CHAUSAR- ROUND 1: GUESSTIMATE

Gaurav Sharma has been a techie, a management consultant and a digital marketing guru over a
20-year career. Rajiv Kumar has been a recruiter, investment banker and PR guy. Both of them
were batchmates at IIT Bombay, who also went to IIM Lucknow, and recently connected at an
alumni event in Mumbai. Gaurav was just taking a break from being CMO of a large FinTech
company. Rajiv heads the BD function at a large consulting firm.

The IT industry in India generated exports of close to $135 bn in 2019. More than 50% of that
goes to the US, and just under 20% goes to the UK. The industry is projected to touch $350 bn by
2025.

Of the total exports from India, Micro Small and Medium Enterprises (MSMEs) constitute 48%.
The Ministry has now got a very dynamic minister, who is committed to promote this sector in a
big way.

Some of the challenges that IT MSMEs companies face in scaling up include

1) Access to clients, because of their limited networks, and management bandwidth.
2) Managing their working capital, to manage payroll every month.
3) Recruiting the right talent, and retaining them in a competitive job market.
4) Branding, both on their capabilities, but also to attract the right employees for the right
reasons.
5) Project delivery, because the founders were usually tied up in sales and client management to
spend quality time with the delivery team.

Gaurav and Rajiv both felt that IT exports by MSMEs could be a huge opportunity to tap into.
They had a large network of friends in the US and UK, who worked in big corporations that could
offshore work to India. There could be a significant business to be built by aggregating the 1000s
of IT MSME shops across India that are run by good techies, who would be interested in taking
up software development work that was not attractive enough to the biggies, typically projects
of value less than $1 Mn.

Thus, began the journey of ConnectionGuru, an eBay type of platform to connect IT MSMEs from
India with Clients in the US and UK. There would be an AI based algorithm to match project
requirements with appropriate 'vendors', an auction engine for price discovery, and a payments
mechanism escrow to protect the financial interests of both parties. There is also a job board
feature, for hiring from outside the 'community', or exchanging resources among the registered
service providers.

The platform is expected be ready in about a month.

Now is the time for the founders to answer some tough questions -
MANDATORY QUESTION
Should Rajiv and Gaurav raise a seed round, or just pool in their resources and bootstrap the
venture? Rajiv wanted to stick on to his current job for a couple of more years till the venture
started making enough money to support both the co-founders. Investors might have
reservations with such an arrangement. However, an infusion of funds at this stage would allow
them to hire the right people and grow the venture quickly.

BONUS QUESTION
There could be a tendency for the client and the service provider to shortcut the platform over
time, and work directly. What is the compelling value addition that ConnectionGuru can provide
the clients from the US and UK, and the service providers from India, so that they both keep
coming back for recurring business, and not just for one off transactions?

Sources: https://www.ibef.org/industry/information-technology-india.aspx

Important Instructions:

1. Only 1 submission allowed per team. Multiple submissions from a team would lead to
disqualification.
2. Kindly use your judgements to make reasonable assumptions and mention the same in
the solution.
3. Deliverable shall comprise of .zip folder consisting of solution in pdf in not more than 2
pages. Supporting Excel to be added in the same folder.
4. Naming convention for the zip folder is ‘Team name_College name’
5. Any entries received post 27th Sept, 2019 11:59 pm would not be considered.

In all matters, the decision of Socrates, IIFT Delhi is and will be final and binding.