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Karthik Sridharan

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25
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2016-10-07
most recent
2016-10-07
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1
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  1. “Big picture. I think the next five years are going to be honestly fucking awesome. I'm really excited. I think the phase that we're kind of in right now for Connect is we've proven out all the kind of foundational elements that we need to prove. And now really the next step is, you know, can we make this the dominant B2B platform out there? And I think that is, it's obviously daunting. It's obviously a little bit nerve-wracking, but super exciting. And we have the right team in place to do that. We have the resources to do that. And so it's going to be exciting times. Like I mentioned earlier, I think the exciting thing is going to be how do I mature as a founder and as an entrepreneur and how does our organization grow from just a couple people in a room to really a much larger organization? That's going to be interesting, but it's all new experiences and new learning. So I'm excited. I'm pumped.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Oh, yeah, yeah. And he's such a nice guy, too, which is an awesome kind of side bonus. And I just like how it's very data centric. It's pretty interesting. And we're not even a SaaS business, but I just like reading it. Another good blog that I read is The Entrepreneurship Blog at the Wharton School, my alma mater. So I like reading that just to kind of keep track of what's going on with other alums that are in the startup scene.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “When it comes to startup stuff and entrepreneur stuff, I think some of my favorite blogs, I really like on startups, which is by Darmeische at HubSpot. Really admired what they've done in HubSpot over the years. I really like Tom Tungus's blog. He's a partner at Redpoint. One of the nic”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “That's a curveball. I like it. I would say when you're evaluating marketplace founders, as an investor evaluating marketplace founders, I would really, really try to make sure that they understand marketplace dynamics, get them to talk ad nauseum about marketplace dynamics, all the greatest hits, chicken and egg problem. What do you think about liquidity? What are all the different types of revenue models you've thought of and why have you chosen this one specifically? How do you think about demand side versus the supply side? all those things make sure that the founder can speak ad nauseum about marketplace dynamics they don't if they can then it's not worth it because marketplaces are difficult enough as it is to execute they have”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “I think the biggest challenge in growing Connect are really any startup is the different kind of phases that the company goes through and being able to adapt to that. In the early days, you're hustling, you're a few guys in a coffee shop, you're just trying to figure out how to make things work however you can. As you hire people, as you grow, you start becoming more of, I guess, an organization. And now we have close to 50 people. That's a lot of people to manage. You're not as nimble as you once were, and you need to figure out how to make other people work to make the organization grow. It's not just about two guys figuring out random things. And I think that's a difficult thing for most entrepreneurs to mature as a founder, mature as a leader, I guess.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Favorite book ever, I would say, is a book called The Code Book by Simon Seng. An awesome book has nothing to do with startups. It's about cryptography, the history of cryptography. The reason why I love it so much is it kind of was the first book that got me interested in computer science, which I guess has, you know, led me to this day. But it's just a fascinating book about how mathematics and computer science had a hand in, you know, just cryptology throughout time and how that played into the Bletchley part kind of cracking of the enigma during World War II and all these really, really cool things. And I guess eventually over to RSA encryption and all these interesting things that we're still talking about today. So pretty awesome book. I highly recommend it.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “If you don't understand how VC works and how the industry works, I think you could be forgiven for kind of asking for those intros early on. But once you start understanding the dynamic of how VC funds work and how investors operate, you really start understanding how some of those intros are not just frustrating for the person that you're asking for them, but also kind of are pointless, you know, because those investors are not interested in base, may not have experience in your space. Would you even want to take money from them, not those three investors specifically, but just in general, would you want to take money from an investor just because they're famous, even though they don't know anything about your space and have no experience with your space? I don't know. It's an interesting question. And as a founder, you need to be asking yourselves those questions, you know, where do you want to, where do you see your company going and how do you see investors kind of helping you along that way?”