Hi, I'm Lori Rosenkopf, and I'm the Vice Dean of the Wharton undergrad division and I'm also a professor of management there. I have two guests with me today, Pranshu Maheshwari and Yash Kothari, they're both 2015 graduates of our program at Wharton and they've founded Prayas Analytics. Guys, it's great to have you here with me today. >> Great to be here. >> So tell us what Prayas does. >> So Prayas Analytics helps brick and mortar retailers better understand customer movement inside of their stores. So what we do is we pull existing in store security camera footage, we built software that analyzes that camera footage, and we tell retailers what's happening with customer movement inside the stores. So how long are customers spending in certain products. Or how are they moving to specific sections of the store. And then what this helps retailers do is ab test and run experiments to improve those metrics. >> There's a lot of technology embedded in this. Where'd you come up with the idea? >> Well it started with a general hypothesis. That we have a lot of data in the online world and we've made a lot of good use of it, but that data hasn't been able to come down to the offline space because of the challenges with data collection. Our broader vision with Prayas is to generally quantify the offline world, and to try to bring in metrics to everything that we do in the offline world for the way we've been able to online. >> So, bringing the idea of metrics to your own work, how did you know or when did you know that this was actually a good idea that was worth pursuing? >> I think it started pretty early on. We had this kind of initial hypothesis like Pranshu said. And then what we did was we just started talking to a lot of people in different fields, specifically in retail. And so you'll be happy to know we reached out to a bunch of different Wharton alumni and we asked them, hey, can you tell us a little bit more about your industry? Can you tell us about how you're collecting data in e-commerce? How are you collecting data in the offline world? And just getting a better understanding of the problem before we pitched a solution. And then we went to them and said okay, what do you think about this? And we found that they were really excited, and then we started going into selling to potential customers, getting pilots, and seeing how they responded to it. >> I remember hearing that in the early stages, you have the security footage, and you were basically doing this by hand, it was a little bit of a Wizard of Oz thing, going on. Now it's more, sophisticated. Tell us how that transition happened. >> It made a lot of sense to prototype initially, without using software. Because what we needed to find out initially wasn't, can this be done by technology, it was do people want to buy this. And to validate whether people wanted to buy this, we didn't need to validate the technology. And so, that's why the first thing we started doing, was just doing all of the security, the process of analyzing the security videos, by watching the videos ourselves. Which is not fun, but it was necessary because it gave us a lot of good ideas about how to do it with the software. And so once we validated that people actually want to buy this product, that's when we started building the software out. >> And I think just in general, we did know, even when we were doing manually and spending hours just going through the footage ourselves, we had done enough research where we knew a technology solution was possible. So we've always thought of ourselves as a tech company right from the beginning. And of course, there was kind of this Wizard of Oz, right at the beginning, where we were doing it manually, but we knew there was a plan to automation. We knew that down the line if we had enough interest, we could make this happen. And happily, we've been able to do that. >> So, how much of your time do you spend on customer acquisition, versus building out the product, at this point? >> It's a mix, and I'd say it's 50/50 because the product never stops getting better and it's never finished. And even now if you ask me, I can think of 20 different ways to make our product better. And we will never be happy with the state that our product is in. It's always in a state of going closer and closer to perfection but never quite getting there. And so we always have to balance getting new customers with improving the product that we already have. But the good thing is that they usually go hand in hand, because when you first start your product is minimal and it can only do one thing well. But as you start developing more stuff it can start doing things and three things well and then you open up the market of potential people that are willing to buy it. So once you add more features to it, customer acquisition gets a little easier too. >> Yeah, and I think both actually are extremely linked too, right? Where, I'm going back to this customer prototyping, everything we want to do is we want to be driven from our customers. So it's from customer conversations that we understand what features we want to build and then we push those features out. So it's kind of a constant iterative process of doing both of the things at once and continuously doing them. >> So taking it back a step, you were students that were in making progress toward your degrees, you have this idea, you're starting to chase it. At what point did it occur to you that this is something you could really do, full time rather than doing the standard let me go through some recruiting process and find a job with a more traditional organization? >> It was probably about a year and a half before we graduated. And I'd say it had less to do with our success at the time and more to do with how much we enjoyed what we were doing. And we end up getting pretty lucky