At today’s roundtable, we announced 1M/1M Premium company Freshdesk’s $1M funding from Accel Partners. Freshdesk is a social customer support startup offering a SaaS solution to small businesses. The team is led by Girish Mathrubootham and Shanmugam Krishnasamy, who have their roots in Zoho, a SaaS company that has revolutionized the category by drastically undercutting the CRM price-point by leveraging India to build a $100M+ 100% bootstrapped business. Freshdesk aims to do the same in Social CRM and already has paying customers. [See: 1M/1M Incubation Radar: Freshdesk]
I then discussed some of the lessons of the Freshdesk financing. Instead of rushing to raise money, the entrepreneurs have followed a systematic methodology of validating all the assumptions and got as far as paying customers before starting the funding round. As a result, they were able to get multiple competitive term sheets and negotiate both valuation and terms to their advantage with confidence.
Also notable is the ‘affordable SaaS’ opportunity, exemplified by Zoho and Freshdesk, that Indian entrepreneurs are zeroing in on. There is clearly significant investor appetite for this category. [Read: India’s Big Opportunity In SaaS]
First, Andrew Kubik from Augusta, Michigan, pitched iDelectus, a training platform for domains where federal certification is a requirement (example: air traffic control). The company is very early, and I have concerns about the length of time it would take to see any cash from winning federal contracts. Such long sales cycle businesses find it very difficult to sustain and survive the pre-revenue period.
Then Tatyana Gann from Nashville, Tennessee, presented Loyaltepays.com, a service to help business consultants who blog, with additional monetization mechanisms for their content. It took me a long time to weed through the rather foggy positioning to even get to that beginning nugget, since some entrepreneurs seem to have a tendency to float all over the place. Along with ‘spray and pray’, another one of my favorite expressions these days is ‘motherhood and apple-pie.’ Tatyana, my dear, rein in.
The Biggest Open Problem of 2012
Finally, I want to point you to what, in my opinion, is the biggest open problem of 2012. If you are a content producer or a freemium app or game developer, you would know, instantly, what I am talking about. There is WAY too much ad inventory out there; too many eyeballs that are not getting adequately monetized; major publishers sitting on top of huge masses of unmonetized impressions; game developers monetizing, barely, 1% to 2% of their traffic; app developers similarly struggling to convert free users to premium.
If you are an entrepreneur, looking for an open problem to solve, look no further. This is your opportunity. In 2012, one of the greatest unaddressed pain points for the Mobile and Online industries is this overabundance of eyeballs that publishers, software, app and game developers are struggling to find monetization models for. [You can read more and participate in the discussion on my blog.]
You can listen to the recording of today’s roundtable here. As always, I would very much like to hear about your business, so let me invite you to come and pitch at one of our free 1M/1M public roundtables. We will be holding future roundtables at 8:00 a.m. PST on the following dates:
If you want a deeper relationship with me, you are very welcome to join the 1M/1M premium program. If you have any questions about the program, please, first study the website, especially What to expect from the 1M/1M premium program and the FAQs. If you have additional questions, please email me, and I would be very happy to respond. Please note that I work exclusively with 1M/1M entrepreneurs.
I also invite you to join the 1M/1M mailing list for the ease and convenience of getting updates. This way we can stay in touch and it will help you to decide if 1M/1M is a program for you.