 We welcome you all to the session Demystifying Operational Efficiency for Startups by Gautam Brighay. Driven by his passion for programming, Gautam co-founded Josh Software with Sethupati Ashokan in 2007. Gautam, who still quotes religiously, leads the India-based Josh Software brand across the world, apart from being involved in delivering web solutions for client partners of the organization. With more than 22 years of experience in the industry, he has handled a wide array of profiles that have helped him build sustainable and high-performance tech solutions. Without further delay, over to you, Gautam. Thank you. Thank you. Hello, everyone. And operational efficiency is the keyword here. But when you talk about operational efficiency, how do you put it in layman terms? In layman terms, people talk about your business should be so efficient and so well organized that you can sit on the beach in the Bahamas or in Goa and it's business as usual. Well, folks, that's exactly what I'm doing. The shirt that I'm wearing is not because I was told to dress well because this is the Goa dress. I'm actually in Goa at an offsite for my company and I couldn't let narration down, so I said I'll definitely take the call because our systems are pretty operationally efficient. But getting back to the topic, it's not about just about operational efficiency startups. It's about scaling a startup operationally well. Now, a quick, I mean, I've already been introduced very well. This is a quick slide about Josh and the stuff that we do. Over the last 15 years, we've been working in various open source technologies. We've been working in various different languages. We have about 450 people in our company right now. Some working out of Pune, some in Bangalore, some in Dubai and some even in the US. We have a clientele across the world, so we are not dependent on any one single economy. But we believe in the freedom to create value. The freedom is given to all our employees to do things well. Freedom is given to our sales team to choose properly. Freedom is given to our customers to come back to us with feedback. Freedom is given for the founders to even speak at conferences, freely sharing information, ensuring that the ecosystem grows. I'm a published author in Ruby and Go, and I love speaking about entrepreneurship. And especially when you're in Goa with a beer, if possible. So moving on, it is traditionally very easy to just say that any technology enterprise is either a product company or a service company. And when you're a product or a service company, apparently, there are different success criteria. So if you're a product company, you're looked at how quickly you are scaling up in number of users. How if you are a subscription based product, then what is your ARR? How are you managing data? What is if it's an API based thing, it's about performance. It's about how far you do, how well you do, how many customers you're doing, how far you can scale. And unfortunately, or fortunately, it's all about money and raising ground. Founders typically go around in circles, getting up one round after another because it's all about intellectual property. It's about perception. It's about gaining that kind of scale. A services company, apparently, is determined by only two things, your top line, bottom line. How many employees do you have? How much business are you doing? How happy are people? How enjoyable it is? Your hiring is a big pain point as well as a boom. But you know what? These are two types of companies. In my personal opinion, everyone keeps asking themselves, am I a product company, am I a services company? I truly believe that there is no such distinction between companies. A product is only as good as the service it provides to the people using the product. And a service itself is a product offering. So you have to be polished, you have to be efficient. And all this is achievable only through operational efficiency. Now, I digress a little because you may have been seeing all these images in the background. Here's an interesting tidbit for everyone. All the images in my presentation are a pun on the word scale. So you'll see fish scales, you'll see different types of scales right now. This is like a crazy footage of spoons looking like a fish. But you'll enjoy the word scale. In every slide, you'll see something like that. OK, back to the topic on hand. Operational efficiency goes about in three different areas. One is ensuring that the operations are unwell. One is about having data and having the data which makes a lot of sense and financial control. We'll take these one by one. If you're scaling a business, you need to ensure that your business information systems is all in place. Now, rather than using out such big buzzwords, all of y'all would be using at least three or four of these different collaboration tools for business. I'm not here to sell anyone. I'm not here to endorse any one of them. Unfortunately, there are a few players in the market only, especially like Google and Microsoft. I'm pretty sure I'm very, very sure in fact that almost 90 to 95% of the people who are listening in or seeing this talk right now, probably either using Google Workspace or Microsoft Teams and the new kid on the block, Zoho has also entered the market. But you know what? I have a problem with this. I have a problem that not only is our data with all these players on their cloud and their infrastructure, I don't have control over the pricing, over how I want to structure, how I want to scale my business. So if