because we didn't end up making the money we needed to make, and we only managed to pay rent because of Y Combinator. >> Let's talk about Y Combinator. So you were a member of the cohort this summer? >> Yep. >> Many people in the popular press write about accelerators and the potential benefits, as well as the potential drawbacks. But there are many different categories. Is it because you have a class of people who were doing the same thing? Is it because you have milestones that you have to meet at certain times, is it the pitch day, is it the introductions, etc. What was your experience? >> Yeah, I think our experience was pretty strong. I think we went into it, right before graduation we got into Y Combinator and then after we graduated we obviously went there and did it. And I think there were a few different elements. I think by far the most important element for us was just the quality of the people. And so when I say that I mean one, which is a community of other entrepreneurs that you're with. I think there's something to be said about founder to founder empathy and being able to understand and go through the weeds together, and it makes you feel a lot more settled when you're going through those ups and downs. Knowing that other people are going through the same thing, and facing their own challenges. So that one thing was great. The other was just the quality of partners, advisors and mentors, that we didn't necessarily have access to. Who had seen so many start-ups in the past, where they can start seeing certain patterns and tell us hey, this is the track I think you're going down. You want to be careful of x, y, and z, pitfalls. And so, accordingly, we can kind of move around. The third I think is also just the general atmosphere of hey, every week we need to be performing. Every week we need to hit some sort of milestones or goals. We need to prove to these guys that we're doing something. And that kind of social pressure I think allowed us to do a little bit better. >> Yeah, the broader theme about it is surrounding yourself with the kind of people that will push you to do great things. And this is something we noticed when we were working as well. Which is being surrounded by driven people, drove us to do more things and do them better. And it was the same experience with Y Combinator. >> For a couple of years, you've worked together. How did you first realize you were going to become partners in this endeavor? >> Maybe you should talk about it. >> Well, you realized before I did. >> [LAUGH] >> This is like a When Harry Met Sally, I can tell! >> Totally, totally, it's a fun one. So Pranshu and I, we first really got to know each other during something called a Wharton Leadership Venture. And so we spent about a week in the middle of Utah camping, and we were the only two guys on the trip, and we started getting along really, really well. That summer, I started getting a little interested in tech and entrepreneurship, and so I was starting to think about starting a company or something along those lines. But we were just talking and just getting along, and I remember thinking to myself, wow if I could just work on a project with this guy for an hour a day that in itself would be a huge accomplishment, I would be so grateful to be able to do that. So what happened is we came back and this was about finals week and I reached out to Pranshu, I'm like hey Pranshu what do you think about just working on something? Let's just commit like half an hour, an hour a day on something and see where it goes. And Pancho was like, hey, I'm in a middle of directing a play right now, but as soon as I'm done let's do it. And that was kind of the original star, right? We just really got a long as friends and socially and then we were like, okay let's start working toward this and in an overtime we started, we've invested a lot in the relationship. I think that something we really thought about early on as investing a lot in understanding each other and trusting one another and aligning on our values and that's kind of how the relationship has panned out over time. >> Is there a natural division of labor, between the two of you? >> Yeah, so I do all the tech stuff, Yash does all the work with sales and relationships with people. And that just happens to play into our skill sets and what we enjoy more. Yash likes people, I'm not a big fan of people. [LAUGH] And I really like getting my hands messy with the numbers, so that's how that ended up working out. >> Mm-hm. And at this point is it still the two of you, or have you had to bring anyone else in? >> No, it's still the two of us. And we've been conscious of that, because even though we've raised a seed fund earlier last year and we have the money to hire someone, we know that we don't need to hire anyone to get to the next step for our company. And until we get to that next step for the company we're not going to hire someone. Because if we don't make it to that next step we'll be very glad that we don't have to fire someone. >> Mm-hm, mm-hm. So lets talk a little bit more about funding. You sounds like you've made a decision to be careful spending your funds to not try to get more funds than you need. Some others might say, let's try it again as much as possible, and create evaluation on paper that looks good. Tell us more about your philosophy there. >> When we look at evaluation as an obligation and not an achievement. Because in the end, a valuation is what you have to deliver in the future. It's not what you've achieved today. And if your valued as a ten million dollar company, you're obligated in the future for your investors to get to a number that's much higher than that. And that's hard and you have to be realistic about it when you're an early stage company your chance of success are very very low. And until you