Bizspeak With Amiya K. Samantaray, Founder & CEO DATOMS
Founding and fostering a company is probably one of the greatest challenges anyone could ever face, and the hardest part about it is there are no fixed rules. And one name that didn't want it any other way is Amiya K. Samantaray, the Founder and CEO of DATOMS (formerly known as Phoenix Robotix Private Ltd.). An Alumnus of the Electronics and Instrumentation Engineering batch of 2014, his passion for electronics and innate desire to storm IoT upon the world led him to build Phoenix Robotix Private Limited (presently DATOMS). The organisation established in 2015 has been able to secure great statures within a short span. It is recognised as one of India's innovative startups by the Department of Industrial Policy and Promotions as well as the Government of Odisha under startup Odisha policy. The company has been garnered several awards for its innovative products.
Operating with cutting-edge technologies, including industrial IoT, cloud and cognitive computing, big data, they have resolved to help decision-makers make better data-driven decisions. Making cities smart, safe, and sustainable, thereby improving people's lives, is their ultimate vision.
Team Monday Morning recently caught up with Amiya K. Samantaray. In his conversation, he talks about growing the company to the pinnacle, business strategies, and much more. Read on to gain insights into the same!
Monday Morning(MM): How welcoming is the market for high-end tech startups and hurdles regarding initial investment required for such innovations? Can you please share your story regarding this?
Amiya Samantaray(AS): The market landscape has changed a lot after COVID-19. It has pushed people to use technology and adapt to it. We are also optimistic about people using the Internet of Things (IoT) involving industrial automation. As a company, DATOMS focusses on Original Equipment Manufacturers (OEMs) and system integrators, i.e. solution providers. Due to a higher risk or lack of technical knowledge, the businesses that haven't adapted to technology are renovating their business models.
The startups are now focussing on selling services rather than assets. For example, if you want to buy an Aquaguard, some startups give the option of buying a glass of water. The future business models will predominantly be service and technology-driven. Technology is disrupting traditional businesses everywhere. We are also looking to disrupt the field of industrial IoT.
MM: How did you build and hire a good team in the initial phase of your startup?
AS: When someone starts up after or during a job, one has already built proper connections working with his colleagues across different teams. As I started just out of campus, it wasn't easy to find the right set of teammates. You had to find people having the right mindset.
Initially, I reached to larger mass on campus by putting up posters in hostels and appealed to them if they were interested in living their dreams, doing something different. Some folks were interested, and it followed a discussion. Those people are my co-founders and core members now.
Most of the enthusiasts were new to me. However, I knew a few of them thanks to the vibrant club culture at NIT Rourkela. At that time, I was even the president of Cyborg, and the club was instrumental in bringing few members who are core members now. We kept the correct legacy from the beginning. We have all Cyborg presidents from 2014-18. We always look back to the alma mater for team building.
I didn’t offer them any money at the beginning because I didn't have any. Instead, I offered them a dream, a passion, a big opportunity they could live on. It was definitely a difficult journey. However, the grind has paid off today.
MM: How do we know whether our idea is good enough or not, specifically when we want to provide a service?
AS: The viability of an idea is more important than the idea itself. A startup or service is not about the idea always. One should be ready to make changes concerning the market. One has to understand the needs of the customer. That's where most of the startups fail. They don't have the right product-market fit. If one doesn’t understand the market, the idea is worth nothing.
Is the market size big enough for an investor to hop in? If I start something, are there any buyers? If I don't understand this, my business could eventually fail. We should talk about the validation and scalability of the idea and if people are ready to pay for it!
MM: Was the seed funding of $700k you raised in November 2020 through convertible debt or pure equity? What advice would you give the young startup founders who are eager to generate funding?
