Vedak YCombinator S17 Application
This is Vedak’s application which led to the final interview invite
Describe your company in 50 characters or less.
Gig platform for industry experts
What is your company going to make?
Vedak will build the most reliable platform to hire industry experts for short assignments. Currently industries have difficulty finding right experts at right prices to solve specific problems. E.g. Setting up of a dairy plant requires specialised skills for a short duration. On the other hand, good industry experts do not have access to quality gigs and have to rely on referrals to find good assignments.
Vedak will be a simple solution as clients will simply need to post their request and Vedak will find and assign the right experts for their needs. The matching will be done by a two-level filtration. First shortlist will be done by data matching using attributes like companies, experience duration, skills etc. Second filter will be personal interview to identify 2–3 suitable candidates for the position. Clients select and staff from this highly curated list and pay to Vedak directly for the assignment. We pay to the experts after deducting our commission
We plan to on-board a large pool of experts (including salaried professionals and independent consultants) through a very attractive referral scheme which rewards the referrer every time any of their referees does a consultation. Experts apply to interesting assignments, however will have to go through the above filtration mechanism
Comments: Most important question, it decides if the interviewer continues to read the app, Ensure you are crystal clear about the company and also cover 2–3 main strengths of the startup
Which category best applies to your company?
Marketplace
How long have the founders known one another and how did you meet? Have any of the founders not met in person?
Aditya and Ashish have worked together when Aditya was managing Fashion Services in India’s largest apparel e-tailing company (Myntra) and tied up with Ashish’s startup (www.urbantailor.in) to offer tailoring services to Myntra customers. We have known each other for almost 2 years
Aditya and Abhishek met through a common friend and worked on a remote working platform for out-of-work housewives (Zorkr) in parallel to Vedak. However after that did not work out, they decided to join hands to build Vedak. This was 6 months back.
The turbulence that a startup faces ensures only the thickest mates survive. The idea here is that founders should know/have worked with each other earlier, rather than coming together for the purpose of this startup.
PROGRESS
How far along are you?
We have launched public beta of our services and have been fulfilling orders since last 8 months. We have matched around 300 professionals to expertise requests worth around $100k (GMV). Our commission per project is around 35%.
We have just launched our website which will automate most of our manual processes — recruitment and matching
Our team is just about getting fully formed with a good balance of both tech and operations
How long have each of you been working on this? Have you been part-time or full-time? Please explain.
Aditya has been working full time on this for more than a year. Abhishek joined 6 months back full time. Ashish joined 3 months back and has written the software backend for Vedak
Aditya and Abhishek are full-time while Ashish is part-time on this. He is on notice period with his company and joining full-time in April.
Which of the following best describes your progress?
Launched
How many active users or customers do you have? If you have some particularly valuable customers, who are they?
We have around 10 enterprise clients who have bulk requirement of industry expertise and are spread globally. We are on-boarded with some of the world’s biggest consulting firms like McKinsey, BCG, Bain, A.T. Kearney etc. We also have industry tie-ups with large Indian corporates like CK Birla, Flipkart etc. The latter group is particularly interesting as we are among the first expert networks they are leveraging.
Large enterprise customers in 6 months of operation, was one of our strong points. This was validated by the partners during the interview. Don’t hesitate to brag about your strengths
Anything else you would like us to know regarding your revenue or growth rate?
We have been growing at a steady 70% growth rate QoQ in revenue since the variability of our client’s projects makes it difficult to measure monthly growth rate. We have grown at the same rate for both revenue and profit which means as we have gained newer clients, we have been able to maintain our profit margins
We have had significant recent successes in adding several major clients like McKinsey, Bain. If we concentrate on dominating with these clients only, we will be seeing a 20x growth in next 6 months in India alone
If you’ve applied previously with the same idea, how much progress have you made since the last time you applied? Anything change?
Last time we applied, we were just 2 weeks old and had a few thousand dollars in sales. Now, we have around $100k in sales and have some top-tier firms like McKinsey as our clients
The basic idea remains the same — build a platform for industry experts. However the product has changed completely.
The key learning for us was that currently working professionals won’t like to be publicly identified so implementing a masking method was necessary. Secondly, the search algorithm is highly accurate now given the insight of manually handling hundreds of orders. It considers the company, quality and duration of experience to give the most accurate results. We have also made consultant on-boarding very simple bringing into this field professionals who have never done part-time gigs
Most importantly, we understood that for B2B customers to trust us, we will have to build a highly managed marketplace with compliance and trust issues sorted out. Hence it is important to vet profiles strongly through personal interviews before assigning them
What have you learned since the last time you applied when your application or interview was rejected?
IDEA
Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you’re making?
This idea solves a personal pain point I experienced during my consulting and industry experience. I have needed to engage consultants who can advise me on industry/market or work on a problem I am facing in my role (e.g statistical analysis of customer reviews on our website). Inevitably I had to turn to outside experts but on-boarding them as vendors for short-term assignments was a big pain
I (Aditya) and Abhishek have direct domain expertise due to our consulting and research background. Our experience has helped us to match very demanding clients to experts with a very low drop-off rate.
We believe the future of work is going to be redefined in favour of consultants/experts and the companies facilitating the transactions will emerge as the winners. There is an explosion of free-lance consultants globally making a living full-time advising and working on gigs (estd 30% of total workforce in USA).At the same time, companies are beginning to favourably consider hiring part-time workforce to deal with the variability of business. E.g. PWC estimates freelancers will make up 10% of their workforce by 2020 and have launched a portal to on-board such talent.