can answer fundamental questions that hinge, on which the success of your company hinges you shouldn't take more money than you can handle. Less money also forces you to do scrappy things and that means being more efficient with your capital, doing things cheaper, doing things faster. And in the end, I think there's a lot of stories in the valley about where startups have gone bad because they had or the raise in the evaluation that was way too high and in the end if you're not worried so much what you're going to extract from your own company apart from enjoyment and learning, the money you raise and the evaluation you raise on that doesn't matter that much. >> Have you had to keep it at this point, and if you what motivated that? >> Yeah so no, we haven't had to make any major pivots. We've been going in the direction with the original hypothesis that we set out, which is quantifying the offline world. But we've certainly made product direction shifts and I think that's largely driven by customer feedback. And so what happens is originally we started by working with really small retailers and selling to the mom and pops around us. And we're starting deploying our solution there and we're like, maybe they're not facing this certain issues, they're not as enthusiastic or engage with the data as we would like, and so we're starting thinking, okay what's maybe a different market or a different market that we should go after with the same solution. And we go after maybe large or retailers and start servicing them and see what their reactions to that is and every decision we make when it comes to product direction is really based on what are the customer's saying, how engage are they, how excited are they by the product. And if they are really excited, let's keep pushing them in that path, if they're not let's think, okay is there different permutation or a different direction that we can go in to get them really excited about it. >> I want to ask you some questions about entrepreneurs in general. Do you believe there are particular characteristics that make people want to do the sorts of things that you've done? >> Yes, someone who just doesn't like things being the way they are and who relishes freedom and is very tolerant of risks and uncertainty. Without those three qualities, and persistence, just an unnatural amount of persistence and willingness to tolerate the low times. because entrepreneurship has been glamorized a lot in the last few years particularly. It tends to be pretty un-fun for the most part. You know, the highs are great, but the lows are very, very difficult to deal with. And so, somebody with those qualities is probably ideally suited to be an entrepreneur. >> Yeah, I think there's actually an important story here, which is, so yesterday, I was meeting with a founder friend of mine, who has started his own company, and I just felt when I was having a conversation with him and talking about the emotional ups and downs of starting a company there was that real empathy, right. I think from the outside it's hard to sometimes understand just how low those lows can be sometimes. And I remember before we even started the company, we had read a lot about how tough it was to be an entrepreneur. We were just thinking, hey that's not a problem, we're really strong. We're really resilient. We can do this. But I think when you go through it you just realize it's just that much harder. Right is as hard as everyone says it is and maybe it's that you just have to do it to really realize it. But that's where this thing of founder to founder empathy exits. With you really understand what are those real lows when you're doubting everything and you're like you just gotta pick yourself up and keep doing it. >> Tell us a little bit more about this persistence. Maybe you can illustrate with an example of something that you just had to go above and beyond what you thought you might have been humanly capable of in order to? >> Well, for us it was watching security camera videos for 12 hours a day, which is a horrible process, but it just had to be done. And it was one of those things where after you do it, you realize that you can actually fight through stuff. So that was one of the big examples for us. There's been a lot of times when we've considered giving up on it. We've had low moments that felt like there's no hope for the company and there's no hope, and it still happens. I mean it still happens in a weekly basis and I think that existential doubt that founders go through never quite goes away. Through the life of their company, but if you enjoy what you're doing enough to ignore the lows and focus on the highs, you can stick through it. >> Do you two experience the lows together, or is one of you usually able to buoy the other up a little bit? Yeah, I think it changes from time to time. I think sometimes it's really company driven lows and you're like, okay, we both feel low together and sometimes it's, hey, one person just generally feeling a little less motivate than the other. But I think in general what we really value and really now is important is being able to support systems for one another. So once in a while, I might send a slack message or a message to Pronshee and be like hey I'm feeling this way and Pronshee would respond saying hey, yeah, I've been feeling that too. But look, we've done these things, and this is the direction we're going, and kind of lift yourself up. There have been many emails I think exchanged between the two of us which are kind of like pep talks and be able to go back to and be like okay, this made you feel a lot better and made you feel kind of a little bit more confident and come kind of back up to a normal state. >> I want each of you separately to answer this question. So much is made of the role of mentorship and advisorship in