AS: The funding depends on the stage of the startup and its type but equity is always valuable. Funding involves Smart and Dumb money and Free money money. Grant (usually government-sponsored fund) is a form of free money. Sometimes the founder doesn't take the grant fund seriously and doesn’t properly execute the money. Equity is a form of smart money when you want money to move to the next level. However, it pushes you to do something which you were not comfortable enough to do. A debt is comparatively less risk of money. The type of funding boils down to the risk and growth appetite of the management body. It is your baby, and you have to decide what length you can go for your baby!
MM: What was the revenue of the company and year over year growth over the last three years?
AS: We have clocked near to a million-dollar revenue before COVID-19 and have a subsequent growth of 100% over the last three years, though we faced a significant setback last year, we are expecting to clock 2-3 million dollar revenue in 2021.
MM: How did you expand your startup from a city like Rourkela, which lacks startup culture and proper connectivity to a national and international level?
AS: One of the fundamental things in buildings startups is to grab every opportunity. And, when it comes to Rourkela or any tier-2 or tier-3 city, you have limited opportunities at hand. You don't get to interact with a lot of people to build your connection. So you have to leverage on very few people to create a network. A strong network is a key to success in business. Even after having a good product or technology, a company can fail due to the lack of the right kind of network.
To ease the situation, I travelled across the country, building connections. I regularly spoke to investors in Delhi, Bangalore, and Mumbai. From day 1, it was clear to me that I am not creating a product for the Indian market. My early vision was to build a product so well that it could be scaled to global levels. A lot has changed in the past year. Virtual meetings and deal closings have become normal in business, thereby decreasing the need for travel. It also implies that the difference between the different tiers of cities is reducing. It can be said that we are moving towards an ideal world where one can build and market an international level product from the comfort of his/her home.
Illustrating this is the example of the noted billionaire business magnate, Mr Sridhar Vembu, the founder and CEO of Zoho Corp, who runs his business from Tenkasi, a village in southern Tamil Nadu. Visionary leaders like him have proved that a multi-billion dollar company can be built while being rooted with our villages in the digital era.
I advise everyone to always explore new options and to be open to build connections wherever and whenever a chance arises. Because you never know which connection will take you to the next big league.
MM: What would you suggest to choose, go and talk to a person who is already in this sector and has achieved success or take public opinion on the service you want to provide?
AS: While validating your idea, the customer's opinion must be prioritised above everything, a specialist may validate your idea, but you can't be sure that they understand your vision entirely as you do. So you need to consult with the person willing to pay money for your idea or service. Knowing and understanding the persona is essential for any business. Also, make sure that you understand the demographics of the people you talk with.
MM: Can you run through the technical process of fundraising, and how was the company valued like? What KPIs (Key Performance Indicators) investors took note of for a high-end tech company like yours?
AS: Initially, till the seed stage, investors look at the team; they make sure whether or not the team can deliver its promises. Because ideas may change with time but what matters is the team's execution and efforts. It is one of the reasons why people tend to invest in startups by IITians or IIMians because they believe that their team can deliver. It might not be the only judging criteria, but most of the time, investors do look at the team's capability.
The second important thing is whether the idea and the market are big. Large startups valued at multi-billion dollars operate in markets where the opportunity is many folds more. If you are operating in a market where the market opportunity is 100-200 crore, you may get up to 2 rounds of fundings. Thenceforth, there is nothing much left for the investor. So the size of the market matters to investors.
Investors look to diversify their risks while investing in startups. They follow different methods and statistics for valuation. Investors consider existing companies and compare your scenario with them and then come up with the numbers. It is also a subjective thing. And it isn't easy to get to the right point.
MM: What hurdles did you face while grabbing seed funding and grants?
AS: To keep an eye on the start-ups regularly, most investors want to invest in start-ups in their territory or geography. People invest in their nearby locations to understand the business growth and changes in business dynamics on the micro-scale. Since we were operating in Bhubaneshwar and Rourkela, it seems challenging as the eastern part of India does not have a good start-up ecosystem. For e.g., If an investor is in Bangalore, he/she will prefer to invest in Bangalore or Karnataka; as a result of these scenarios, start-ups out of the smaller cities will face challenges. I believe a good ecosystem can confer a better opportunity to grab the attention of investors.