you are a company which is going to, you're very sure that your company could be a product or could be a service is not going to scale over 500 people go with these enterprise clouds. Absolutely fine. You will be paying as you're paying on the go cloud works. If you are already in a company above 3000 people, then you already have a big budget. You already have settled on the enterprise cloud. In fact, the Googles in the Microsoft will come to you saying, you know what? Tell us what you want. We'll structure it properly. Problem though arises when you start integrating with third kind of third parties like maybe Slack. Slack is not going to very easily tie in with Microsoft Teams and Google and most developers will probably want to be on Slack or you want to use different tools and single sign on might not always be provided. Not easy integration through things. If you are a company in between 500 to 3000, what do you do? The community edition is not going to be good enough to scale. The enterprise edition becomes increasingly expensive, almost fivefold or a tenfold. And you're putting all your eggs in one basket. It's not easy to switch from a Google to a Microsoft. It's from frying pan into the fire because the offerings are almost there. It's a price war. And the price war is not being played by these two companies to retain you. The price war is being in to ensure that you cannot get out of them. So at one particular stage, you might get discounts from 300 to 500 and 500 to maybe 800, but it cannot go on forever. Unfortunately, this also is the rope that is being provided to you to hang yourself. You cannot get out of it. So do you accept this reality? Do you accept it that it is a make or break for you? I'm not here to save the world. The cloud hybrid approach does it using open source. Now, I'm not again endorsing any product here. We've personally switched over to NextCloud now. We've been using NextCloud. We have built an entire PUCNLE explaining in short how we went about it. But this gives me complete control. All the features that are available in Google Workspace or Microsoft Teams or Zoho are available for me here. This helps me keep more control. It helps me build in my own workflow, my own authorization, my own control for where, how your data gets stored everywhere. And there are plenty of tools like this, which will allow you to look into the dashboards of photos, activities, calendars, everything. They will have their own collaboration tools where you can collaborate on data. You can see different versions of the document. You can have chatting, inline chatting, conferencing webinars, calls. Everything is available and you control. So these are not based on number of users. This is on your own infrastructure. So how do you go about this? One, evaluation and figuring out whether this is your cup of tea or not. We did a proof of concept for almost six to eight months on a separate domain, trying to see whether it suffices for our needs. The thing that is going to create the biggest problem or the biggest challenge for you all is going to be the mail server. So if you want to do this, there is a process behind this madness. You have to do the cost-benefit analysis for self-hosted or third party. Third party is putting all your hope and prayers in somebody else's business. Or you bite the bullet and own the responsibility for it. Of course, you need to build a team. You have to have a process. But without this proof of concept, this is going to be a tough cookie. It's been done. If you'll need any help on this, I can personally help out on this. And my company can definitely help on this. At least give some guidance about what are the pitfalls that we've seen here. Or what needs to be looked at. Now, along with this, you also need very comprehensive data. And data is the movement where you're moving from people oriented to process oriented. And only when you are in a board where processes drive the business, can you call yourself operationally efficient? Ensure that you have an HRMS and HR management system. There are plenty of there out there in the market. Ensure that time sheets are managed. Leave management is critical. You have to have all your policies in place, which are backed by your processes. You have to have compensation benefits, a way appraisals are handled, the way people's salary increments are done, the payroll benefits, whether people are getting, whether you're using NPS or whether using voluntary pension scheme, the new things, how you save people, your employee's tax. This is the whole area in itself. And there are dedicated people and companies who do this for you. Utilization reports, who's working more? Who's working less? It's not about how much you can squeeze out of a person, but are you billing your customers efficiently? Are your is your team overworked? Are they going to get tired? Are they going to burn out? These are the factors for getting out of utilization reports. The employee life cycle management is also very interesting because you can as a technology company, you cannot be stuck in the loop of do this and keep doing it. So you have to have a process. You have to have an HRMS. You have to have your time sheets. You have to have it people wise, project wise. You should be able to churn the data in various different ways to see it. And you also need to have very good recruitment process. This is a snapshot of our recruitment process, where typically if it's coming out when we hire people, we hire almost about 10 to 15 people every month, for