OMAK’S top five tips for startups

Ehantha Sirisena is the founder and Managing Director of Omak Technologies, a software developer that commenced operations in 2011. Omak builds software and applications that help restaurants manage operations. VDine, the company’s flagship product, was designed for restaurants to manage back office functions. From the time of taking an order to informing the kitchen, updating the customer’s bill, and managing the staff, VDine covers a range of applications. It can also handle a restaurant’s human resource administration, and inventory and supply management.Omak’s second product in the restaurant sphere is Reztguru. Customerfacing Reztguru essentially allows restaurant patrons to make table reservations or order online, and enables restaurants to keep from under or over booking.

Restaurants can also use Reztguru to manage reservation information and preferences so they are prepared to meet their customers’ every need. As this technology is shared and managed via the cloud, restaurant owners can manage their multiple establishments remotely from anywhere. Ehantha says startups essentially face three problems. First, with no reference customers, patrons are skeptical about signing up to a startup’s unproven product. Second, the best hires in the field won’t want to take a career risk with a startup. Third, finding funds is challenging. However, if Omak’s success story is anything to go by, hard work and commitment really do pay off, despite its cliché. Ehantha tells Echelon of six lessons he learnt the hard way since Omak’s inception.

•Make sure the founding team has a diversity of skills
Omak’s initial years were in the fringes of Ehantha’s family-run textile business. Today, the company is a forerunner in restaurant management in the country. Ehantha initially ran the company entirely on his own, with the help of several developers. Today, his dream team comprises Omak’s Director of Marketing Strategy and Co-Founder Chrishan Perera and Head of Operations Thiyagu Somasundaram. “The biggest lesson I learnt was that the key team you start off with is the most important thing.”

oFounding teams of tech startups usually have just one skill: they can code. A tech graduate partners with his likeminded friends to launch a tech company. But to be successful, they soon realize a diversity of skills is critical. However, they take awhile to learn or hire team members with the necessary skills, setting back their commercial success. Omak built its dream team by bringing onboard over time the right people who complemented and supported the team. It also helped to keep the team small and understand each person’s strengths. Everyone playing multiple roles also helps a team achieve quick success, says Co-Founder Chrishan who takes on video editing duties when no one else is available for the task.

•Find the right mentors
Mentors are experts in their field who have experienced the ups and downs of running a company. They are able to gain a bird’s eye view of a startup and provide guidance by pointing out problem areas that the entrepreneur may not have seen otherwise. This has been true in the case of Omak. “We didn’t have mentors initially, and I think progression was a lot slower as a result,” Ehantha says.

After dabbling in software services for two years, Omak was one of the first companies in Sri Lanka to adopt the software as a service (SaaS) business model. Using cloud-based technology, vendors use the SaaS model to distribute products and services as applications to customers. Omak was able to enlist the help of a SaaS expert who had worked with the model previously and finetune VDine to release a final product that better suited customers. Thereafter, the company gained more mentors like celebrity chef Dharshan Munidasa and serial restaurateur Harpo Gooneratne who supported Omak by deploying VDine at Ministry of Crab and Colombo Fort Café. However, many angel investors, startups today are able to partner with experts in their respective sectors to garner the best support. Find ways to meet the people you want to meet. Startups are rarely invited to big corporate events where networking happens. Omak’s big networking break came following its participation in a startup business model competition, Venture Engine, in 2014.

Organised by Blue Ocean Ventures and the Indian Angel Network (IAN), Venture Engine promotes and supports entrepreneurs. The event provides counsel, resources and exposure to angel networks, and encourages startups to present their idea or business to a panel of judges. The winners of Venture Engine receive a lot of investor interest, as do other businesses featured through the event.In its third year, Omak became first runner up at Venture Engine 2014. Eighteen Venture Engine-related angel investors committed to invest in the company. The company was valued at $650,000. Among the investors is Rajan Anandan, Managing Director of Google India and Co-Founder of Blue Ocean Ventures. He is an investor with IAN, for whom this is only the second investment out of India.

