As mentioned in the summary insights post, this article marks the beginning of a new series at Story Rules: #LeaderStories – in-depth interviews with inspirational startup founders, investors and corporate professionals, who have shown tangible impact with their storytelling.
The first interview in the series is with Satyam Darmora, the affable co-founder and Catalyst (as he simply calls himself) of i2e1, an exciting startup with a mission to provide internet to everyone, using an innovative business model.
Satyam and his other co-founders started i2e1 in mid-2015 and it has come a long way since then. It has achieved great traction with customers and has also received strong investor validation. It recently raised $3m in Series A funding led by the Omidyar Network.
This in-depth, hour-long conversation with Satyam is extremely insightful and filled with practical advice – on storytelling and other areas. I have learnt a lot from the interview, and I’m sure you will too.
For those interested, below is the full interview transcript:
Ravi: Hi Satyam, to start with, I’d love to know your origin story – was there a defining moment, or an epiphany which led to you co-founding i2e1?
Satyam: Yeah, so i2e1 stands for ‘Information to Everyone’. I think it came out of personal and professional experiences (where we learnt) that information gaps can create an impact on whether people can transform their lives or not.
If you take my own example – I came from a small place in Uttarakhand (Kedarnath) where we didn’t know of the opportunities that existed in life. We happened to end up at an IIT because someone told there’s an exam called IIT JEE… Otherwise systematically most others didn’t even know that it existed.
And as I grew in my career in different countries I just thought that it is highly unfair that there are a set of people who want to do well in life, and who also probably get a bookish education, but do not get the right information about opportunities that exist. Even today in a small Tier-2 town, if you aren’t taking science as a subject, people think that there are no careers which are available.
So that has been a broader context and has also been the background story for a couple of other co-founders and initial employees. For e.g Ashutosh (Mishra, CTO at i2e1) comes from a very small place near Gorakhpur… He did not know about IIT as an exam; only did the AIEEE, went to NIT, then got a job in Microsoft.
So we are primarily a set of people who felt that information asymmetry causes inequality, and something has to be done about it. It just so happened that we knew each other one way or another. And we believed that with a good team it’s a solvable problem.
So, there was no defining moment or epiphany as such. In my case there has been a thought undercurrent from many years. If there was a moment of precipitation, it would have been my completing 7 years in my previous employer (Michael & Susan Dell Foundation). It was a great environment, but you could call it the 7-year itch. There were a lot of coincidences, meeting the right set of people, and many of us thinking and getting to the idea at same time. So essentially an undercurrent which precipitated at 7th year of the previous career for me.
Interviewer Note: Bestselling authors, Chip and Dan Heath, call this as the ‘Crystallisation of Discontent’ moment, in their latest book, the ‘Power of Moments’. Many of us are discontent about something and it takes something innocuous (in this case, completing 7 years) for us to decide to do something about it.
That’s interesting. So when and how did you actually start i2e1 – how old are you guys now?
So we took incubation in IIT Delhi in June 2015. Initially it was just a concept – all we knew was that data is new currency, and we wanted to build a business with a strong data platform and futuristic in approach (rather than based on past models). We found some very interesting research by professors in IIT Delhi. We reached out to Prof. Mausam who’d done a lot of interesting research in AI. He’s worked with the best in the world. Somehow we did a cold call to him, and got into a meeting room. We told him that we wanted to do something for solving info asymmetry and felt that machine learning and and AI will be a huge part of it. He agreed to mentor us. We applied for incubation at IIT-Delhi and got it. So its been about 2.5 years now.
Great, ok, so in terms of storytelling for any startup, there are two broad stakeholders: investors and customers. There are also employees, partners etc. but we’ll focus on the first two. Within that let’s start with investors. While talking to investors, how did you initially narrate the i2e1 story and how did it change over time?
If I look at the initial investors and how funding happened, the underlying storytelling started even before i2e1 was founded. The people that I had worked with in the past, including previous bosses – the day I told them that I want to do it, even without listening to the idea, they said that ‘you know we want to invest in it’.
So basically these were people who knew me or the other founders and knew that we were really passionate about this. These investors didn’t really worry about whether there was a model in here or not. Even before we took the story of i2e1, they had heard snippets of the idea in the past from me… So it would have gotten in their minds in the form of a story.
Makes sense. I’d just like to interject here. So in persuasion, Aristotle talks about three factors – ethos, pathos and logos. Logos is your logic, arguments, data. Pathos is the emotional underpinning, the human stories of your customers and the impact etc. Ethos is your character, your credibility and reputation that has been built over time. In persuasion, ethos is more powerful than pathos which is stronger than logos. So I’m not surprised that in this case, it was your ethos which trumped the other factors.