this process, and you've talked about that happening through Y-Combinator, through professors, etc., but if you could, who was the person who's been the most important mentor or advisor to each of you and maybe to the company that may be two separate people? And what made them the one you would choose? >> I think both our answers were the same, so I'm going to let you start. >> Yeah? >> Because I have a second answer, too, so. >> Okay. Well, my answer. It's a really tough question. And I think, I don't want to give the answer. It depends, or there's multiple answers to it. But that's really the truth, is starting a company, there's so many different facets to it. There's kind of the emotional side, there's the actual technical knowledge, there's the product knowledge, sales knowledge. So for example on the emotional side, I would have to say my two best friends and my parents have been so important to me, right? Being able to when I come home disconnect, being able to talk to them about hey, these are the stresses I'm going through. This is what I'm thinking, this is why I'm upset. And they're like hey, just keep going, you know you got this. Or, you know, trying to just be more empathetic in that way. Then there's of course people on the technical side and a couple of people that come to mind, of course our professor who we've known for a couple of years now. He's been really supportive he's seen us kind of through our journey, seen us evolve as a company through graduation and is now working with us on a regular basis as an advisor and investor in being able to offer those insights. So I think there are a bunch of different buckets, and a bunch of different role models that fulfill different buckets. So the question's hard to answer, but there's just so many people, I'm so grateful, and it's so important to have that support system around you. Would you answer the same? >> Similar, but two qualities I think, that I've found in mentors that are really important, are a willingness to ask questions, rather than answer them, and almost just Socratic teaching, where sometimes and for most startups I think this is the case beyond the initial stages. Questions are too specific for a person to answer without knowledge that only the founders have. And so, someone looking from the outside will never be able to answer a question. The best they can do is give you perspective to make you think about it differently. And so, from that point of view, just sort of a Socratic way of looking at things. Where you ask a question [INAUDIBLE], and the second thing is brutal honesty. Just brutal, harsh honesty. Where if something isn't good you have to say it isn't good. You shouldn't pay for that and say that it's not bad. >> So those are the characteristics. Do you want to say a person or not? >> [LAUGH] There's too many. Professor [INAUDIBLE] is one of them. Professor Pete Fater, another big one of them. One of the partners of Kevin Hale, is really good. Just great at giving us feedback, so. >> So you can see over time, how you're building a broader and more diverse network of mentors and advisors to help you with that process. Any advice you would have for our viewers, who may or may not have the same opportunity to have the kind of education that you had, or to get into Y Combinator. But they're still working on their ventures, and trying to figure out how to create a network that's going to be most helpful to them. Yeah, my advice would be, I think start small. I think, when we first started the company we couldn't imaging even going to professors and asking them for regular advise or having them as regular advisors. But starting as close as who are the people around you? Who are the people that you respect around you? Who are your good friends or the people that you work with? Start with asking their opinions and getting what they have to say. I think reading a lot is also great. There's just so much content online. When you have specific questions, especially technical questions. We learned a lot about reading about Paul Graham and all of these different guys, which is completely available online. And learning through those kind of, mechanisms as well. And so, start small, and as things grow you've got a little bit more attention. I think, you get a little bit more access, and you start meeting a few more people, and you can develop kind of longer term relationships with other folks. But I think there are a lot of just incredible people around all of us all the time, it's just kind of pulling where we can find them. >> Are there other things that you want to convey to our audience about your journey, or advice about entrepreneurship more generally? >> Yeah, so my one piece of advice is, I think, starting a company is very uncertain and if you're kind of on the edge of whether you want to start a company or not, my advice is just try and take the risk and just do it and see how you feeling. You're always going to feel uncertain. You're always going to feel like you're about to dive, but just do it, take that dive, see what it's like, try it out and if you feel it's not for you you can go back and do something else or go back to your previous job. But my advice is just give it a shot because we're always are going to live in times of uncertainty and not knowing whether if something's true or not. But to be able to build something amazing I think we have to take kind of those bold risks and try and make it happen. >> You guys, we're so excited about what you've been doing. We're so proud of you, as our recent graduates. And I'm so thankful you're able to share your wisdom with us today. And I wish you all the best, and I hope to see you many more times, in many more settings. And that you have much success. >> Thank you, Laurie. >> Thank you. >> Thank you so much, Laurie, appreciate it.