“Ehantha is good at ‘accidentally bumping into’ prominent people,” jokes Chrishan. This has landed some industry bigwigs on Omak’s board including Dumith Fernando of Asia Securities (Omak’s Chairman), and entrepreneur and investor Girish Anand Sobti. Dumith and Girish have also invested in the company. Other board members include Founding Director of LYNEAR Wealth Management Naveen Gunawardena and Attorney-at-Law Shraepathy Attanayake. “We overcame our first round of funding, now we are working on the second,” Ehantha explains, revealing that the company is looking for a five to seven-fold jump in valuation this year, owing to its growth potential and greater returns.

• Don’t be afraid to launch an imperfect product
Ehantha’s fourth lesson: learn from mistakes. “Don’t wait for a perfect product; push it into the market, learn from it, adapt and redesign, and launch again.” VDine has been revamped a number of times due to market requirements. Ehantha urges startups to get into the market and learn on the go. “Sometimes you literally can’t even think of what products are needed until you go into the market and experience it.”

o3Too many startups create a product they think people want. They spend months, sometimes years, perfecting the product without ever showing it to the prospective customer. Most product developers don’t even get the feel of their customer. Ehantha mandates his team to visit one restaurant a week to get a feel of their industry and identify pain points in the systems. For feedback, the team asks the cashiers and waiters about the system. “If something is wrong, they will tell you to your face, and that is the best feedback you can get,” he says. It’s important to constantly talk to the key user base.

The company also follows the lean startup movement, which is transforming how products are built and launched. Made popular by a New York Times best-selling author Eric Ries, the lean startup methodology is based on the build-measure-learn feedback loop. Lean startup principles essentially answer the question ‘How can we learn more quickly what works, and discard what doesn’t?’
•Be focused, rather than trying to address every problem “We used to do everything from websites to systems; we had no focus area,” Ehantha reminisces. But following a trend in the IT industry to focus on one particular vertical or domain, Omak selected restaurant management as its specialty.

“By narrowing our market and products, we were able to give better customer value,” Thiyagu explains. Chrishan adds that being a jack of all trades and a master of none may increase your revenue, but specializing in one area will earn higher profit margins in the long run.

VDine was especially designed for Asian restaurants and customers, who Ehantha claims are more demanding, not process oriented and chaotic, expecting the systems to manage the chaos. Western markets follow a ‘one restaurant, one owner’ concept, to an extent. In Sri Lanka, most restaurant owners manage several locations. VDine helps them to keep tabs on all outlets, better serve its customers and streamline the restaurant management process. By providing a niche product in a narrow market, Omak grew 10-fold in terms of locations – from 30 restaurants in early 2014 to 310 restaurants as of today. The company also hosts the largest network for table reservations in Sri Lanka, signing up restaurant bigwigs like Gallery Café, Tintagel, Harpo’s group, Ministry of Crab, Kaema Sutra and Clique.

•Competition is healthy
With not many competitors in the local market, the Omak team was bemused by Leapset’s recent entry into Sri Lanka. Leapset is a Silicon Valley tech firm that provides an end-to-end platform for the restaurant industry incorporating technologies like POS systems, e-commerce and mobile applications, helping merchant-customer interactions. Leapset is an associate company of Sysco Corporation, the world’s largest food services company with annual revenue of approximately $65 billion. Leapset is valued at Rs44 million and employs over 350 in Sri Lanka and the US. With 700,000 independent restaurants in the US, Sri Lanka’s 500 eateries seem like child’s play. However, Ehantha views this as healthy competition that “keeps them on their toes”, and continually looking at new models and upgrading its features. “You can’t view competition as a threat; you’ve just got to find your way around them,” he explains, adding “If we don’t up our game, we won’t survive in any market.” The team is also celebrating its most recent win, Cinnamon Hotels. “When a big company with a lot of money plays in the same game and we win, it’s always exciting,” Ehantha exclaims. With many more ideas in the pipeline, Omak shows no signs of slowing down. For a tech startup not yet five years old, Omak’s portfolio continues to impress. For startups following its lead, there is nowhere to go but up.


Model hous e by Shamini Perera