Yes, you can put it that way. The initial set of people were because of the ethos factor. Also, I first put in my own money in the company. I knew that before I reached out and asked someone else, I had to be fully convinced, so I couldn’t shy away from putting whatever little earnings I had into the company.
So we initially raised Rs.1.5 cr., and it almost got done by the ethos story.
Having said that, in the journey we also met a couple of other people, including folks at with growx and 3one4 (Pranav Pai). For growx and 3one4, since there was no past, and since the model hadn’t come together, it was about the possible impact and the team which was committed to get it done. Even though we weren’t a traditional fit in the investment world, what we were trying was very India centric. We didn’t have an answer if someone had done it in the US (no one had). We weren’t trying to build another app, we were talking about these things which large telcos were trying to do.
And because of that, it was difficult to get the attention of people to our story. Fortunately for us, growx and 3one4 believed in that vision and the team. Sure they’d have seen the logic as well… but in the early days, the product was actually tested only by 25 odd clients, and we got our first seed funding., so it was a clear leap of faith for them. Including growx and 3one4 our round was for Rs. 3 crores.
Then we built the business and we recently closed our next round of funding (Series A, worth $3Mn). During the journey, the story took different turns. We also got into the trap of thinking what do investors want to hear. And if I look at all the iterations our story went through, eventually we went back to why are we here…. why i2e1, which is ‘Information to Everyone’… , and we realised that the moment we went back to the why of it, it started to resonate more with type of investors that we were looking at.
And of course it was backed by the good work that we had done. We had grown around 45X, our unit economics were making sense… What we weren’t able to answer were two questions:
But those questions and conversations helped us a lot because it helped us to go back and say that – let’s go back to the primary story we are trying to build. Interestingly, if I see the various iterations of the deck that we used, the decks which started to click, were very similar to the first presentation that we had made when the company had started. And that has made us a stronger believer in the why of things.
That makes a lot of sense. And I liked the part you said about the ‘Why’ resonating with the right type of investor. Now how would you sense that? How would you differentiate between: Is this investor not investing because I’m not explaining well enough or is it because they’re not aligned and just not going to get it, however well I explain it?
So we met various kinds of investors. You need to put in rigour and discipline into any fund raising exercise. It may be that you are an exception where everyone is after you, but if you look at historically, people have even rejected companies like Google and LinkedIn … and what comes out is only the success part of it. Most promoters have had to rigorously work on a fund raise, because they are trying to convince someone to put hard earned money into you. So many factors playing around and the probability of you being funded is <3%.
There’s a second part here. In the investing ecosystem, the power balance isn’t as stable. It is imbalanced towards side with higher negotiating power (naturally). But at times, the imbalance creeps into style of working and attitude. For e.g. lets say I have a great model and many investors want to invest in me. Even then, I need to go into the investor conversation with a learning attitude. Conversely, while investors should question founders, it should be more from a supportive attitude. At times you get into a conversation, where the questions are more cynical and telling you why it wouldn’t work. As an entrepreneur, you know why it won’t work…but you’re going by the faith of why it would work, not by the logic of why it wouldn’t.
And probably that’s what creates entrepreuners. For e.g. there’s no logic as to why someone should create Uber when there was Google Maps and Google could have created it any day.
If you’ve looked at my LinkedIn post on the topic (about different types of investors)… that has been our experience.
When I met Sameer at Nexus, they didn’t invest in us, but the conversation was just amazing. I learnt so much and there was so much warmth in the conversation. He asked the right questions, and while I didn’t have answers to some of them, it made us think. It was the same with Siddharth from Omidyar. We were fortunate to find Brijesh from Auxano Business Ventures as another investor, where it ‘clicked’ from the first meeting itself. While many investors talk about being ‘promoter first’, Brijesh walks the talk. Miles ahead of his contemporaries.
That, at least to us, has been very important. Its a long term thing, it has to click. Its like a marriage in some ways. Marriages also work on faith.
Absolutely. Now, for some of the investors, did you struggle to explain your concept and did you have to use constructs, analogies etc.?
Yes, when you are building a model which is different from others, putting an analogy obviously helps. And probably that has to be the first slide.
For example we used to describe i2e1 as the “Airbnb of the internet”. Because that tells you that we’re talking about sharing of internet at some level. It also created a punchy line.
