Mentor Abhishek Balaria, CEO of Zentity, on Enterprise Mobility and Startups
Abhishek Balaria is CEO and Founder of the enterprise mobile solutions company Zentity, a leading developer of mobile gateways for telecoms and banks in Europe. He is also a mentor at StartupYard, and a regular at many of StartupYard’s events.
Abhishek has been working in technology for nearly 20 years, with an interest in banking, telecommunications, and mobile. He founded Zentity in 2008 to produce mobile games, and has since expanded to provide mobile gateways for some of the Czech Republic’s and Europe’s largest banks and telecom providers, along with other services like major e-retailer Alza.cz, and Novinky.cz, the Czech Republic’s most popular news portal.
Hi Abhishek, why don’t you start by telling us a little about yourself and your background.
I like to think of myself as a technologist who happens to understand a bit of business or specifically software related businesses. I was extremely lucky to have started my professional career at a startup in the early days of the Internet boom and had a dream to someday have a startup of my own.
Before starting my own business I had worked on three continents (North America, Europe and Asia), in startups and the world’s largest corporations, across various industries and with people from all over the world. I feel this background gave me a solid footing for creating my own business. I have been building mobile applications since 2000, when I first built a game for Palm Pilot.
I am married with two children and try to live a simple life.
My current focus is on mobility and cloud related technologies.
You are Founder and CEO of Zentity, which is responsible for a multitude of apps millions of people use on a daily basis. Can you tell us how Zentity started?
I have been interested in mobility since cell-phones became popular in the late 90s. I still remember when GPRS and WAP were first announced. I was also lucky to have worked at an early mobile based product startup called 12snap in Prague where I programmed some WAP based systems.
Later I went on to work for Oskar/Vodafone on SMS content based systems and Česká spořitelna where I worked with online systems. Since the beginning of the millennium we heard every year that it will be the year of mobile.
It started to seem like a real possibility in 2008-9 timeframe after Apple’s App Store was opened to 3rd party developers. So, over the years, I always had startups and mobility in my mind and when I held the first iPhone in my hand, it was crystal clear to me that this was the time for action.
So, I started playing with mobile apps for new smartphones and hired a few people to program mobile games. At that time there was no market for Enterprise mobile solutions, but the mobile games allowed us to learn the technology and were successful in their own right. In summer of 2010 it became clear to me that banking will eventually be performed on mobile devices, we called it a “bank in your pocket”.
My years of experience in banking and telecommunications allowed me to design, market and successfully rollout mobile banking products when the market finally came about. By 2011 we were on our way to become an important player in Enterprise Mobility.
Today we are a leader in mobile banking and related solutions in the CEE region, and probably in wider Europe.
You’ve designed mobile gateways for huge enterprises, like Vodafone, CSOB, ING, and Alza. Why do these big companies come to Zentity to build their mobile solutions?
It’s got to be a combination of our product maturity, security focus, technical expertise, agility, scale and references.
The enterprise market is very difficult to get into. In the early days, we won because we were ahead of the game. Nobody was thinking in terms of mobile gateways back in 2010-11. Also, we were very clear about our focus and committed to things that mattered to our customers: security, time-to-market and user experience. We have stayed true to that vision through the years.
After successfully rolling out first projects we started winning on the strength of our references. Over time we have reached a scale which is hard to replicate for others in our space. I would love to say that this was the game plan, but we didn’t know how far we can push it.
So, I suppose the formula here is, first you win by correctly timing your product market fit, then you win by scaling through reference selling and then you win because of the scale (as it becomes harder for your competitors to be faster, better and cheaper than you). All the while you have to run a tight and efficient operation.
What are some of the unique challenges in working with such large corporations, with such complex needs?
I have had a long career on Enterprise IT side of things, so to me it came naturally. You have to be aware of long sales cycles. It took us 2-3-4 years to close some accounts, so you have to be patient.
You have to work with a big sales pipeline. On the delivery side, the projects have to be managed very tightly with constant evaluation of the risks. Communication is very important. As in everything I do, I believe that it all starts with putting together the right team for the project. Half of your job is done if you have put together the right team.
Working with large corporations is not much different than working with startups in that you are always delivering a piece of software to a group of people who need it to run their business.
What have been some of your “favorite” or most important failures in the process of building Zentity into what it is today?
We probably have made every mistake in the book as we were getting started 🙂 I always tell my team that the most important projects (tenders or RFPs) for us are the ones that we lose. Every loss makes us regroup, work harder and smarter.