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “About it. I think we learned from an early kind of stage of our fundraising that it's important to find out which investors are right for you, which partners at those funds are right for you, and then try to target those investors. I think if you speak to investors who understand your space, who have experience in your space, the conversation is better, the likelihood of you getting an investment is higher, and also you're going to be asked the right questions and you're going to be focused, you're going to be kind of nudged toward the right topics during the pitch meetings. And so it's better for all parties involved. And if you do end up taking money from those investors, you can trust that they'll actually be able to guide you in a better way. Whereas if you're just kind of randomly trying to talk to whichever investors you can get an intro to, it's not really necessarily an optimal strategy. So those are some things that I think we did right.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “And just the metrics underpinning our business. And that helped us a lot because I think especially as you go into later rounds, investors really expect you to have a solid understanding of your business, two, three layers deep with your metrics, not just what's GMV, but acceleration of GMV in certain product categories. And like you mentioned earlier, you talked about take rate. What are the different take rate scenarios? And how do you project that forward? And how does that affect your engagement and all these different things? If you don't understand that data, I think you're really putting yourself on a weak footing when it comes to fundraising. I know I said two things, but I guess the third thing that I think is important is really, really doing your homework when it comes to investors. I think a lot of entrepreneurs, they kind of underestimate the importance of that. There's a lot of, you know, when I speak to my friends who are entrepreneurs, you know, when they're first starting to fundraise, there's a lot of this notion of, hey, can you just intro me to any investors you know? And that's just really not the right way to go.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “The metrics are going to look a lot different today than they will two, three, four, five years from now. It's more about is this team sitting in front of me the right team to make this happen? And do they have the knowledge and the kind of ability to iterate quickly and to handle all the different shit that's going to be thrown their way throughout this process? And I think we did a good job with just doing our homework and really understanding our space so that industry felt like, okay, you know, there aren't a lot of people who are looking at small business purchasing. But damn it, if we are going to make a bet on the space, these two guys know as much as humanly possible about this space. So that was the first thing. I think the second thing that we did really well, like my co-founder and I both are extremely data centric and I think that that helped us a lot. It wasn't just viewing bullshit about, you know, the paradigm is shifting and this and that and just having just random business words thrown in. We really had a deep, deep understanding of the numbers.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Okay, interesting. So I think we did a lot of things right. So I got to tell you, Harry, I mean, we're pretty cool. But it's probably the biggest things that my co and I did right is we really, really understood our space. We really did our homework, just really understanding all the different aspects of our landscape, of our space, the history of our space, you know, talking to founders and CEOs of companies that had been in our space decades before, having thousands of calls with our customers, really understanding every single aspect of our space. And I think that really helped us during the fundraise. It wasn't just a game that we were playing just to, you know, try to sound like we knew what we were talking about. We really did know what we were talking about. And I think that's really one way that you can impress investors. And I'm sure a lot of the VCs listening will agree, especially in the earlier rounds. The most important thing is not what traction you have necessarily, it's about the team quality and it's about is this the right team to take a bet on because obviously the business, the product,”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Whether it's Asia or Europe or elsewhere, it would probably be more defined by kind of national local strategy in different countries rather than kind of just connecting buyers here in the US with international suppliers.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Eventually, it will be. North American market is so massive, and I think the small business landscape here is so broken for the small businesses themselves that I think there's a lot of opportunity to expand even within the US and Canada. I think eventually we do want to expand internationally, not only to Asia, but also to Europe. But I think that it's not going to be over the next few months, that's for sure. But I think one thing to really think about is that we're mostly focused on small businesses and small and medium-sized businesses. And what that means is that they're usually unlikely to deal with suppliers that are based far away from where they're located. So there aren't a lot of small businesses and medium-sized businesses that are dealing with factories and suppliers that are thousands of miles away. So the SMB market tends to be a lot more regionalized, nationalized, and kind of localized, if and when we do expand internationally.