Here’s why startups and VCs should be interested in the WebEngage Startup Program
Indian startups raised $23 billion across 1,000+ funding deals in nine months and witnessed 33 new entrants in the coveted unicorn club, according to a YourStory report. We are in a unicorn boom. And alongside, there’s also an IPO-frenzy with large startups filing to go public every other week.
While there’s a lot of euphoria about the liquidity and the access to funds, seasoned entrepreneurs and investors are sounding a word of caution and advising startup founders to use the capital available to build resilient businesses that can outlast a funding downturn.
Building an enduring business
Reports suggest that 90 percent of the startups fail in less than five years, predominantly because they run out of capital. Newly funded startups often scale up spends aggressively via competitive bids on Meta (erstwhile Facebook) and Google to acquire new customers. However, without an eye on retention, this can quickly become a growth nightmare because all the gained customers will only be replacing the lost customers, not resulting in net growth despite substantial spends. The rush to drive up valuations and become a unicorn can distract founders from building robust businesses, making them scale up before achieving product market fit and in that process, hit the end of the road Several former founders who’ve had to shut down their dream ventures would testify to the fact that a big reason for their end of runway was inappropriate allocation to marketing and growth spends.
Frederick F. Reichheld and Phil Schefter of the Harvard Business School said that increasing customer retention rates by 5 percent can increase profits by 25 percent to 95 percent. Bhavin Turakhia advises that high retention along with the high NPS, product market fit, and low CAC are the prerequisites to scaling, if you want to build an enduring business. Veteran investor Rajan Anandan has also spoken often about the value in creating enduring businesses.
So, the adult in the boardroom would ask a hard question to the startup founder - should they be burning away the last round of money to propel themselves to the next one as quickly as possible or should they be looking at that money as possibly the only money they’ll ever get, and build the business accordingly — to thrive irrespective of subsequent funding. And it’s common knowledge that money is easier to raise when you don’t really need it.
WebEngage’s startup program is seeded in the idea that retention is a mindset and more than just a tactical term. In the early days, the founder needs to attend to several operational topics, but watching the repeat behavior of customers can tell him a lot about the choice of channels, the choice of product categories and zooming in to the customer segment that’s warming up to his offering and will likely repeat often. To be able to scale up acquisition of such customers keeping the CAC / CLV equation intact is the holy grail of startup life.
As a product,offers a single dashboard with the full retention stack - unifying customer data, pushing it across several engagement channels with 1:1 personalization. The program will help startups improve engagement, lay strong data foundations, drive actionable insights, increase repeat orders, understand customers better and boost the stickiness quotient. In short, it will help them increase chances of finding the path to aggressive yet sustainable scale up.
The first season of the WebEngage Startup Program saw applications from over 80 startups across India, South East Asia, Middle East and Latin America. These startups include well known brands such as FamPay, Mudrex, Bare Anatomy, Phool, Air Black, Crejo, among others. Around 25 percent of these have already raised subsequent funding and some like FamPay have seen breakout success.
More than free credits - what sets WebEngage Startup Programme apart
There are many startup programs being run by biggies like Google and Amazon - where the participants get a certain number of free credits. WSP 2.0 is more ambitious and aims to make a bigger impact. Fifty startups from across sectors like E-Commerce, D2C, Marketplaces, EdTech and FinTech will get:
- Free access to WebEngage’s retention stack suite for six months where they can set the right data setup, and setup automated and 1:1 personalised omni-channel journeys over email, SMS, Whatsapp, push notifications
- Credits worth US$ 25,000 including email and SMS
- Be invited to exclusive deep drive masterclasses on topics around performance marketing, branding, PR, Retention Metrics, Key Dashboards, Team Building among others
- Get access to a dedicated success management team that will help fasten their learning curve while advising on the strategy and tactics of setting up the first campaigns and dashboards
- Join the WSP community of founders while exchanging notes and lessons with others in the similar journey.
- Going an extra mile, the program management team led by Nitya Shah, supported by Ankur Gattani, VP of Growth and Marketing, WebEngage who’s himself a retention marketer, will provide all possible support to the founders viz inputs on growth strategy, access to investors, vetted partners for services like performance marketing, PR etc.
The program is best suited for B2C Startups that are:
- Operating in Ecommerce, D2C, Edtech or Fintech sectors
- Incorporated after 31 March, 2018
- Have raised between seed and Pre-series A round of fundraising
Why should VCs care?
Early-stage investors today are splitting time between raising their next fund, managing compliances, trying to support and monitor their current investments, helping selected ones raise the next round and several other things. Despite the best intentions, VCs often don’t have all resources and operational expertise across dimensions that startups need. That’s where, steering their portfolio companies to WSP 2.0 might just be the right ‘value add’ they can provide to their portfolio. A recommendation from their investors certainly increases the chances of startups getting into the program.
The right retention DNA is likely to play a critical role in getting the venture to achieve breakout success and deliver the best outcomes for the investors.
Hear from the beneficiaries
Kush Taneja, Co-Founder,says, “At FamPay, our core mission is to connect teenagers’ money to their experiences and help them learn personal finance. The WebEngage Startup Programme helped us target and engage with our users effectively, provide delightful end-user experiences, and craft healthy, long-term relationships.”
Ankit Agarwal, Founder atsays, “By enrolling in the WebEngage Startup Program, we've adopted a growth marketing approach that shall help us scale our business faster and bring down acquisition costs over time.”
WebEngage is taking a strong philosophical stance around building a robust and enduring business. The new edition of the startup program is a testament to the company’s commitment to help the ecosystem evolve and helping more startups become resilient, successful businesses. If you truly want to build for the long haul and add resilience to the company’s DNA from the early-stage itself, this program’s not to be missed.
The entries to the WebEngage Startup Program 2.0 close on 25th November, 2021. Shortlisted startups will hear back by 30th November, 2021.
(The author is VP, Growth and Marketing, WebEngage)