Pranay says – “We want to build HUGE developer infrastructure products from India”. We have a natural right to it – 

• India ranks third in the number of developers in the world. 
• India is the second-largest open source community in the world.

Meet Pranay Prateek – Co-Founder, SigNoz, busy building An open-source Application Performance Management Solution (APM) from India. 

YC – Welcome to Yellow Chapter!

Can we start from the beginning? Where were you born? Also, can you tell us about your family, the dinner table conversations and the expectations while growing up?

Pranay – I was born in Dhanbad, Jharkhand. My father is a child specialist practising in Baliapur, Dhanbad district.  My mother was a homemaker. Growing up in a small place, most people have a strong urge to move out to a bigger city. My brother and I were no different.

My father is a well established medical practitioner. Being the only doctor in that region, people respected him greatly. Seeing our father, we knew education was the only way going forward.

Our father wanted either of us two brothers to be doctors. A typical doctor’s family tree is where the father starts the journey. Establish his practice from zero to one, and the next generation takes it from one to ten. Even our father wanted the same. But unfortunately, both of us had different plans. 

Speaking for myself, I was very much interested in Maths and Physics, unlike Biology. I always found maths very logical.

Our mother being a homemaker, was more involved in our day to day chores. She was more execution-oriented. Post dinner, I used to stroll around the house with my father, discussing school events and the career ahead.

Our father made peace with our decision to choose to engineer but said, “whatever you do, be the best.”

YC – How was engineering? What were the learnings? What would you suggest to engineering students? How can they make the best of their time?

Pranay – I got into Indian Institute of Technology, Madras – Dual Degree- Electrical Engineering. College was a lot of fun, academics and exposure.  

My first visit out of India was for an internship in Australia. Working with people across the globe was a big confidence booster. Some of the courses I picked were really good. They helped me understand the core of  Electrical Engineering. My dream of doing a PhD and eventually being a professor took shape.

The major learning from engineering would be:

1. Our seniors were in leadership roles in leading technology companies and universities worldwide. That gave us immense confidence if they could do it, even we could.

2. My internship with Geodesic, on fingerprint algorithms made me realise I want to work on a problem and build solutions which people can use now. Research made me realise I do not wish to improve the solution’s efficiency by 10-30%. I do not want to work on solutions that may or may not see the light in the future.

Suggestions for engineering students:

1. Figure out what you like doing. Something which you think you can do 24×7.

2. College provides the option to explore various things – sports, music, culture, specialised courses, organizing events etc., at almost no additional cost. Please make the most of it.

3. Go deep, whichever stream you pick.

YC – Can we briefly talk about your journey and learnings before starting your startup?

Pranay – 2009! Sure, I got a PPO (pre-placement offer) from Geodesic. I joined as a Software Engineer. It was my first job; I was earning for the first time. I was super excited and happy.

Learnings

1. Exposure to the startup environment. There was so much hustle around. Work was very challenging; there was so much to learn. I liked all of it.

2. Working on a product so closely got me thinking of developing one of my own. I always wanted to be an ace coder, but now I was thinking of starting a company.

3. Exposure to all the functions necessary to run a business, tech, ops, marketing, and sales, unlike a big established company.

2011! I joined MBA at  Indian Institute of Management Ahmedabad. Being a coder, I was not confident in my business skills. Doing MBA seems logical. Though I am still not sure if that was the right decision 😜 !

MBA Vs No – MBA

Current MBA programmes are designed for people who are in the mid to senior management roles. And want to excel in the same.

It is like an ‘on the ground’ thing for people who want to do startups. So, people who want to do a startup should either join an early-stage startup or start their startup. An MBA for a technology startup is not entirely helpful. MBA does not help you to become a founder.

Secondly, MBA gives a broad spectrum of functions like finance, marketing etc. Being an MBA graduate, I know the right questions to be asked to a CA, but I still feel all that is learnable.

Unlike engineering, the good thing about MBA is networking, where you are just confined to your initial friends’ group. Peers in MBA are usually potential senior leaders or decision-makers of the leading companies. One can reach out if required.

Job time…

2014! Product Manager @ Microsoft worked with CRM Dynamics product portfolio. Post-MBA, I picked up a product role. I wanted to stay close to technology. And Microsoft seemed logical. I wanted to see how a big company works. Also, there was this aura of working in Google, FB, and Microsoft, so I was kind of carried away in the same. 