which we have a funnel where you have to give out that many offers and ticks that the turnaround type from putting our job description to a job offers about two weeks. And for walk-ins is one full day. Everything is automated. Spark code is a product that we build out of need. We wanted our systems to be our systems to be such that we are able to test our developers and programmers in whichever language they have, however they want, but according to our standards. So rather than going with existing tools and practices which are there outside already, we build our own system to actually test people out and give them a program. If there is a whole technology around this, where we are running into tests, we are evaluating using static code analysis, gives the developer a way to quench their thirst as well as build productivity in the company. The key word here is ensuring that we're moving towards the process so that it is more process driven and not people driven. Now, in addition to this, actually, I don't even need to get through the retention slide because there are so many different activities a company should be doing. It's not only for your employees, but also for your employee's family. When an employee's family is happy with the company, it will automatically build in a lot of retention. It will put out activities. We are currently our entire company of 400 or people are in Goa right now for annual picnic. There is no agenda. It's not an offsite. It's a picnic. People are doing what they want. I'm also doing what I want, I guess. So upscaling people is also critical. People get bored. People need to learn and whether you're a product company or a services company, you cannot just have your developers idle or going in the same boat. They need to swim in new waters. So you have to have a blended learning management system. Could it be anything from dispersed to whichever other tool that they are using in the market, any known learning management system? There has to be a way you evaluate, reward, recognize and get them into a loop so that there's a peer system where they teach each other. They share knowledge and take it to the next level. Now, while we talk about being operationally efficient, it is also critical to ensure that you have tools for ensuring access on different devices, access to different data and of course backups and continuous data protection. Again, I'm not endorsing any of these, but you should have some sort of agents which are setting up on your different devices, which will help you to locate or lock, reboot, encrypt, wipe, delete, whatever you want for these devices because they are all critical. If you're a product company or a services company, security of not just your data, your devices, your people is very, very important. Now, once we have looked at the operational efficiency, once we are, sorry, the operations efficiency, using large amount of data, this is so far so good that we are running a tight ship. The difference is finance. The management can give direction, but finance drives the company. Finance is the key part to any operation which will determine how the company is not just going to float, but is going to speed up and race. So along with the management, along with the finance, you need to have absolute data in terms of revenues, your collections, your DSO, which is days outstanding, what is the credit, how much is your customer working with you? How are your customers increasing? If you have a customer base or subscription base, is the sales team hitting the right spot with every customer? How many customers are getting into the system? How many customers are leaving? Every kind of data that you get must be put into a financial metric to ensure that you are scaling exponentially. Remember, linear scaling is easy. It is doable, but you will burn out. It's the same amount of effort that you put in. So exponential growth is critical. At Josh, we maintain a list of all these different metrics. I'm not going to get into each one of them in detail, but I'm sure everyone does these reports. The one thing that I definitely want to talk about is the cash flow sheet. A lot of entrepreneurs, especially in startups, suffer from the fact that they don't understand the difference between revenue collections and cash flow. So profit and loss is something different and cash flow is something different. I am saying this because I have personally been burnt. I'm a programmer by heart, by nature. And when I started, Josh, I did not know the difference between debit and credit. Today, after 15 years, I can look at a company's balance sheet and read it. And I do not have a formal education in finance. I have burnt and learned. So for me, it's not just about profit and loss. It's also about the cash flow, your nine week running window, which is going to give you the bandwidth to take risks because as a company, it's not just about how well the company is doing. It is also impacting lives today because of an immature, uninformed or a decision that I take based on emotions in my company could impact the livelihood of 500 families, which is almost about 2,000 to 3,000 people and their funnel below. And all this would have would impact only if I have running an operationally efficient shop with operations in check, the data in check and finance in check. So I think I'm on the last slide right now. So if we are able to do this, we will be able to achieve operational efficiency in our systems. Thank you so much for, you know, for your session. Thanks a lot, guys. Bye-bye.