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Just general trust efficiency of dealing with a factory 10,000 miles away, language barriers, all these things kind of joined together to create a really, really difficult situation for buyers to have any more deep interaction than simply just messaging. And that's fine because Alibaba has made a great business out of that, but end up getting relegated to more of a glorified trade directory. You know, they make a lot of money off that, but it really makes it difficult for them to handle and really getting into the deep levels of interactions between these businesses. And that's kind of where we see Kinect moving into.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Nice. That is an interesting question. Yes, so I think the way I think about Alibaba, and my co-founder and I have thought about this, you know, from the very beginning when we were originally raising our seat round, this is back in 2012, was we love the fact that Alibaba exists. I think Alibaba has really proven, you know, over the years that a B2B marketplace can exist online and can exist at scale. I think the way that we view them is they have a lot of structural impediments that prevent them from really getting into the deep levels of interactions that we are handling and we hope to handle more in the future because they're mostly focused on an East Asian supplier base and mainly in mainland China. So most of Alibaba's buyer base is in Europe and America and they're connecting with suppliers in East Asia. What that ends up meaning is that the currency issues, tariff issues, logistics issues.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Has with their demand side. Do we have good liquidity? And that is a necessary but not sufficient precursor to GMV and a whole bunch of other engagement metrics for a marketplace. So that's kind of what I always look at as first principles rather than just focusing on GMV. And when I talk to my friends, especially earlier stage marketplaces and they try to jump right to GMV and ask my advice on that, I say, hey, listen, GMV will come if you have solid liquidity. So let's talk about that first. And if you don't have a good framework for thinking about liquidity and how you're going to get to good liquidity, then don't worry about GMV. It's kind of like running before you can crawl kind of.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Or can't get them quotes within a decent period of time. If we can't do that, then it's a moot point to wonder why the hell the buyers and actually making the purchase or why the buyer doesn't like us or doesn't trust us or doesn't come back. In the same way that for Uber, I've read in the past, and I'm sure this all is changing as it is for every marketplace, that their kind of definition of liquidity was, well, what is the average time that it takes between a rider requesting a ride and a car actually arriving? And I'm sure in the old days what percentage of the time when a rider requested a ride did a car actually arrive? You know, maybe in the very, very early days of Uber. If a rider is requesting a ride and the car comes in an hour or doesn't show up at all, who gives a shit about everything else related to Uber? It doesn't matter what their logo looks like, how fancy they are, do they have Uber Eats? Do they have whatever they have, right? It doesn't matter about anything else. That is the main kind of contract, if you will, that a marketplace.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Large as a marketplace, it means you're doing something right. It means there's a lot going right. I mean, I like GMV from that perspective. Is it the be all end-all of the health of your marketplace? That's an interesting question, I think. The metric that I kind of think about as being a little bit more fundamental than just GMB for a marketplace is this concept of liquidity. And for every marketplace, that's different. Essentially, like what is the, I guess, the SLA, like the service level agreement that you think about for your buyer side? So for us that would be when a small business, when a buyer creates a request for quote, what do we do for them? Do we get them n number of quotes within a certain period of time from the right suppliers? You know, that is how we think about our definition of liquidity. This widget, and Connect can't get them quotes or can't get them more than one.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Yeah, absolutely. So I think it's a really interesting question. I've actually had this debate with a lot of my other marketplace friends as well. I mean, I think GMV is a really, really fantastic kind of high-level big picture metric to judge the overall health of your marketplace. It's an amazing metric to use for that in terms of like, I guess, simplicity and how complete it is. I mean, if you look at a GMV of a marketplace, it tells you so much about the scale of the marketplace, as well as all the things that need to be going right. I mean, in order for us or any marketplace to book GMV, there needs to be a lot of things that go right. You need to do right by the buyers and by the suppliers. You need to facilitate that transaction. You need to make sure that you're providing solid liquidity. You need to do all these different things in order for that GMV to actually come about. You know, the way I think about it is if your GMV is growing fast and your GMV is”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “From the perspective of all the different types of interactions that could be happening between our demand side and our supply side and trying to capture all of those. When you do that, you actually start building almost like, I guess what Facebook calls their social graph, what we think of just as, you know, like a B2B graph of you're owning the nodes in this network as well as the edges between the nodes, the edges being all the different ways that those nodes can interact.