START-UP COMPANY REPORT: ATRI LABS ECON3430 1 EXECUTIVE SUMMARY Atri Labs is a startup company that introduces a python framework as an improved solution to an inherent problem within current frameworks. Atri Labs identified current frameworks are static and limited by the programming language used [1]. Their design framework boasts capability of designing in multiple languages as well as developing front end and back-end designs. This report analyses the current environment of the startup providing insights into the organisation, market competition as well as a business model. By providing this information, the report aims to inform and advise potential investors on which decision they should make when considering their interests. The report concludes, that while Atri Labs is neither a lucrative investment opportunity it is nor a loss-bearing one. Discretion is advised due to the lack public information available for the company. Overall Atri Labs is part of a highly competitive market but holds its own perks to acquire customers. As its currently in the beta phase no known sales are acknowledged at this period of time. Finally this report advises, interested investors to invest around $100,000 - $500,000 while providing support in the business aspect of the company. 2 CONTENTS Executive Summary ................................................................................................................................................ 1 Table of Figures ...................................................................................................................................................... 3 Introduction ............................................................................................................................................................. 4 Company Vision .................................................................................................................................................. 4 The Problem ....................................................................................................................................................... 4 The Solution ........................................................................................................................................................ 4 The Company ......................................................................................................................................................... 5 The Founders ..................................................................................................................................................... 5 Organisational Structure ..................................................................................................................................... 6 Company Timeline .............................................................................................................................................. 6 Team Evaluation ................................................................................................................................................. 7 Company Ownership .......................................................................................................................................... 8 The Consumers ...................................................................................................................................................... 9 Target customer/user .......................................................................................................................................... 9 Web Developers ............................................................................................................................................. 9 Non-Web Developers ................................................................................................................................... 10 Market Potential ................................................................................................................................................ 10 Consumer Traction ........................................................................................................................................... 11 The Competition .................................................................................................................................................... 12 Market Overview ............................................................................................................................................... 12 Market Breakdown ....................................................................................................................................... 12 Market Structure ........................................................................................................................................... 12 Market Forecast ........................................................................................................................................... 13 Market Regulation ........................................................................................................................................ 13 Business Model ................................................................................................................................................ 14 Pricing ............................................................................................................................................................... 15 Company valuation and Investment Advice .......................................................................................................... 16 Valuation ........................................................................................................................................................... 16 Investor Advice ................................................................................................................................................. 17 Conclusion ............................................................................................................................................................ 18 References ............................................................................................................................................................ 