Can India’s ODR startups cross the chasm?
by Sachin Malhan on April 28, 2020
A friend with a razor-sharp marketing mind recently pointed me [Sachin] to Geoffrey Moore’s Crossing the Chasm. A few pages in, I had the kind of feeling a fantasy-fan would probably have upon discovering that there exists a book called Lord of the Rings. Ok, maybe not that bad. But pretty bad. The good part was that reading Moore’s classic at this point, in the midst of COVID, and all of Agami’s work on catalyzing Online Dispute Resolution, was incredibly timely. It helped me understand a major dilemma in this space – could India’s leading ODR startups cross the chasm?Most startups actually fail to cross the chasm. The reason is simple – the fact is that most clients/customers in the early majority i.e. those across the chasm don’t want big changes but rather gradual improvements based on proven solutions.
Moore describes the chasm as the gap between a startup securing a few visionary early adopters of one’s product and getting buy-in from the pragmatic majority. Most startups actually fail to cross the chasm. The reason is simple – the fact is that most clients/customers in the early majority i.e. those across the chasm don’t want big changes but rather gradual improvements based on proven solutions. They want to go with what is shown to clearly work, what won’t shake the boat too much, and what won’t make them unpopular, even for a brief bit. And this is the early majority, let alone others later in the adoption queue! In ODR terms then, success is not about securing the few innovator-led clients who are willing to rough it out and learn with startups despite all kinds of risks, but about capturing the early majority who want it glitch-free, peer-reviewed and full-featured. This is a pretty cruel theory. You could do pioneering work building an early audience of visionaries and someone else could collect the rewards by using you as a bridge and picking up the early majority.
Chittu is already familiar with this book and as we reflected on these principles and our understanding of this space, the challenge became clear – can ODR startups create comprehensive solutions to high volume dispute categories that pain businesses?
Here’s what that’s NOT –
- “we are a team of lawyers”
- “we know mediation and arbitration really well”
- “we can help resolve some but not all of these types of disputes”
- “you can use this solution in addition to current processes to improve outcomes”
- “we use video-conferencing”
What it IS is as follows –
- >60% of this entire category of 20k disputes per year can be resolved in 50% of the time and cost
- 40% of customers that you would otherwise lose in a dispute scenario, are retained in this process
- You can get up and running with this solution in <5 days
- It’s private, secure and can scale immeasurably
- The data is yours but learning from it we expect to improve all parameters by 10% every year
We are just winging the numbers but you get the picture.
In the finance space ICICI Bank may well go down as the pioneer in applying ODR to unsecured loan disputes by taking a bold bet on one incredibly talented startup. But there are three or four other major banks that will only get into the act if you have a stable, proven at scale, and high impact solution for a clear-cut category. As much as they make encouraging noises they will prefer to accept your water-tight answers to the following questions rather than ask them with you –
- Can the majority of these disputes actually be resolved online?
- Will we expose our choice-making models to the outside world?
- What happens if a court overturns any of the decisions?
- What happens if the startup goes bust?
- What if sensitive client data is disclosed in the process?
By the way, if you’re thinking about how totally legit these questions are and how you wouldn’t back ODR unless you had a solid answer that’s because you are across the chasm as well. It’s the innovator/pioneer who goes dekh lenge and dives in head first.
Many of the conversations on ODR so far have been in fora with a large number of lawyers and that has distorted priorities for startups, we fear. Just because the field has a legal dimension does not mean that the rules of startup success are any different. While we continue picking the bone on legal issues around ODR, we must get to design fantastic technology-driven products that work for users. Do they really care if it’s an arbitration or mediation or something else? Do their customers?
Covid could be for ODR what demonetization was for payments. The startups have to raise the level of their game. What all this means is that once startups gain enough conviction about addressing a category they must move fast to develop a robust solution to fully address that category and communicate it exceptionally well (data and story) to everyone who is in that category. With the pragmatic majority across the chasm, startups cannot (a) sell the same half-baked but potentially “world-changing” product they sold to the pioneers, and (b) talk the language of hope and possibility. The pioneer early-adopters can also have a role in ensuring the chasm-crossing of these innovations they are championing by bringing their solution design expertise to the startups. Regardless of what the startups are asserting to not show their vulnerabilities, assume that they sorely need guidance on (a) how to develop their promising solutions into enterprise solutions and (b) the language and data to speak to more conservative peers.
‘Resolutions’ could transform how we live as much as ‘Payments’ did.
Covid could be for ODR what demonetization was for payments. The startups have to raise the level of their game.
Chittu Nagarajan is a serial ODR Entrepreneur for twenty years and widely regarded as a pioneer in that field. Her current venture is CREK ODR a 4th Generation ODR Technology Solutions Platform. Before CREK she co-founded Modria – the world’s leading online dispute resolution platform, was the Head of eBay and PayPal Community Courts, and founder of one of the first ODR platforms – ODRIndia and ODRWorld. She is a Fellow of the National Center for Technology and Dispute Resolution (NCTDR) at UMass- Amherst and a Board member at the International Council for Online Dispute Resolution (ICODR). Chittu is also the Managing Director for Contract Wrangler (India), a one of a kind Contract Management and Analysis Company in the Silicon Valley. She can be reached at [email protected]