India’s startup scene is growing fast, and focusing more and more on B2B solutions. The SAP Startup Studio helps startups get off the ground – and more.
Kansai Nerolac Paints, India’s second-largest paints manufacturer, made the decision to switch to SAP R/3 in February 2000 after realizing that its legacy IT systems had lost their shine. Eighteen years later the company announced the next phase of its journey into the digital future. In February, Kansai Nerolac began deploying a combination of machine learning and Internet of Things technologies and SAP Analytics Cloud on SAP Cloud Platform – and became one of India’s very first SAP Leonardo customers.
What makes this particular deal stand out is the fact that Datoin, a small startup with just 12 employees, played a key role in securing it. Datoin is on a mission to provide enterprises with a platform that allows them to benefit from artificial intelligence (AI) and machine learning with a minimum of hassle.
Until recently, Datoin was one of the companies receiving support from the SAP Startup Studio at SAP Labs India in Bangalore, “the first internal SAP accelerator,” as Mohammed Anzy S., who has been its chief evangelist since it was founded in 2016, explains.
Customers Trust SAP Technology
Kansai Nerolac contacted SAP Sales several months ago to ask for help in streamlining its production and delivery processes and making its own sales operations more effective. SAP Account Executive Garima Khadiwala contacted the SAP Startup Studio and alighted on Datoin. Assisted by colleagues from the SAP Co-Innovation Lab, Datoin was given the job of developing machine learning scenarios and coming up with a proof of concept to demonstrate how the sales people at Kansai Nerolac would benefit from SAP Leonardo.
“The aim is to increase sales revenue and reduce the risk of losing customers,” says Monis Khan, Datoin CEO and one of its four co-founders. The paints manufacturer soon gained a vivid impression of how it would benefit from SAP Leonardo.
“The proof of concept helped build trust in the SAP technology and move quickly to closing the deal for SAP Leonardo,” says Garima.
Two weeks after the paints manufacturer had supplied all the relevant data, the prototype was complete, providing sales personnel with constantly improved analysis and recommendations about which best-selling paints to draw retailers’ attention to, whether a retailer’s credit line needed raising, or whether there was a risk of a retailer switching to a competitor.
Datoin joined 15 other newly founded small enterprises at the SAP Startup Studio in May 2017. SAP’s objectives in setting up the studio, which first opened its doors to seven fledgling startups in 2016, were to supplement its own solution portfolio, reinforce innovative thinking and entrepreneurial spirit at SAP Labs India, and foster India’s technology startup scene.
Having been selected for the SAP Startup Studio, startups receive support on technological, infrastructure, and financial aspects and are free to use a set of stylish offices at the heart of the SAP Labs India campus in Bangalore for an entire year. SAP provides the startups with mentors who have in-depth SAP knowledge and who are on hand to help them grow their business.
“One of the toughest challenges startups face is how to grow and scale sustainably,” says Anzy. “Clearly, SAP can pass on a wealth of help and advice here.”
SAP Startup Social: Creating a Vibrant Ecosystem for SAP in India
SAP Startup Social is the annual flagship summit organized by the SAP Startup Studio. With networking and evangelization of SAP technology offerings at its core, the event is the largest corporate accelerator driven summit in India. In the past, the event has featured luminaries such as Nandan Nilekani, former chairman of Unique Identification Authority of India (UIDAI) and co-founder of Infosys.
Leveraging SAP Platforms
With its focus on enterprise data and AI, Datoin is profiting from this trend. But whatever their chosen domain, all startups have a tough time gaining access to established companies, says Monis Khan.
“The SAP Startup Studio opens the door for us to speak to these companies – including some of India’s ‘big guys.’ When they see that SAP is backing us, they respond to us in a very different way; they trust us,” says Khan.
India’s startup scene has grown rapidly in recent years. Numbering around 6,000 companies, it ranks among the top startup ecosystems globally. When India’s startup scene first emerged, its main focus was on B2C business. Flipkart, the country’s answer to Amazon, and Ola, a rival to Uber, are two prime examples.
Now though, startups are springing up increasingly in the B2B sphere. According to the National Association of Software and Services Companies (Nasscom), the increased interest in B2B solutions is also linked with the advance of new technologies such as AI, the IoT, and blockchain.
Adarsh Kumar, CEO and co-founder of TagBox, agrees. His 14-member strong startup develops solutions that combine IoT-based monitoring, advanced analytics, hardware, and software to make companies’ supply chains more reliable. For example, TagBox prevents the cold supply chains relied on by pharmaceuticals companies and manufacturers of meat and dairy products from being interrupted, and ensures that glass manufacturers’ products are not broken in transit.
“As part of the SAP Startup Studio and with support from the SAP Co-Innovation Lab, TagBox can work not just with companies in India, but in the whole of Asia, and even in North America,” says Kumar.
And, he adds, SAP offers access to customers’ ERP systems. “By linking up the data our sensors collect on temperature, humidity, vibration, and so on, with the ERP data, we can carry out a root cause analysis of any issues in the supply chain, right down to packaging unit level,” says Kumar. “And that allows us to identify solutions at an early stage.”
SAP also profits from the cooperation. Firstly, TagBox has ported all its technology to SAP Cloud Platform. Secondly, in addition to receiving transaction revenue, SAP benefits from revenue-sharing models offered by TagBox in return for gaining access to new customers via SAP.
Plenty of Freedom
Kumar confirms that companies are showing a growing interest in B2B solutions from the startup scene. Just like his fellow entrepreneurs from Datoin, the TagBox CEO is delighted that SAP is focusing on this particular segment and that it gives the startups it supports plenty of freedom. In contrast to the situation at competitor incubators, entrepreneurs in the SAP Startup Studio are not under obligation to deploy SAP technology – though most of them now do. And the startups retain full rights to their intellectual property.
The incubation period of 12 months, combined with an alumni program, gives the startups plenty of time to develop their business ideas further and to grow their companies. Because of this approach, Niki.ai, a startup that was part of the initial batch of SAP Startup Studio participants, received funding from SAP’s own SAP.iO venture program.
Being close to other young entrepreneurs in the SAP Startup Studio also helps. “Interacting with SAP and the other startups has taught us a great deal about how to master the challenges of scaling successfully,” says Datoin’s Khan.
That’s why he, and TagBox’s Kumar, are confident that, with backing from SAP and through cooperation with customers like Kansai Nerolac, their businesses will become well established. Neither of them wants to see the “mortality rate” for startups increase. According to Nasscom, that figure was 35 percent last year in India and thus significantly lower than the global rate of 80 percent.
SAP Startup Studio: The Journey
Since its inception, the SAP Startup Studio has provided promising early and growth stage startup companies with opportunities to mature and expand their businesses in a safe, nurturing environment. As part of its 12-month program, the studio offers a range of services, including deep dive and technology mentoring on SAP technologies, co-innovating with SAP, and dedicated market access through the SAP customer ecosystem in India.
The key differentiator of the program is that it helps startups identify the SAP product fitment and provides them with an opportunity to interact with the SAP sales force in India and “thus create a path for scaling up of their solutions through an approach of joint go-to-market,” as Justin Paul, who has been program manager since it was founded in 2016, explains.
In addition, through various community events such as Startup Saturday and storytelling, the employees at SAP Labs India are exposed to the world of entrepreneurs and gather key insights on how to transform an idea into a full-fledged product. Most of the participants in these events take an active part in the SAP.iO Intrapreneurship program and have gained substantial success in taking their ideas forward. The program has thus played a pivotal role in shaping SAP’s internal culture of innovation.