Microsoft was fun, though it was slow for my liking. I was working in the CRM team, working on some problems and improving the efficiency by maybe 10%/.

I did one course in IIMA – Learning in Entrepreneurship Management, our prof. Used to say working in big organizations is like making a very, very small impact on what the company does. Unlike a small organization. For example, if you are in Google, you are one individual among 1 Lakh employees. Working at Microsoft, I was now able to resonate with it.

Startup 1

Mid-2015! Co-Founder @TapDiscover – Enables women to find the best shops for buying ethnic and occasion wear dresses. 

Why TapDiscover – Frankly speaking did not give much thought before starting TapDiscover. My brother Ankit, my current co-founder, was working in CitiBank. He was also not very excited about his job. We both decided to do a startup with the simple idea of “solve your problems.”

We were in Hyderabad, and our mother visited us. She wanted to pick some designer outfits; though I had stayed in Hyderabad for two years, still we were unable to help her shop. We started googling and could not find much information. The only way to find designer outfits was to visit the market physically.

We could see some gaps. We knew a problem existed, and there was no good solution available. So as I said earlier, without much thought started working on it. Hence TapDiscover was born!.

What were we solving for – Connect customers over chat with shops to find designs and prices of dresses.

How will we solve – 

• Building product roadmap and onboarding high-end retailers.
• Doing customer interviews to determine product focus. 

We worked on the idea for two years, and we reached 50,000 organic traffic per month.

Mistakes we made:

1. Business model was missing –  People saw the inventory on our platform, but we could not track the actual sales made. We were charging a 10% commission on sales, but monitoring the sales was an issue again. We came up with a subscription model, but retailers were not convinced to pay upfront. The typical mindset of a retailer is: help us generate revenue and take some% of the same as commission.

For example – Today, players like Dunzo connect online with offline, but they also make money on their delivery services. 

2. Scalability was again a big issue. The entire experience of online + offline was broken and had many loopholes.

3. Founder market fit was missing – We never thought WHY a discovery platform? We never questioned ourselves. A startup is a long journey, so the founder has to love the domain. 

When we started, we thought we would just build the tech platform. The retailers will post inventory on their own etc. But we were wrong. We were getting soaked in day to day operations. Fashion was never our domain; we stopped liking what we were doing. 

We then realised whatever problem the founder is solving, they have to love every aspect of the domain. 

The founder has to spend hours and hours, day in and day out, for years to build a business. And even then, success is not guaranteed. But to make this journey sustainable, the founder has to love the domain.

4. We never evaluate how big the market is? How much money was the current players making? We never bothered about TAM (total addressable market).

Job time…

Dec 2018! Lead Product Manager – DocsApp – Online Doctor consultation app. Post-TapDiscover, I was looking for a startup and came across DocsApp. Their mission was entirely relatable to the problems I had seen growing up in a small town. Quality healthcare was not available in Tier II and Tier III cities.

I again picked up a job. I led a team of PMs (product managers)  to create the best in class experience for consumers in the online Healthcare space.

YC – Why SigNoz?

Pranay – 2020! While working in DocsApp, I saw gaps in Application performance management (APM). Often, developers find it challenging to monitor applications and troubleshoot problems in their deployed applications. 

At DocsApp a lot of times, we used to get calls from customer care executives regarding bugs and some broken experiences customers were facing due to technical issues. The engineering team used to spend hours finding and then fixing the problems. We did not have clear visibility of what was breaking.

I started my research and came down to two things:

1. Now every company is basically a software company. The main IP lies in the software.
2. Now software is not deployed on a single machine, like in earlier times. They are on multiple servers and devices. So the whole architecture is quite complex. Software complexity is increasing.

It is very important to understand how the software is running. And, more importantly, how to find and fix bugs ASAP. 

Hence SigNoz – Open-source APM to understand issues in your deployed applications & solve them quickly was born.

YC – Can we now talk about sales and marketing, as they are challenging, especially for a tech cofounder?

Pranay – Sure, there are a couple of things that have worked for us:

1. Our is an open-source product. Being an open-source product has helped us a lot. Our users are developers, backend engineers and DevOps engineers. Our fundamental philosophy is building with the community. 

Our fundamental belief is that if a developer is given two similar products (one being an open-source), the developer will use an open-source product. Advantages of an open-source product are:

1. The developer can debug the bug faster.
2. Developers can learn from the community of like-minded developers.
3. Developers can contribute back to the community.