You have to realise that the investment is happening not to make you profitable, but to make you a billion dollar enterprise. Therefore you have to hit on their imagination, probably not as much on the logic. This is globally true. You have to be a good storyteller, because eventually you aren’t dealing with machines or robots on the other side. You are dealing with a smart set of people, but the underlying word there is ‘people’. So yes, analogies were very important. So every time we could make analogies with businesses that they knew very well, the discussion was very productive. I’m focusing on whether the discussion was productive or not, rather than whether they funded us or not. For funding someone there are multiple other factors. What clicked was the combination of right analogies.
We weren’t into the same trap that many promoters fell into – that because we had created a product, we get stuck into telling how great the product is, its benefits, features etc… Rather we realised that the investor is looking at what is the big dream that this guy can take me to, and therefore what is the real life analogy that you can tell me to understand it in five seconds.
(Malcolm Gladwell’s) Blink story works on that concept – that the deal decision is made in that first few minutes. In that time, when they’re making a quick decision, are you able to portray the right analogy in front of him… in 90% of the cases it’ll influence if the investor’s interested or not…
So in my experience, in almost avery single case – if the person was not interested in first five minutes, anything we said later (with our logic, data etc) wasn’t able to turn the tables. If we could get their imagination in the first five minutes, then the rest of the discussion made sense. So Chapter 1 is the most important.
Fascinating. So did that undergo a significant change in terms of how you were positioning or framing the model or business?
Yes. You meet a different set of people and you see which analogy is aiding their imagination better. Because as an organisation, we are creating a product and there are certain facts around it. The story can be told in 5 different ways. Which way does it impact most people makes a lot of difference.
So for example, we tried “AirBnb of internet” to “Spend Bureau of India” (modeled on the Credit Bureau of India which tracks data on creditworthiness) and “Google Analytics of Offline world”. So, it kept on changing the description… I mean our product didn’t change.
Yeah, someone looking at these descriptions – might think these are three completely different products. What you’re just doing is turning it around and presenting it from different angles…
Exactly right… What was important was that in the first five minutes we are able to catch their imagination, so that we can explain what we are doing in the next one to two hours…
Its almost like the entry gate to the home is the most important point… although you are finally entering the same home (same kitchen, same bedroom everything).
Right, but there’s one caveat here right – some people kind of go overboard and every business is presented as the Uber of this or that… and Uber is an especially overused analogy. But what you tried to do was use some different constructs, like Spend Bureau or Google Analytics.. that might have helped
Yes.. as you can imagine, you have to find the balance between not going overboard in selling the story, and therefore saying that you are the next Uber, because then if you aren’t able to back that up… Like most conversations are, it is also about alignment of expectations, right. So if you set expectations high but the rest of the conversation doesn’t align with that, you might end up not having a great conversation… because you only set expectations which were unrealistically high.
On the contrary, if you set very low expectation, then the person is not going to be interested – so it’s critical to get the right balance. And we realised that each organisation has to recalibrate the story title so that when the 1 hour conversation ends, expectations were aligned at both sides.
There’s no point in saying that I’m the “Uber of CRM”, when all I’m selling is just another ERP. It might be best ERP in world, but because I set a different expectation, the person lost interest.
So you said that the expectations have to meet reality. Where it comes to reality, I call that as “having the story”, as in you have to have the numbers to back up your claims. But there it’s an uncertain thing right, as in many people who don’t have great numbers too get funded. So how important is it really, to ‘have the story’ – you know the growth, revenue numbers, unit economics, etc., vs. the ability to tell a great story?
So, it needs to be seen in context of what you’re building. If you are building a classic platform business, the metrics won’t be about revenue and unit economics to start with…. it would be about users. And that has been proven right by certain businesses.
But in the recent past, the ecosystem in some places was confused – in terms of ability to point out which model are we going after. Certain businesses which actually shouldn’t have been about capturing users, started looking at user metrics… whereas even in the final stage their unit economics would never have materialised. So there was lot of hope that if users come, it’ll all work out.
Becuase we aren’t dealing with machines, stories make a difference and sentiment also works. There was a time when people would’ve gotten funding by selling a story of captive users – saying that India has 1.3Bn users, hence give me funding.
Then those models started to fall down and the pendulum went to the other extreme. So since the last 1.5 years, questions around unit economics and revenue growth have been very specific. And people have told us that do not tell me about what the future potential is, tell me what is the revenue you are getting today.
When we try to say that don’t look our base rvenues, because the real revenue will come from the data that we’re building, the investors weren’t interested, sayng “that’s all the future…now you tell me what is there.”