19 3 TABLE OF FIGURES Figure 1: Atri Labs Organisational Chart [16] .......................................................................................................... 6 Figure 2: Atri Labs Timeline [16] ............................................................................................................................. 6 Figure 3: Ownership of Atri Labs ............................................................................................................................. 8 Figure 4: Web design turn around [10] .................................................................................................................... 9 Figure 5: Example of non-web developer design [17] ........................................................................................... 10 Figure 6:Progamming Language Community Sizes (Millions) [6] ......................................................................... 10 Figure 7:Web Development Framework Market Breakdown [10] .......................................................................... 12 Figure 8: 2022-2028 Web Development Framework Market forecast [8] .............................................................. 13 Figure 9: Web development Cost Breakdown [19] ................................................................................................ 15 4 INTRODUCTION Company Vision “To enhance developer productivity” The vision statement is built around the objectives of the Atri Framework. Atri Labs is committed to achieve the following objectives: - Increase developer productivity - Adopt PWA specifications strictly - Easy to adapt to compliances through the use of the framework. [1] The Problem Progressive Web Apps or PWA are websites/apps built using web-based platform technologies [4]. PWAs combine several features of traditional websites and platform specific apps (i.e., Android or iOS-based apps), to allow end-users to easily access content either as a website or an installed app [4]. Since PWAs are primarily websites, they contain the basic features where they have at least 1 HTML page that loads some CSS and JavaScript. As such PWAs are often developed through the use of frameworks which are supported by certain programming languages. As of 2023, the following frameworks were identified as the best to develop PWAs: 1. Angular – HTML/TypeScript/JavaScript 2. React - JavaScript 3. Vue – HTML and CSS 4. Preact - JavaScript 5. PWABuilder – Vue.js and Node.js [3] However, like with any other software in the web development market, PWAs frameworks also face stark limitations. Few identified are: 1. Frameworks face limited functionality upon implementation [2], 2. Certain programming languages have inherent limitations which impacts developers’ ability to design PWAs [2]. 3. Due newness of the concept, limited support currently for such programs [2]. Atri Labs further identified current frameworks are static and limited by the programming language used [1]. For example, a Python PWA developer would find difficult developing front-end applications due to inherent limitations of Python. As a result, they will tend to spend years learning JavaScript to address the shortcoming [1]. The issue with such a method is that learning a new programming language consists of a steep learning curve and if not practiced and learned properly, developers would face coding difficulties often leading to project abandonment. The Solution For developers to avoid learning a new language from beginning and not be limited in terms of framework software availability, Atri Labs developed its Atri Framework. The Framework utilises Python for back-end web developments while implementing JavaScript for front end UI [1]. The framework boasts the following capabilities: - Compatible with multiple major programming languages, i.e. JavaScript, Python and Node.js. - Suite of productivity tools to reduce development time. Such as a visual editor and an asset management tool. - Developers do not need to write and document REST APIs. Has benefits such as reducing compliance breaches. - Ability for non-web developers to develop and maintain apps with little difficulty. [1] In line with their vision, Atri Labs follows the following design principles when developing the framework: - Simple front-end code - Flexible backend API - Follow “What you see – What you get” [1] 5 THE COMPANY The Founders Darshita Chaturvedi Chief Executive Officer Darshita is a Co-Founder and the CEO of Atri Labs [15]. She leads and maintains the development of Atri Labs open-source project: the Atri Framework. Darshita is a frequent speaker at JavaScript and Python conferences. She is a member of the Grants Working Group at the Python Software Foundation [15]. Darshita has worked in Machine Learning and Data Science positions previously in MIT (Graduate Research Assistant) and BlackRock (Quant Researcher) [14]. Prior to founding Atri Labs, she co- founded Quaffles, a start-up with similar goals to Atri Labs, as its CEO. The startup was founded alongside Shyam Swaroop and Juanita Baker [14]. Shyam Swaroop Chief Technical Officer Shyam is a Co-Founder and the CTO of Atri Labs. His responsibility includes the main technical development of Atri Labs open-source project: the Atri Framework [15]. He has prior three years of professional experience in the AI and Machine Learning field [15]. Prior to founding Atri Labs, he co- founded Quaffles, a start-up with similar goals to Atri Labs, as its CTO. The startup was founded alongside Darshita Chaturvedi and Juanita Baker [15]. Juanita Baker Chief Product Officer Juanita is a Co-Founder and the CPO of Atri Labs [23]. Juanita is a frequent speaker at JavaScript and Python conferences. She is a member of the Grants Working Group at the Python Software Foundation [23]. Juanita was a quantitative researcher at BlackRock. Her key focus areas were quantitative signal research using Machine Learning and statistics [23]. Prior to founding Atri Labs, she co- founded Quaffles, a start-up with similar goals to Atri Labs, as its CPO. The startup was founded alongside Darshita Chaturvedi and Shyam Swaroop [23]. 