Part 12 of 18 in Building the Right It: The Indian Founder’s Guide
Your startup’s data obsession might just be your downfall. The truth is, most Indian founders cling to surface-level metrics, mistaking them for genuine market validation. You’ve been told to be data-driven. But are you using data that matters, or numbers that flatter? It’s time to get real: compliments are cheap, and the only data worth your time is the kind that demands skin in the game.
Understanding the Illusion: ILI vs. OLI
Let’s break down two critical metrics: Initial Level of Interest (ILI) and Ongoing Level of Interest (OLI). These aren’t just acronyms; they’re your compass in a landscape overrun with superficial data.
Initial Level of Interest (ILI)
ILI is the shiny object many founders chase. It’s the percentage of people who show initial interest in your offering. If 200 people saw your ad and 14 signed up, your ILI is 7%. But don’t be fooled—this number can be as worthless as a Facebook like. Why? Because it doesn’t cost your audience anything to click a button or fill out a form. Yet, many founders raise seed rounds based solely on ILI. That’s a mistake you’ll pay for.
Ongoing Level of Interest (OLI)
OLI is where the real work begins. It measures repeat engagement—the kind you can’t buy with cashbacks or discounts. Do users come back without a nudge? Are they committed enough to incorporate your product into their daily lives? If your app is opened only when reminders are sent, your OLI is failing. Look beyond the first interaction; focus on creating habits.
What Constitutes Skin in the Game?
Compliments are free. Real commitment involves risk—financial, reputational, or behavioral. Here’s what counts:
- Money: A ₹49 deposit is worth more than a Google Form signup.
- Time: A potential customer attending a 30-minute demo is more engaged than someone who liked your post.
- Reputation: A retailer stocking your product speaks volumes compared to a friend’s casual “good job.”
- Data: Sharing sensitive data, like actual sales figures, is a stronger commitment than a vague “let’s connect.”
- Behavioral Change: Switching payment methods or opting for your service over a longstanding alternative is the ultimate skin in the game.
Ather’s Pre-Order Success: A Case Study
When Ather Energy struggled to secure funding, they didn’t just rely on ILI. They ran a pre-order campaign, requiring a deposit for their electric bikes. This wasn’t about revenue; it was about validating demand with real commitments. Deposits signaled serious interest, proving market demand to investors. If you’re launching a ₹2,999 online course, consider a similar approach. Test the waters with a fee that signifies true interest.
Feature Temptation: A Trap for Indian Startups
Feature-rich products can be alluring, but they’re often a graveyard for startups. Take HealthifyMe—a platform that could easily have drowned in a sea of features. Instead, they focused on what truly matters: will users stick around when motivation wanes? A stripped-down app with real-time human interaction outperformed complex features. Don’t build until you know what keeps people coming back.
The Bottom Line
Stop being seduced by vanity metrics. Real data has skin in the game. It’s the kind that demands something from your users—money, time, or change in behavior. If you can’t measure OLI, you’re not ready for the next funding round. Build your product around habits, not clicks. Your runway depends on it.
FAQs
Why is ILI not enough for raising a seed round?
ILI is surface-level interest that doesn’t translate to sustained engagement or revenue. Investors look for deeper validation through OLI, where users show ongoing commitment.
How can I measure OLI effectively?
Look at repeat behavior over time. Use metrics like DAU/MAU ratio, subscription renewals, or repeat purchases. Focus on habits formed rather than just initial signups.
What are some Indian examples of successful skin-in-the-game strategies?
Ather Energy’s pre-orders and HealthifyMe’s focus on user engagement over features are prime examples. They validated demand with real commitments, not just clicks.
How can startups ensure they’re using the right data?
Prioritize data that requires user investment. Avoid vanity metrics and focus on those that indicate real engagement and commitment. Test with small financial commitments or behavior changes.
Can small startups without resources still apply these principles?
Yes, even with limited resources, you can test willingness to pay or behavior changes. Small deposits or pilot programs can provide invaluable insights into true user interest.
Data-driven decisions must be grounded in real commitment. If you’re an Indian startup founder looking for mentorship and investment, consider reaching out to Malpani Ventures. We’re here to guide you with experience and honesty.