This reaction I’ve heard from few other founders too. Even something which is a reasonable story, is not working – because people are saying that show me that the unit economics works and show me growth. So in that case, if you’re a B2B model, they are getting funded … but they are getting funded on a revenue basis and so valuations have taken a dip… Or it would be a purely a B2C or C2C model. If someone is trying to create a hybrid model which is a B2B2C model, there it becomes tricky. The expectation is that you’ll be on either side. Its safer to be on the B2B side, since its the more logical story because it is backed by numbers, revenue growth etc.
Ok, then there’s the question on competition. How did you differentiate from competition in your story?
So, we had the other problem which was, the model we were trying to build hadn’t been tried before, it was unique. We were usually asked “no one else has done it, no one has done it in developed markets…”
So where’s the proof of concept….
Ya, there’s no proof of concept, it is very very difficult, especially to give a relevant analogy. So for e.g. an investor once asked us “I have gone through everything, and I have only 2 questions for you – What is the defensibility of your concept, what if someone copies it… and second, Isn’t it very difficult to do, since one one else has been able to do it?”
I told him that his second question answers the first. Because it is so difficult to do, that’s the only defensibility.
So for us, at the surface level, it seems like there was competition, but when we described the model, our problem was more to convince them that ‘this can be done’. What really helped us was that we had a strong team to back it, compared to competition (whichever way you defined it). For e.g. people thought of us as competition in WiFi field – and we have the strongest team out there. And obviously, an important element investors look for is whether there is a team that can deliver it.
So team was our strongest advantage. The second advantage was what we were able to achieve (in terms of numbers), for the later round of funding.
Great. A last question on the investor piece – regarding the decks and collateral, especially the initial ones you sent to get a meeting. How critical were those and how did you approach them?
In terms of the approach, because of my background, I knew people on the investing side, so I could go through references, rather than cold emails. I always tried not to share too much information on email upfront because I think in early stage, it’s a story which has to be told in front of someone. How do you put your passion, your hard work, your commitment in a PPT, we didn’t know. I think the flavour of the story doesn’t come out.
So the strategy was to have a 2-3 line teaser email and ask for a meeting time. We wouldn’t prefer Skype or a phone call, since if it’s not working, it unnecessarily breaks your rhythm.
Also, it’s a lot about the person sitting in the room – it gives you a feel of the person on the other side. At times you may have a choice and you need to go with right kind of investor.
So we probably didn’t send too much material in advance. Even in the Series A round, our preference was to meet people. Many investors are Bangalore and Mumbai. In our case we made sure that we’ll fly there and tell the story rather than make a phone call.
The other thing is to have ongoing conversations. Strategically you should seek grounds for meeting people even when you are not trying to raise funds. You don’t have anxiety they won’t invest and they wouldn’t have an apprehension of refusing you. There’s a saying on the investing side “If you ask for money you get advice, if you ask for advice, you get money”.
So, engaging with certain type of investors, understanding their interests and keeping them updated makes things easier, so that you get face-time with them … and when you get face-time make the most of the opportunity.
Throughout the last 1.5-2 years we were in touch with investors – talking to them, getting feedback,… not only with purpose of raising money, but also to gain insights and information… People generally say that investors meet promoters to get information out of them for their portfolio companies. I believe that if you’re smart enough you can do the reverse too. They meet hundreds of people and companies and have people doing a lot of research. I remember I took my small notebook and every company they talked about, I’d quickly write it down. For us it was access to curated research. Plus, some of the investors are very smart people and ask very sharp pointed questions.
Of course, once you got into the meeting you need to have the entire depth, detailed deck etc. In meetings we went completely prepared with detailed presentations. Sometimes we may send a deck 30 minutes in advance (to avoid any issues from your laptop there).
Got it. Now coming to the other stakeholders – customers. I like the positioning that you had on your website, which is targeted at customers in clear benefit terms (80% faster growth for offline business, #DefenceAgainstOnlineRetail, 30% RoI etc.). How did this story evolve? What did you start with and how has it changed over time?
So we are primarily a data driven company and it was Natural to evolve such that data is telling the story. Indian entrepreneurs are becoming smarter and want specific RoI… and makes business and common sense that the data points come out in the form of story – they have to convey the benefit to the customer.
Makes sense. But initially you may not have had the metrics to share with customers… How did you convince your initial customers to buy?
The customers who initially signed up were typically the higher risk takers, who were willing to take a leap of faith. At that time we did not have actual customer cases. But still, in our sales pitch, we were talking about some data points from research. For e.g.
Over time as actual customer data points started to come in, we started using them, given higher authenticity.
Our initial pitch was built around 3Cs: Compliance, Control and Communication
– Compliance: We can keep track of who used WiFi (as per regulation, you need to do a phone number OTP based authentication before allowing use of WiFi, and also keep track of use logs, to avoid illegal access etc.)