6 Organisational Structure The following organisation structure is developed based on the current members/roles visible on Atri Labs LinkedIn page [16]. The organisation shows a streamlined process with lower ranked employees capable of communicating directly with higher ranked employees. With the small size of the team, this raises efficiency in terms of allocating tasks and outlining key targets for each member of the team. Company Timeline CEO Back End Developer Front End Developer Software Developer (Full Stack) Intern Software Developer CTO CPO Feb 2022 - Atri Labs founded by CEO, CTO & CPO Jul 2022 - Atri Labs hires Software Developer (Full Stack) Sep 2022 - Atri Framework released as an open-source project Oct 2022 - Intern undertaken as a front end developers Jan 2023 - Y Combinator funding acquired Feb _ Apr 2023 - Further Developers hired Figure 1: Atri Labs Organisational Chart [16] Figure 2: Atri Labs Timeline [16] 7 Team Evaluation Many studies have been undertaken to analyse factors that result in the success and failure of a start-up companies. One such key factor is team composition. A post-mortem analysis of failed startups shows roughly 23% of failures was due to not having the right team [12]. Based on articles from Mass Challenge and Business Daily News [12][13], the following roles were identified as pivotal for a success of a start-up company. Roles Responsibility Occupied (Yes/No) CEO The leader and visionary of the team. Necessary in setting direction of the company to ensure success. Yes – Role fulfilled by Darshita Chaturvedi. CTO Innovator of the team. Necessary to develop and support the CEO’s vision through technical abilities. Yes – Role fulfilled by Shyam Swaroop. Product Manager Director of the team. Responsible for showcasing the value of the start-up’s product in the market. Yes – Role fulfilled by Juanita Baker Developer Builder of the team. Overlooks the finetuning and building up of the product as per the CTO’s and CEO’s direction. Yes – Four software developers identified, each addressing certain aspects of the product. Operations Organiser of the team. Responsible for overlooking the productivity of the team to ensure the delivery of the product. No – Currently assumed to be shared between the CEO, CTO and CPO CMO Marketer of the team. Required to promote the product for the public/target audience to ensure demand for the product. No – Currently assumed to be overlooked by the CPO. CFO Financer of the team. Necessary to manage the start-ups funds, income, and expenses. No – Unclear on who undertakes the role. Analysing the organisation structure and the key roles undertaken, it can be evaluated the start-up places a heavy emphasis on the technological aspect. With many team members possessing education or industrial background in technology development, Atri Labs possesses a high calibre of personnel to cover technological roles (CTO, Product Manager, Developer). However there is a clear vacuum in terms of employees to manage the financial and marketing roles of a startup. Currently the unoccupied roles are shared among the upper hierarchy of the start- up. However such inoccupation spells high risk of failure for Atri Labs in the future due to intensive nature of tasks each role requires [12]. Overall in the one and half years of operation, Atri Labs does seem to outline a positive growth in terms of hiring employees. In the first year, Atri Labs focused on securing funding to run operations, while in the second year the startup went through a hiring phase growing from a team of 3 to 8 employees in the span of 6 months [16]. Most employees hired were focused on developing the product, however there is a lack or little public information regarding hiring of business (marketing/financing) oriented employees. Therefore technologically wise, Atri Labs shows capability of hiring the correct employees. However in terms of business management, while the founding members have prior experience running a startup, the lack of marketing and financing hires alludes otherwise. 8 Company Ownership Atri Lab gained funding from Y-combinator in 2023. Y-combinator invests $500,000 in every company as a deal. Of the total funding, $125,000 is invested for 7% of the company [18]. The remaining ownership is shared between the founders of the startup [18]. It is important to note that Atri Labs provides its product through GitHub. Due to GitHub holding a subscription model in order to provide start-ups and developers a platform to promote their product, they legally do not hold a percentage of the company. As such it is rather seen as an expense for an asset [11]. Ownership of Atri Labs Atri Labs (CEO,CTO, CFO) Y-combinator Figure 3: Ownership of Atri Labs 9 THE CONSUMERS Target customer/user Overall Atri Labs Framework is open for any user who is interested in web design and development. As such the target customer/user can be broken to two distinct categories: • Web developers • Non-Web developers WEB DEVELOPERS Web developers are a profession that creates and maintains websites. Developers often learn a particular coding language to perform their job description adequately and successful. With the introduction of frameworks, which streamlines and simplifies the process of creating website, many developers have turned to such tools to perform their task quickly. Survey done in 2022 found that 60% of web developers use frameworks as part of their job. The usage of frameworks lies in its efficiency to perform critical development tasks such as deployment and restoration of service at a faster rate [10]. The graph below outlines how many developers were able to meet tight deadlines with either using a framework or not [10]. Overall it shows more developers were able to reach targets earlier using a framework [10]. Atri Labs provides the same benefits as most web frameworks, proving lucrative to majority of web developers in the market as per the statistics. 