For me, the eastern part of India is like a desert where we are trying to find an oasis, which may or may not quench our thirst. Sometimes, these challenges have an advantage, too, as you will be focusing on optimising your revenue and creating a more customer base. If we consider a tier-1 start-up, they raise fund before they generate revenue or find the customer, which leads to failure after the 1-2 stage of funding. So, we have used our difficulties to our advantage by focusing on finding the right customer, tuning the business model, and building a suitable team.
MM: Who are your biggest competitors, and how do you differentiate yourself from them?
AS: Since every company is talking about Machine Learning, Artificial Intelligence, and the Internet of Things, it has turned into a very crowded market. So, our prime concern is the segment of people whom we serve. We are very much focused on the OEMs or the System Integrators because we strongly believe that start-ups like AWS, Flutura, Altizon, Infinite Uptime are very sector-specific, and these companies do not solve the fundamental problem, the technical barrier. When a legacy company needs to automate or improvise a product line, launch a smart product or adopt IT, they consider it a risk, as they don’t have an IT team. In our case, we are eliminating IT, and it has to be a simple onboarding process where one doesn’t need to understand the underneath technology; rather can use it as a mobile app.
So, we are trying to create an IoT solution like WordPress, where people can choose the template and get the solution. As there is no such platform available now in the market, we are very specific to the domain and the customer set.
MM: What kind of person will succeed at your company; is there a skillset one should already be working on developing?
AS: There are two kinds of mindset while hiring in a start-up. First one, we want people who should deliver on time and under pressure. So, they should be enthusiastic and dedicated to what they do. Whenever we hire anyone in our company, we search for the passion that he/she displays towards the task we are offering him. While hiring freshers, we check if the person is really interested in working in the team or joining to learn and gain experience to pursue any higher studies. Otherwise, we look for people who have deep experience in a shorter time period because they are quick-learners and have the capabilities of multiple platform and technologies, defining him/her as ‘techie’. Since adaptation is the key for a start-up, we want people with multiple hats, skillsets, and the quality to change with the adverse situation.
Since we are a small team, we don’t have many people to take the responsibilities, so we want people who take responsibilities on the first day to deliver on the customer promise. We also conduct a cultural fit test to check if the person is suitable for our kind of mindset. He/she might have all the skillsets, but if he/she is not fit the culture of our company, then we should not hire him as it will backfire and lead to the resignation of multiple employees in the future, which we have already experienced in the past!
MM: What has surprised you in your journey till now?
AS: I have observed that the coming generation either doesn’t understand what they expect or know a little before talking about the big stuff. So, the generosity is missing somewhere. The future people are neither caring about their own dreams nor others, they don’t follow fundament ideas or thoughts, which shows their fickle-mindedness, and I don’t understand why it is happening. Maybe we are in the transition phase, and after some time, everyone will evolve. There are some people who don’t even know what they need to do after they graduate! This has surprised me as many of us are trying to explore more and more, which is a good sign, I think!
MM: What does the future look like for DATOMS? What’s next in the investment, expansion, or growth plan?
AS: Presently, we are expanding to Africa and Europe as the business expansion. We are also trying to open an office in Singapore to expand into Southeast Asia by 2021. We have already acquired customers in Southeast Asia, in countries like Malaysia, and Indonesia and stared working in Bangladesh too. The Southeast Asia market is good for us as there is so much similarity to the Indian ecosystem. We are also raising Series-A round by the end of 2021, maybe $5 million. And maybe we will be moving our headquarters to California or Singapore very soon.
Being optimistic, I believe our future is very good. This can be a billion-dollar company by 2025, maybe the first billion-dollar company based out of Odisha!
Team Monday Morning congratulates Amiya K. Samantaray for his accomplishments and wishes luck for his future endeavours.