Solving a personal pain point is almost necessary not sufficient for a startup. While our domain expertise was okay, I think we were weak in showing how people required what we were making on the demand side of the marketplace. Later on, I will tell you how even our supply fell short
What’s new about what you’re making? What substitutes do people resort to because it doesn’t exist yet (or they don’t know about it)?
We are building a marketplace which can bring millions of industry experts and career professionals into the gig economy by doing part-time consultations. Right now this is only limited to tech or finance/accounting professions. We are pricing these services at $175/hr for Indian and $400/hr for global experts
Current substitutes are linkedin searches however it is difficult to determine which salaried employee will be ready to do these consultations as there might be no-consulting clauses in their employee agreements
Another, very expensive option, and out of reach for most companies are expert networks like GLG, Thirdbridge etc. Most companies outside top consulting firms don’t know about them
Who are your competitors, and who might become competitors? Who do you fear most?
Toptal is a strong competitor though mainly restricted to tech and finance fields but might venture to business consulting pretty soon. Catalant (earlier Hourlynerd) has a focus on general management consultancy and vets candidates mainly on their pedigree and experience.
Linkedin is obviously in a dominant position with access to massive data and should be the most feared, however they don’t seem to be thinking of a large play for gig economy (their pro-finder has been on trial for almost a year) and are focussed on recruitment and sales solutions.
We also have expert networks like GLG, Coleman Research which custom-staff for short assignments but they are very expensive and out of range for most industries/companies
We fear toptal the most given their vast experience and the managed marketplace model they have built for tech and finance.
What do you understand about your business that other companies in it just don’t get?
Business consultations are fundamentally different from other freelance consultations like tech, finance, legal etc in that each project needs to be individually vetted for the adequate profiles. At the same time, the scope of requirements is very wide so one needs to have access to a vast pool of consultants — part time or full time.
For business consultants, building a full-time freelancing career is hard since they have narrow specializations. For e.g. a dairy production expert will usually not be well versed with dairy markets and vice versa. Hence it is very difficult to find good independent consulting talent as in tech, so starting out with a small pool of highly curated experts will not give desired revenue to sustain and grow
The only players who custom-recruit for individual projects are expert networks like GLG however their processes are very manual and expensive leading to consultation rates of USD 1000/hr. This can be brought down using technology and referrals to USD 175/hr as we have managed for last 8 months.
I think we had nailed the fundamental difference about business consultations vs tech freelancing, however the way to scalably address it was non-trivial and we couldn’t solve it. To my knowledge, none of the competitors have found a scalable way of doing it, some problems, I guess are meant to be and are not painful enough for many people.
How do or will you make money? How much could you make?
(We realize you can’t know precisely, but give your best estimate.)
We estimate the global market of industry experts to be around USD 136 Bn annually. According to various estimates, around 55 Mn Americans are freelancing now earning USD 1 Trillion annually. If we assume, around 10% of Americans are industry experts doing one project every quarter at order size of $20000 per project, US market size is around $80 Bn. This is also borne out by the number of professionals in US listed as independent or freelancers on Linkedin with operations experience
Rest of world is estimated to be lesser than US market given lesser propensity in other countries for experts to freelance. Most in India, China etc prefer stable jobs. Estimated market size is around USD 56 Bn. The freelance numbers on Linkedin also bear this out, however lesser number of professionals are on Linkedin in these countries
Important to note, however that while gig economy is becoming mainstream among the population in US (around 40% workforce expected to freelance by 2020) and among startups and small businesses, the enterprises have not yet taken this up in a big way. This is bound to follow and will be a multi-trillion dollar opportunity
If Vedak can capture, let’s say, 5% of the global market at 15% order commission, we are looking at a billion dollar run rate annually
Important to do bottoms-up analysis as illustrated above
How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won’t be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?
We were focussing on a small customer set (consulting firms) and were differentiating on quality and price. We have 10 active clients and 10000+ experts with us in our database. Last month, we have started placing consultants in high value short-term consulting contracts and the feedback has been very positive
However now with our product coming online, we will build a large supply base rapidly and aggressively sell short-term consultants to thousands of companies across India. We will be on-boarding across the board but will focus on some specific areas like healthcare, education, renewable energy where we are seeing significant traction.
To make the platform truly self-sustaining and keep this large user base engaged, we are building a very rewarding referral system. So even if someone is not qualified to take a particular consultation on our bulletin, they can refer/recruit a qualified person on their network to work on that assignment and get commission from the same
First do things that don’t scale, illustrate how with the changes, we will be able to address the problem on a much bigger canvas
If you had any other ideas you considered applying with, please list them. One may be something we’ve been waiting for. Often when we fund people it’s to do something they list here and not in the main application.
Hacker-rank for business professionals. There is a growing demand for generic skills like structuring, analytics etc at middle-management levels in all companies. However in absence of good screening tests to test these skills, companies have to filtering from top schools and interviews which is very expensive. Building a hacker-rank for business professionals can help in democratising access to these coveted middle-management jobs.
These tests will have to be adaptive and mirror the case approach used by consulting firms which are the best way to test structuring and analytic skills
This can show your creativity, think hard about these and some other similar questions like “Last time you hacked a non-computer system”
