At today's roundtable, we had an unusual amount of discussion on ERP startups. Given that ERP is such a mature market, the fact that all this startup activity is going on in ERP is a bit puzzling to me.
Surjith Singh from Chennai, India, pitched Rural ERP, a business that intends to focus on supplying rural Indian small and micro businesses with local language ERP systems. While there are 30 million small and micro businesses in rural India, according to Surjith, and only 5% of those know English, there are substantial barriers to selling technology to these companies, including the fact that computer knowledge and Internet connections are both quite low in this segment. Hence, building a local language (Tamil, Hindi, Bengali, Punjabi, Marathi, Gujrati) ERP SaaS business will be an uphill task.
The company, however, has a small ERP product plus customization services business which currently generates $36k a year, on track to do $50k this year. The 20 customers for this business are urban businesses in Tamil Nadu, and one of them had some local language needs coupled with the regular English ERP functions.
The strategy for scaling this business needs to be completely rethought. Building a rural ERP company is going to be an uphill task, and I am not convinced that Surjith should follow that route.
Next Sudhendra Seshachala from Houston, Texas and Bangalore, India, presented SmartERP, catering to the domain-specific needs of textile companies in India. Sudhi also has a professional services business that generates $200-250k a year, and is currently financing his forays into ERP. The textile ERP business is in validation stage with a couple of paying beta customers, and Sudhi needs a strategy to scale both.
My assessment is that the textile industry in India is also extremely backward, so the business model that would work for that sector is more a managed services kind of solution as opposed to a regular software or SaaS model.
Then Adarsh Patil, also from Bangalore, India, pitched Patient-Help which is toying with two different, albeit related ideas: (a) a doctor-patient marketplace for India (and potentially other markets where the insurance industry is less mature than the U.S. or Europe), and (b) a marketplace for medical tourism. The latter is what he has started implementing, and it has a business model of generating leads via PPC advertising, followed by selling those leads to hospitals and medical service providers.
Adarsh has a crucial decision ahead of him: which of the two businesses is he going to pursue?
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 on the following dates:
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Cane field photo from RDPixelShop