Nishith Rastogi (Locus) shares the engineer's guide to SaaS scale up
The entrepreneurial journey of Nishith Rastogi , Founder and CEO of Locus is a masterclass in building a global, multi-million dollar logistics powerhouse by rejecting conventional wisdom.
From prioritizing empathy over endless customization to embracing a "slow and steady, but ferocious" growth strategy, Nishit's story is a must-read for any founder who believes in building a sustainable business, not just chasing hype.
Read on for more insights or check out the video version of the interview at: podm.in/locus
?? The Foundation of Nurture
Nishith emphasizes the importance of nurture in shaping an individual’s path, especially in the realm of entrepreneurship.?
"As a family, we are very certainly in the nurture camp. The five people around you have a very meaningful effect in your life."
His parents, both in the medical field, fostered an environment that encouraged exploration and curiosity. Rather than discouraging his natural inclination to tinker and build, they supported his engineering pursuits, creating a space where innovation could flourish.
This nurturing environment laid the groundwork for Nishith's entrepreneurial spirit. His parents provided him with a computer before an air conditioning unit, prioritizing technology over comfort. This early exposure to tools and technology shaped his identity as a builder and problem solver, setting the stage for his later ventures.
?? Early Curiosity and Engineering Passion
Nishith's childhood was marked by an insatiable curiosity and a passion for engineering. Growing up in Delhi, he was the child who would take apart household items just to understand how they worked.?
"I was the little kid with a screwdriver in his hand. I would literally go around the home disassembling things."
This hands-on experience was critical in developing his skills as a hardware hacker. His education at BITS Pilani further honed his technical expertise, allowing him to delve deeper into the world of engineering.
During his formative years in school, he was exposed to various tech fests and robotics events, igniting a passion for technology that would follow him into adulthood. Nishith’s early experiences not only shaped his technical skills but also instilled a belief in the importance of continuous learning and adaptation.
?? The Influence of Amazon's Culture
After completing his education, Nishith joined Amazon, where he was part of the AWS machine learning team. His time at Amazon was pivotal, as it exposed him to a culture that valued innovation and entrepreneurial thinking.?
"Amazon has fourteen principles, which they nurture in every joinee. Some of them, we have definitely ported to Locus as well."
Among these principles, the idea of having a "bias for action" resonated deeply with him. This principle encouraged employees to take initiative and make decisions, even in the face of uncertainty. Nishith explains how this culture influenced his approach at Locus, fostering a mindset that embraces calculated risks and rapid iteration.
?? The Birth of Locus: A Personal Mission
The inception of Locus was born out of a personal mission to solve real-world problems. Nishith's initial venture, an app called RightSafe, aimed to enhance personal safety in response to societal issues.?
"The idea was to analyze patterns that led to safety incidents and create a solution that would alert users in real-time."
This project laid the foundation for Locus, as the algorithms developed for RightSafe were later adapted for enterprise logistics solutions. The shift from a B2C application to a B2B focus was a strategic pivot that allowed Locus to address the complexities of the on-demand economy.
By 2015, Locus had transformed into a comprehensive logistics platform, providing routing solutions for businesses looking to optimize their delivery processes. Nishith's vision was clear: to create a product that solved logistical challenges and improved the overall customer experience.
?? Transitioning from B2C to B2B
The transition from a consumer-focused product to a business-centric solution was not without its challenges. Nishith and his team recognised that the algorithms and technology they had developed could be repurposed to serve businesses in the burgeoning on-demand economy.?
"The same algorithms that we used for tracking location and monitoring safety were transposed into an enterprise package."
This pivot allowed Locus to become a vital player in the logistics sector, catering to startups and established companies alike. By focusing on the needs of businesses, Locus positioned itself as a go-to solution for companies seeking to streamline their operations and enhance their delivery capabilities.
?? Building a Product for the On-Demand Economy
As Locus evolved, it became clear that the on-demand economy required a robust logistics framework. Nishith and his team set out to build a product that could handle the complexities of rapid delivery and real-time tracking.?
"For that something to happen, it needs complex logistics behind it."
The challenge was to create a system that could manage multiple deliveries simultaneously while ensuring efficiency and reliability. By leveraging technology, Locus was able to provide businesses with the tools they needed to succeed in a competitive landscape. The focus on route optimization and real-time tracking became the cornerstone of Locus's value proposition, enabling clients to meet the demands of their customers effectively.
?? Core Features and Competitive Edge
At the heart of Locus's success is its powerful routing engine, which integrates real-world constraints to optimize delivery routes.?
"The biggest problem in route optimization is to actually model the real world scenario."
This focus on accuracy and efficiency has positioned Locus as a leader in the logistics space. By continuously refining their algorithms and incorporating feedback from users, the company has been able to maintain a competitive edge.
?? Understanding Data and Real-World Constraints
Data plays a crucial role in the logistics industry, and Locus leverages it to enhance its offerings. Nishith explains that understanding real-world constraints is essential for effective route optimization.?
"We scan maps, latch onto municipal data, and derive insights from execution data."
This data-driven approach allows Locus to create accurate and efficient routing solutions that account for various factors, including traffic patterns and local regulations. By continuously gathering and analyzing data, Locus can refine its algorithms and improve its service offerings.
??? The Role of the Control Tower
The control tower is a vital component of Locus's logistics platform, providing visibility and control over operations. Nishith describes it as a means to monitor real-time activities and respond to any issues that arise.?