Also, the projects we didn’t win often come back to us because competitors don’t do a satisfactory job or for some other reason. We work hard everyday to make sure that from an operational point of view we are absolutely world-class.
As a mentor at StartupYard, what is are some of the key mistakes that you see startups making most often? What piece of advice to you find yourself giving all the time?
Timing and product market fit. Also, doing it for the right reasons. I generally lose interest when someone speaks of getting acquired or just raising a funding round. Unfortunately there are a lot of people who think raising money is the main objective.
I never discuss the idea itself, I only want the team to explain the product market fit to me. I want the team to have a deep understanding of their market, technical talent is not enough. I understand that pivots are an important part of a startup’s life and no plan survives contact with the enemy, or as Mike Tyson said, “Everyone has a plan ’till they get punched in the mouth.” But you have to let the team figure this out and not push them to your world view.
In the early days of Zentity, I was advised to open source our product, because we will never sell it. I was advised to hire a VP of sales or build bikini apps. But all I wanted to do was to build a “bank in your pocket”. It’s very important to stick with the core idea, but it will only work if you have deep expertise in the subject matter. I knew banking, so I knew what I was building.
Not pushing a startup to adopt your world view is incredibly hard. It’s something our team struggles with, and I know our mentors do as well. What would you say is the ideal role of a mentor for seed-stage startups?
Yes, it’s natural to try to comment the idea based on our experiences and beliefs. But it’s counterproductive on many fronts. First, young founders look up to you and will underestimate their own convictions, second, they get defensive about this and then you don’t discuss anything other than the idea.
You want the founders to convince you of the product market fit and that they have a deep understanding of their market. Peter Thiel calls it “the secret that you believe in.” Sean Parker didn’t change a thing in the core Facebook idea, he simply advised Zuck on how to stay in control of his own business (a whole different topic :-)) and scale it.
What has worked for me is to start with the assumption that I would never know the market and its product needs as well as the founders. Then you can start on a clean slate and may even learn a thing or two.
As a non-Czech who has adopted the Czech Republic, what are some of the advantages, and disadvantages, that you see in this market? What attracted you to it in the first place, and what keeps you here?
I will answer the second question first. What attracted and keeps me here is the love of my life, my wife and later our children.
Even though I always kind of knew that I wanted to run my own startup or company I could not have known where it would be. I believe that the fundamentals of business in the long run are the same everywhere. You have to build something or work in an area which others want enough to pay you, do it well, be straightforward in your dealings and keep things simple. I do not like complex business models or deals.
But I can share some observations of the Czech Republic compared to other places like US or India where I have lived or done business. The Czech Republic is a remarkably small market and everybody tends to know everybody, which can be an advantage or disadvantage depending on your reputation
It’s also a very young market, which means sometimes there are no clear category leaders. An older or more mature company here simply means someone who got started in the early nineties. You can find world-class technology talent. I consider all those things advantages.
On the disadvantages side, I can only think of two things. First, it’s hard to scale and secondly, sometimes it can be hard to build meaningful and mutually beneficial partnerships.
The scaling problem is understandable, given the size of the Czech market, and its incomplete integration into the European market as a whole. But why would you say building partnerships is particularly difficult here?
Regarding partnerships, it probably has to do with the fact that if you are trying to create a software product in an industry vertical you will run out of accounts very soon. E.g. banking only has about 15 real accounts and Telco only 3-4 major accounts. The partners would not have enough incentive to invest in the pre-sales of your products.
Another observation I have had is that people and companies generally don’t get the idea of specialization. They want to do everything for everyone. Again, probably due to small market size or historically this is how it worked here. In US, for example, you normally hire someone to mow the lawn, here people just like to do it themselves.
We try to overcome this by explaining to companies about the whole value chain in a vertical market and that they don’t have to do the whole stack to add value.
We have been successful with partnerships like Microsoft, locally and globally, because of the mature partner ecosystem Microsoft has built. Let’s hope more companies will get this over time.
What do you think Czech corporations and startups should do in the near future to compete on a higher level with larger markets, such as Germany, the UK, and the US?
We have been reasonably successful abroad. To compete globally you have to run a very tight world-class operation. English has to be your corporate language from day one. You have to have diverse and international talent early on.
What has worked for us is to try to scale globally once we build a solid business locally. Every global market is unique and sometimes you may have to tweak your product and communications strategy. It’s also a timing issue, you can’t be too early but you can’t do it too late either.
A lot depends on your funding situation. If you have tens of millions of dollars in funding you can try to build full global operations, but if you are growing organically you are better off finding one deal and then grow around that deal.