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “And the supply side is just one of the types of interactions that you can facilitate between both those sides. So a small business, which we call our buyer and suppliers, we're facilitating a transaction between them. But aside from that monetary transaction, there are lots of communications going on between the buyer and the supplier. There's an initial request for quote that the buyer sends to the supplier. There's a quote that's submitted. There's a negotiation process. There are invoices, there are payment requests, and even just prior to creating the request, we found that there's so many interactions that happen between the two sides related to discovery and research on purchases. And so we started thinking, well, it really doesn't make sense for us to just enter into this entire purchasing process just at the point where the small business, the buyer is ready to actually make their purchase. It really makes sense for us to think about ourselves more holistically.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “No, no, no. That's a great question. So I think it's one of those topics that you can go on for a while. But I guess to summarize what I would say is there's a nuance difference, but it's an important one. And I think when you're just thinking about your business as a marketplace, which I think we originally started thinking about our Kinect as simply a marketplace, a transactional marketplace. You're connecting demand side and supply side. You're the middleman in between and you're trying to facilitate transactions. And your goal is to increase GMV, your gross merchandise value, and get a take rate on that GMV. And I would say that's kind of a narrow view of what a marketplace is. Now, we've expanded our purview to think about ourselves as a market network or as a larger platform. I think that was more of an organic thing that happened. The way we thought about it was, well, the transaction that is facilitated by us between the buy”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “But they just didn't have any good recourse for it. There were no good tools out there. And that's kind of what got us thinking. And yeah, we started to do more research into it. And we kind of found that small businesses are kind of stuck in this awkward no man's land where they can't really go to Amazon or eBay or use consumer sites like that, like say me and you could, because they're usually buying pretty custom things. They're buying custom equipment. They're buying custom machinery, or they're buying things in bulk quantities. And at the same time, like I said, they don't have the resources of a Fortune 500 company to have a procurement team. So they end up kind of resorting to some pretty old school things. They're flipping through paper trade directories and using the yellow pages. And God knows what else. And it's not their fault. You know, they just don't have a lot of tools available to them. So that was kind of the original impetus for Starting Connect.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Like IBM or Bank of America could kind of afford to spend money on fancy consultants like him to help them improve their purchasing. But I wonder what small businesses did. And that was kind of a question that we were really curious about and we were both really nerdy guys. We thought, hey, let's just go talk to some small businesses in and around New York. And that's kind of what we did in our off time. Over the weekends, we would just kind of go around to small business owners in the city and talk to them about what their biggest pain points were related to purchasing. And it was kind of just more of an intellectual curiosity at that point, but we just kind of found that to a man or to a woman, every single person told us that purchasing was a nightmare for them. And across all these different small businesses, whether it was, I don't know, like a food processing company or some brewery or a restaurant or what have you, everyone had a huge problem with finding suppliers, managing their purchasing, paying their suppliers.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Yeah, so that's a good question. I mean, the original genesis of the idea for Connect actually came when my co-founder and I, so my co-founder's name is Rui Ma and we've been friends for, I guess, going on 10 years now, which is kind of scary to think. But we kind of met as interns at JPMorgan way back in the day. After we graduated, he went to go work at a consulting firm called Oliver Wyman here in New York, and I went to go work at a quant hedge fund called AQR. And we used to kind of always brainstorm about different things that he was working on. Obviously, he would never reveal the names of his clients because, you know, that was totally secret. But anonymously, he would tell me all the projects he was working on. One of the most interesting things he used to work on at Oliver Wyman was helping Fortune 500 companies with their purchasing, helping them to improve how they found vendors, managed purchasing, got quotes on big projects. You know, we saw this thing about, okay, well, obviously Fortune 500 companies.”

    2016-10-07 · The Twenty Minute VC · 20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek · IDENTIFIED FROM THE TRANSCRIPT · source