"Control tower helps you get alerted about life."
This proactive approach enables businesses to address potential problems before they escalate, ensuring a seamless delivery process. The control tower not only enhances operational efficiency but also plays a crucial role in delivering exceptional customer experiences.
??? Navigating Challenges: Cash on Delivery and Returns
Nishith candidly discusses the evolving landscape of cash on delivery (COD) in India. As urban centers adapt to new payment methods, the trend is shifting away from COD, particularly in cities like Bangalore.?
This shift is not just a minor change; it's a significant pivot in consumer behavior, with many retailers opting for UPI and card payments instead. Nishith points out that this trend is reminiscent of practices seen in the UK, where cash transactions have become increasingly rare.
Managing returns in this new environment presents its own set of challenges. Nishith emphasizes that for small shopkeepers, adapting to these changes can be daunting.?
"For a small shopkeeper, just managing that change is not easy."
The transition to digital payments is reshaping logistics and delivery systems, compelling companies like Locus to innovate continuously to meet these new consumer expectations.
?? The Go-To-Market Strategy
Nishith reflects on the early days of Locus and the pivotal moments that shaped its go-to-market strategy.?
"My first customer was under ten thousand dollars a year."
Fast forward to today, and Locus has secured contracts worth millions annually. The evolution of their average contract value is a testament to their strategic shifts and growth trajectory.
One of the key decisions made around 2018 was to focus exclusively on enterprise clients. This shift required a comprehensive overhaul of their tech stack and compliance measures, making them one of the youngest companies in their space to achieve ISO certification.?
"We needed to get our product right for enterprise buyers."
This involved introducing new buyers into the sales process and understanding their motivations. As they began to target larger organizations, they had to convince not only business leaders but also IT teams and procurement departments.
?? Scaling the Business: Lessons Learned
Scaling Locus involved a series of lessons learned through trial and error. Nishith emphasizes the importance of adapting their sales strategy as their customer base expanded.?
"We started selling to the business guy, but as we moved to higher order values, we had to engage with more stakeholders."
Understanding the different motivations of various buyers became crucial. For instance, the value proposition for a CFO differed significantly from that for a head of IT. This nuanced approach allowed Locus to tailor their messaging effectively.
Additionally, Nishith highlights the importance of being present in front of customers.?
"In my early days, I would take over two hundred domestic flights a year."
This relentless pursuit of customer engagement laid the groundwork for Locus's growth and adaptability in a competitive market.
?? The Importance of Relationships and Customer Success
Building strong relationships with customers has been a cornerstone of Locus's success.?
"We set up systems and SOPs around customer success."
These systems include regular quarterly business reviews (QBRs) to ensure clients are deriving value from the product. Nishith emphasizes that success is not just about contract renewals but about delivering tangible results for clients.
"If your product is working on the ground and adding value, even if customers are raising complaints, that's okay."
This proactive stance on customer success ensures that Locus remains a critical partner in their clients' operations, fostering long-term relationships that drive mutual growth.
?? Embracing AI and Future Technologies
Nishith is a strong advocate for leveraging AI to enhance logistics solutions. He shares insights on how Locus is integrating AI not just into their products but also within the organization itself.?
"Our goal was to first adopt AI in the organization before even in the product."
This strategy involves using AI to improve internal processes, from hiring to financial modeling. Nishith believes that AI can significantly enhance user experiences.
"AI is the new UI; user interfaces will become obsolete into intent interfaces."
By focusing on intent-driven interactions, Locus is positioning itself to meet the evolving needs of its users, making complex logistics management accessible and efficient.
?? Fundraising Insights and Strategic Decisions
Nishith offers valuable insights into the fundraising landscape, emphasizing the need to be strategic about both the timing and the funding sources.?
"Always keep as your tier one focus who you are raising funds from."
Building relationships with investors who understand the company's long-term vision can provide invaluable support during challenging times.?
"We have been blessed with investors who were equally supportive during tough times."
He advises founders to raise slightly more capital than needed, as it allows for flexibility in pursuing growth opportunities. His experience has shown that cautious capital management can lead to sustainable growth.
?? Navigating Growth and Market Competition
As Locus continues to grow, navigating market competition remains a priority.?
"We have modern competitors like Bring and Fareye, but we focus on our unique value proposition."
With approximately sixty percent of their revenue coming from India and Asia, and forty percent from Western markets, Locus is strategically positioned to capitalize on global opportunities. Nishith emphasizes the need for continuous innovation to stay ahead in a dynamic market.
?? Advice for Aspiring Founders?
Nishith's advice for aspiring founders is rooted in his own experiences. He encourages them to embrace the challenges of entrepreneurship.
"Get a cofounder; having someone to share the journey dramatically increases your probability of success."
He believes that now is an excellent time to build, thanks to technological advancements that streamline the development process. Aspiring founders should focus on excellence, as the competitive landscape demands it.
?? Personal Reflections and Content Consumption
Nishith shares his approach to personal development through content consumption. He dedicates time to "wandering," where he engages with long reads and topics of interest.?
"I cherish this time to gravitate largely towards long reads."
This commitment to continuous learning reflects his belief that staying informed is crucial for personal and professional growth.
Nishith's journey with Locus is a compelling example of how a combination of technical brilliance, user-centric design, and a relentless focus on solving real-world problems can lead to extraordinary success. It's a story that should inspire any aspiring founder to embrace the challenges, stay true to their vision, and build something that truly matters.?
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