies, and companies that rely on network effects. He asserts that, with network effects, it’s not possible to simulate the value of the company at critical mass, because it continually gets more valuable over time.

These companies don’t have the luxury of finding product-market fit, followed by optimization and growth – they must do all these things at once, which makes the process much more challenging.  

Key takeaways in 50 words or less.

Find people who really need your product and engage deeply with them. Optimize your sales process to increase conversion at every point of the funnel. Recognize that purely viral growth is not sustainable. There has to be a “must-have” experience underlying growth, or you won’t be able to retain users.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

An Interview with Edith Harbaugh, CEO, LaunchDarkly, Alchemist Class 8 (Ocho)

CEO and co-founder of LaunchDarkly Edith Harbaugh has raised over $30M in funding from investors at Uncork, DFJ, and Redpoint. She has more than 10 years of experience in product, engineering and marketing with both consumer and enterprise startups. Edith was Product Director at TripIt, where she launched TripIt for Business and ExpenseIt. She holds two patents in deployment. Edith earned a BS, Engineering from Harvey Mudd College and a degree in Economics from Pomona College. She enjoys trail running distances up to 100 miles.

3 Reasons to Scrap Your Startup

Contrary to common belief it’s not poor market timing, aggressive competition or a lack of ability to raise capital that kills the bulk of startups. Rather, according to CEOs of failed startups, it’s a lack of market for their products. That’s right—all too often startups burn through their funding, iterating on their big idea, without validating that it solves a problem at a price customers are willing to actually pay. In the enterprise, this is even more critical as early adoption needs to be closely matched with the proper pricing structures.

But even if you’ve hit on a true need in your market, there are still a number of other pitfalls that can be hard for first-time entrepreneurs to avoid. Three of the most common reasons I see enterprise products and start-ups fail include:

  1. Low customer adoption/use. If it takes too much time to onboard, doesn’t resonate with CIOs or your target buyer (which could be the head of marketing, sales, finance, HR) or is too cumbersome for employees to use, it won’t gain traction.
  2. Product is not working as intended. Customers may have initial patience for a few minor bugs, but ongoing problems requiring significant rework can sink your company. This is especially true in the enterprise market, as your product outage could cost your customers thousands or even millions of dollars.
  3. Doesn’t address a top problem of your target customer. No matter how amazing your product is or how well it solves your customers’ problems, most companies only have enough budget to address their top two or three pain points. Creating robust buyer customer personas ensures you’ve done more than just scratch the surface of their true organizational needs, allowing you to prioritize your product roadmap accordingly.

The Road Map for Ensuring Startup Success

Communication is key. At Norwest Venture Partners, we’ve found that it’s important for enterprise companies to start by creating a customer advisory board and involving them in the development of each new product or product iteration. Test and obtain feedback from them in real time, as they use the product and test out your demos, and do a weekly gut check to evaluate how sentiment is trending. Start small and work out the kinks before scaling up to your overall customer base.

By involving your customers in your product iteration, they become more invested in your success. In turn, that means they’re more likely to give you the level of rich feedback you need to take your product to its next level and win over your market.

Some founders worry that they can only keep their clients happy by delivering every product iteration they request, but that’s not the case. If you involve your customers in your product development process, they will see the issues you encounter along the way, and won’t be surprised if it doesn’t ultimately work out. Focus on how you can get them excited about helping to define the roadmap–which may include scrapping some products that won’t keep your product on the path to success and longevity. Your customers aren’t just buying that initial product you have on offer. They’re buying your long-term vision too.  

If you’re concerned that scrapping a feature too soon is going to sink your company, consider the alternative. What if you hold out hope for six, nine or even twelve months and the end result is still the same? By failing to take decisive action, you’ve now wasted resources, money and customer time on feedback for your doomed product. This misstep can put you at a disadvantage to your competitors and even cause you to lose some great people who wonder why you let them sink so much of their time and creative energy into a project that had little hope of seeing the light of day.  

Identifying the Right Market to Disrupt

To be successful, a startup must build products that solve real problems the right way.

“You have to look for new enabling technologies, or major trends, like fundamental trends, that create a wide gap between how things are done and how they can be done,” said Aaron Levie, CEO and co-founder of Box, in his Building for the Enterprise lecture. “Looking back in time to our business, the gap was basically storage was getting cheaper, internet was getting faster, browsers where getting better yet we are still sharing files with this very complicated, very cumbersome means. Anytime, between the delta of what is possible, and how things work today is at its widest. That is an opportunity to build new technology to go solve a problem.”

But even great ideas can fail. So how can you recognize when you’re actually on to a billion-dollar valuation-creating product? In my experience, immersing yourself in your customer’s world is the best way to gain the awareness to spot the real opportunities for market disruption.  For instance, it’s unlikely that Marc Benioff would have had the inspiration, confidence and vision to have moved CRMs into the cloud with the founding of Salesforce without his years of success at Oracle. As Benioff counsels in his book Behind the Cloud,  “Don’t be afraid to ignore rules of your industry that have become obsolete or that defy common sense.”

Although some outsiders have a knack for coming in without prior industry experience and hitting the ball out of the park, most successful startups are founded by someone who is obsessed with creating a better customer experience, who understands the industry’s pain points and daily challenges inside and out. If you can tap into the issues that are driving your customer crazy and causing them to lose sleep while efficiently solving them, the market is ripe for your taking.

- Written by Sean Jacobsohn, Cloud VC | Partner at Norwest Venture Partners