2. Github has helped us a lot in distribution. Also, we have trust signals in with 6500+ Github stars – https://github.com/SigNoz/signoz , 950+ members on Slack Community.

3. In our domain, the most important thing is “To Get User Start Quickly”. We do not ask for any credit card details, account details etc. It is simple, plug and play – https://signoz.io/docs/install/docker/

4. Tutorials – We have a lot of tutorials around technologies and applications –  ​​https://signoz.io/blog/

5. Hacker news Launch was a great success. We had 80+ comments –https://hn.algolia.com/?q=signoz

6. Webinars and talks are essential for our domain—good developers like learning about new things and keeping themselves updated. So conducting webinars and talks is an excellent way to create awareness.

YC – Can we please talk about some numbers and competition?

Prateek – Sure, 6500+ Github stars |  950+ members on Slack | 60+ contributors. TAM is really huge for our domain, somewhere around $17 Billion. Here is the latest report – Datanami

Competition – Datadog, one of our competitors, valuation is around +$40 billion. New Relic – Monitor, debug, and improve your entire stack | Grafana Labs – Operational dashboards for your data here, there, or anywhere. 

For our domain, three key factors are:

1. How do you position the product?
2. How is your product differentiated?
3. Why should developers use it?

SigNoz differentiating factors are:

1. We are an open-source product based on open-source standards. 
2. Future proof – We help teams across all stages of their journey. When they are starting out they can just use the open-source product. If they are scaling rapidly they can just use the Cloud version of the product. Once they mature a bit, they can self host the enterprise version with much more control.
3. Having a community around where users can ask questions, learn from others and get their issues resolved much faster.

Monetisation model – Right now our product is open source and free, anybody can use it. The business model we will follow would be an open core business model. We will have an enterprise version. 

Smaller companies can simply use the free open source version. But for large enterprises who need advanced features like security, compliance, more collaborative features etc., those would be paid features. We will be launching the enterprise versions in the next 2 to 3 months.

Saas Offering – We also plan to have a hosted offering in future, rather than running SigNoz on your platform. Companies can simply send data to SigNoz hosted by us.

Broadly the goal is to grow the community by 2x to 3x in the next 6 – 9 months. Reach 10,000+ GitHub stars, 1500+ Slack members, reach 100+ contributors. Right now, the focus is on building a brand which developers trust and start adopting. If you think about application monitoring and Observability, you should think about SigNoz.

YC – Quick three take-aways from YCombinator programmes?

Pranay – Sure:

1. Exposure – Interacting with lots of US founders was quite insightful. The US market is much more advanced for our market (Observability) than the Indian market.
2. Network – YC has a vast network of great founders across the world. You get access to all of them.
3. Mentors – I interacted with GitLab, founder and got his valuable insight on building an open-source product.

YC – What keeps you going?

Pranay – “We want to build a HUGE developer infrastructure product from India”. We have a natural right to it – 

• India ranks third in the number of developers in the world. 
• India is the second-largest open source community in the world.

But we have not been able to build developer infrastructure-focused companies. Software development infrastructure is a vast market.

Secondly, I usually zoom out whenever I am stuck in a challenging and demanding situation. I think of my past achievements:

• Getting through IIT, being from a small town.
• Being a founder once, learning from our mistakes and starting again. 
• Getting into YC from India, into a domain for which India is not very well known.

All these things give me the courage + confidence = solution.

YC – Any book recommendations?

Pranay – I read a lot of philosophy. Books on existential philosophy. I think people can read about stoicism. One book I like is ‘Meditations by Marcus Aurelius’

YC – Quick three suggestions for fellow founders?

Pranay – We have touched almost most of it but still three quick things that come to my mind is, For a B2B founder:

1. Founder market fit. Liking for the domain. B2B is a long journey, so you have to like it to survive it.
2. Market size – There are many problems around us which need a solution. But if still there is no solution do think ‘Why’ there is still no solution for it.
3. The startup may work, may not work. The founder should be able to see things beyond. She should enjoy the daily work she is doing.  It is a known fact only 5% of funded startups only become billion-dollar company.

YC – Pranay, people you would like to thank in your journey so far?

Pranay –  My parents, Ankit (my brother and co-founder), Priyanka (my wife), my friends from IIT who always set a higher bar for me and are still an inspiration, and early team members who believed in us and joined SigNoz when we were just starting out.

Pranay,  it was a great conversation. Thank you for your time. Yellow Chapter wishes you all the very best in your future journey.