0 10 20 30 40 50 60 Code Deployed on command Lead time less than an hour Service restored in less than a day No . o f w eb de ve lop er s ( % ) Web design Turn-around [11] With Framework Without Framework Figure 4: Web design turn around [10] 10 NON-WEB DEVELOPERS Non-web developer refers to the population that hasn’t formally learned or been trained in web development. These people often contact web design as an end-user. However one particular group that would benefit from the ability to web design are small-to-large business owners. With Atri Labs user-friendly front-end, business owners can build their own websites without having to hire professional web developers or learn coding themselves. This will be increasing savings on resources. The image below showcases an example of a business-built website. Market Potential Demand for web frameworks is dependent on the user base for the product. As per the identified target consumers, majority of user will fall within the web designer category. With the framework being primarily supported by Python, demand for the product will be primarily driven by Python web developers. Python was recognised as the second biggest language community as of 2022 with 15.7 million users [6]. The number of developers highlights the potential consumer base for Atri Labs framework. With Atri Labs further catering for JavaScript, the framework builds an even larger potential consumer base. With the benefits Atri Labs framework holds over other types, demand for the product can be forecasted to be proportional to the number of developers. However, while demand for Atri Labs Framework can be proportional to the number of developers, Figure 5: Example of non-web developer design [17] Figure 6:Progamming Language Community Sizes (Mi llions) [6] 11 developers’ preference plays a negative role. Net Solutions identified 11 Python Frameworks which are popular, of which Atri Labs isn’t included [5]. Django, developed in 2003, was identified as the most popular form of Python framework in 2023 [5]. Therefore, it can be observed Atri lab has a high potential demand, however there is intense competition presented by existing frameworks. The potential for high demand is further support by Atri Labs placing within the top 10 for the fastest growing open-source startup as of Q1 2023 [16]. Consumer Traction As of current, public register crunchbase.com reports Atri Labs sees around 6,237 monthly visits, with majority being from United States (45%) and India (26%) [21]. On Atri Labs GitHub servers there are currently 27 repositories created for the development of apps by users [17]. Publicly, the company acknowledged over 20,000 downloads of the framework in the year 2022 and was placed as the number one repository in GitHub [16]. Furthermore the latest edition of ROSS index (Q1 2023) places Atri Labs within the top 10 fastest growing open- source startup [16]. All the data outlines the company is experiencing significant interest by the community. In terms of methods of customer acquisition, Atri Labs have not released any public statements. Due to the product being open source and its beta phase, it can be inferred users find the product through word-of mouth. Social Media posts by the founders on Twitter and LinkedIn allows Atri Labs to expose their product to the social and professional community increasing curiosity of viewers to trial the product [16]. Overall due to the newness of the startup and the lack of public information it is quite difficult to provide definite methodology used by Atri Labs for customer acquisition. 12 THE COMPETITION Market Overview MARKET BREAKDOWN Atri Labs is identified as part of the web development framework market. As per Web Tech Survey, the current outlook for the market is as follows [10]: As seen from above most popular web frameworks are JavaScript frameworks, with React holding slightly less than half of the market share (40.67%) [10]. The most popular Python based framework is Django and it only holds 0.71% of the market [10]. As such for a python framework entrant like Atri Labs, it faces a high barrier to entry due to existing JavaScript based web frameworks holding majority of the market. MARKET STRUCTURE The overall market structure can be described as a monopolistic competition, where many companies offer competing frameworks which are similar substitutes to one another [9]. The companies are differentiated by the frameworks programming language, the tools, and standards available and branding [9]. Total no. of sites developed using frameworks 12,147,723 websites Percentage of global websites in the category (Developed using frameworks) 13.43% Current Leading Framework React Fastest Growing Technology Slim Largest User Location United States Technology Description Market Share React Framework that allows the user to build interfaces out of individual pieces called components 40.67% Microsoft ASP.NET Open-source web framework used for building different types of applications 33.96% Backbone.js Lightweight JavaScript Library that allows to develop and structure client-side applications 6.13% AngularJS JavaScript Framework 5.47% Vue.js JavaScript Framework for building user interfaces 4.39% Microsoft ASP.NET MVC Lightweight, highly testable presentation framework optimised for use with ASP.NET Core 3.09% ⋮ ⋮ ⋮ Django High-level Python web framework that encourages rapid development and clean design. 0.71% Figure 7:Web Development Framework Market Breakdown [10] 13 MARKET FORECAST In terms of forecast for the market, a study in 2023 concluded the following for the web development market [8]: This outlines there will be continued demand for web applications, showcasing an opportunity in the five years, for Atri Labs to grow competitively with existing firms. Furthermore as a result of the COVID-19 outbreak in 2019-2021, digital transformation and technologies have sped up outline a digital surge. As of 2022 number of global internet user have nearly doubled from 3,444 million in 2018 to 5,300 million users. This trend shows the market for web development to increase proportionally outlining a further opportunity of Atri Labs and other competitors’ growth. MARKET REGULATION Similar to other business, web frameworks can be majorly impact by government regulation. Laws can be imposed either restricting sales or services provided by companies [7]. Furthermore taxes, fees and/or licenses/permits would be required for companies to perform their services legally [7]. It is also important to note that sanctions can be applied to web frameworks depending on the political atmosphere of nations [7]. For example, due to the Russia-Ukraine war, web frameworks could see sanctions imposed restricting market engagement in Russia or Ukraine. 