– Control: Set data usage limits and make sure that customers or staff aren’t misusing
– Communicate: Now that you have your customers in your (wifi) network, you can communicate better with them. Understand their preferences, choices better; and also send them targeted offers.
So the 3Cs were the original sales pitch. and depending whether you are giving Wifi or not, you have tailored the message.
You offer your services to a wide variety of service businesses (hotels, retail establishments, malls, small outlets) … How did you segment your audience – was it by industry type?
So based on our research we identified three types of personas.
These segments/personas are industry agnostic.
To tailor the message to these personas, one small hack we did was with our visiting cards. Apart from our names and contact details, on each visiting card, we wrote a relevant data point relating to their business. We had 4 such card variants each with a different colour at back – red, blue, yellow, green. For e.g. on every red card was written – “Establishments with WiFi are preferred 80X more” or on the yellow card it was written “Ads on iOS will give you 18X compared to ads on Android”; Green: “95% of WiFi in retail establishment expires every month.”
The whole idea was that – we may need to customise pitch depending on persona… so let’s have different messages catering to different personas in our cards… when we are meeting someone, figure out the persona and the share the message that will connect most with them (using the colour to quickly identify the card).
It was interesting – because aren’t interested in reading the phone number, designation etc., but people would read the message… that helped us to start communication. Before initiating the story itself, we were giving pointers as to what they were going to talk about.
That was a really cool hack. Later how did you move to showing actual increase in financial metrics for the customers?
Apart from people using a customer-store’s WiFi, our devices could sense other smartphone users in the vicinity. So using them as a control group, we could make out what is the loyalty rate of a WiFi user vs a non-WiFi user. That gave a number on Footfalls – how many times a WiFi user came as compared to a normal user.
With estimated ticket sizes, we could also arrive at the monetary gain from this. We also realised for WiFi users, the bill value was also higher – by 50% – than the non WiFi users.
Got it. Coming to your sales force – what tools did you equip them with to pitch your story better?
So we have two types of customers – retail (small, owner-driven stores) and enterprise (large multi-store chains). We had prepared separate tools for both.
Given the longer sales cycle in enterprise sales, we have now started using CRM. It helps in better data transparency and in prediction.
We created standardised pitches, emailers, PPTs and explainer videos and trained people in delivering them.
Being a data driven company we also wanted to know the efficacy of the material. So we use a tool called Attach.io, which is used to track file usage by viewer. We can track who opened the file, when, and spent how much time on each slide (for example a cost-conscious customer may directly to go the pricing slide). The basic question it answers of course, is whether the person has opened the file or not.
That sounds like a really useful tool – I’m going to try it out myself!
Coming back to your origin story, you want to address information inequality. You’ve started at the right place where you are utilising unused data capacities… But I’m guessing that you would be targeting segments like government schools and colleges later… given your mission. Do you have a mission statement per se?
Ya, we call it the purpose statement, which says: Information asymmetry causes inequality, we want to solve for it and in doing so, impact the lives of 500 million people.
In Phase 1: we want to create a model which reduces the cost of delivery. If you look at the base solution… we reduced cost of the box from Rs. 25,000 to Rs. 2,000. It changes your unit economics completely – if you want to give WiFi, you can manage it at a much much lower cost.
We are also creating more capacities of free internet. As I mentioned, about 95% of data in a monthly plan, goes unused. As we speak today, across all our customers, we have unlocked internet capacity of 225 GB per day in Delhi and 105 GB per day in Bangalore.
In Phase 2, we intend to translate the data into valuable insights.
From a customer segment point of view, as we started, it was important to start with the higher segment of society, because that’s where brands are willing to pay. As we look at the roadmap, we believe that there can be sponsors of internet, if they see value in it, even for smaller locations. For e.g. we are working at very small stores, where an FMCG company is interested in sponsoring the internet, where they’re valuing the insight that we’re generating for other sectors.
So overall, the idea was to
In reaching our overal mission, another relevant initiative is our pilot with TRAI, where we are trying to sell internet for as low as Rs. 1. By definition, such initiatives are targeted at the masses.
But in terms of initial product, we realised that early adopters in any new innovation are generally people who are risk takers. who have options to take that risk and will come from higher economic segments of society. Also, we didn’t want create a product targeted only at the “lower economic segments” of society, in which case a bias for cost cutting would have come in. We wanted to create a model which is good enough for the richest and best in country – then it will be good for anyone else. For the lower economic segments, the product and service level would be the same, we will just play with the product quantity.
Thank you Satyam for an extremely insightful conversation. I’m sure the readers will find it very useful.
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