2022 Market valuation USD 60709.6 million Compound Annual Growth Rate (CAGR) 8.08% 2028 Forecast USD 96748.41 million Figure 8: 2022-2028 Web Development Framework Market forecast [8] 14 B usiness M odel Key Partners • GitHub – Atri Framework platform provider • Y-Combinator – Funding provider • turingLabs and Marvelloux – Design partners [17] Key Activities • Framework designing and development • Framework maintenance • Framework upgrades based on customer feedback • Continuous service support [1] Value Proposition • Provides web developers a streamlined alternative capable of front end and back-end web development • User friendly UI allows non-web developers to easily develop their own websites • Framework is compatible with JavaScript, Python and Node.js appealing to a wider target developer audience [1] Custom er Relationships • Customers have a dedicated feedback section to provide developers with key request to improve the framework • Darshita provides a link which allows interested users to set meetings with her to understand the product • As the product is open-source external parties can provide advice to improve the framework [1][17] Custom er Segm ents • W eb designers • Non-W eb designers o Small-to- Large Business Owners Key Resources • GitHub Repository Account • Python software • JavaScript front end software • IT equipment (laptops, PCs) • W eb framework developers • Marketing team for the product Channels • Framework will be available through GitHub • Further distribution methods are to be investigated. Cost Structure • Startup location lease • GitHub Account fees • Salaries • Associated bills/ Legal fees • IT assets and office utensils / Software licenses Revenue Stream • Investor Funding – Y-Combinator and GitHub [21] • Due to product in beta phase no sale is recorded yet. 15 Pricing As the product is open-sourced and in its beta testing phases, no sales have been announced for the company. As such it is difficult to place price on the framework as of this moment. However comparing the prices it takes for a company to develop a website using different means, a range can be inferred [19]. The table below shows how much it costs to build a website using different means. Website developed using … Cost A Website builder USD $5 - $50 per month WordPress USD $35 - $780 upfront, then $11 - $50 per month Web Developers USD $5000 - $30,000 upfront Figure 9: Web development Cost Breakdown [19] Since the Atri Framework is a website builder of sorts, a price range between $5 - $50 per month, can at this stage be assumed as Atri Labs sales target. 16 COMPANY VALUATION AND INVESTMENT ADVICE Valuation The simplest form of company valuation is to subtract liabilities from assets [20]. However this methodology does not paint the company’s true value. Due to the lack of public financial information the Berkus Valuation Methodology for startup will be used to valuate Atri Labs [22]. The Berkus Method provides a maximum valuation based on optimistic future revenues. It’s used as a valuation method prior to a company’s first revenue [22]. In Atri Labs case, since the company has yet to generate any consistent flow of revenue aside from the initial investment, the method is deemed appropriate. The method studies five crucial areas of a startup while allocating a value from zero to $500,000 for each area [22]. The areas are Area Description Valuation Reasoning Sound Idea An exciting business idea $500,000 Atri Labs has successfully presented an idea which address a particular problem in the current market. Quality Management Team An excellent management team $400,000 As of current, Atri Labs has been able to attract and built a team to successfully deliver the product technologically. However they are lacking personnel to overlook the business (marketing/financing/organising) aspect of Atri Labs. Prototype A solid product or prototype to attract customers $500,000 Atri Labs has successfully launched a beta prototype which experienced positive reviews by users. Strategic Relationships Powerful strategic alliances, partners, or a burgeoning customer base $100,000 Currently, Atri Labs has strategic partnership with GitHub and its user community, showcasing a positive relationship between the platform, users, and developers. However Atri Labs is noticed to have a small set of industry connections. If Atri Labs is able to build up a rapport with for example the coding language company, Python, the valuation would be higher. Product Rollout or Sales Company has signs of revenue growth and a pathway to profitability $0 Currently due a lack of financial information and that the only public investment is noted, it is difficult to ascertain the product rollout plan for the company. Also due to the lack of a CFO and CMO, it raises a risk of – if the company is able to successfully generate revenue. Final Valuation - USD $1,500,000. 17 Investor Advice Based on the current business model of the company as well as it’s linear organisational structure, an investment would be highly beneficial for the growth of Atri Labs. It will allow them to have enough cash revenue to hire employees for the business aspect of the startup as well as further develop their product. As such it is not recommended against for an investor to invest in Atri Labs. However before an investor starts investing in the company, it should be highly prudent of them to request the current financial status. By not requesting current financial information, any investor incurs high risk of a negative return of the investment. Also based on the given valuation, an investor should also not invest more than $1,500,000 in the company. Looking at their investment history, an investment between $100,000 and $500,000 would be adequate, as it matches the deal of Y-Combinator. If an interested investor wishes to provide the full valuation amount they should undertake a stage-by-stage approach outlining key targets the company has to achieve before receiving their next set of investment amount. This will ensure security for the investor. In terms of shareholdings, for the recommended investment amount (between $100,000 to $500,000): • If the investor wishes to be involved in the company, a percentage over 51% will be favourable. This will allow the investor to place any input/queries/decision, which will definitely be considered by the start up when tasks or objectives are being undertaken. The investor should also: o Aid in the business component of the company. o Introduce qualified personnel to overlook financial and marketing aspects of the start up o Place a mutual trusted operations manager to oversee the process and efficiency of the company. • If the investor does not wish to heavily engage in the process of the business, a shareholding of 7% is adequate. This value is based on the y-combinator deal Atri Labs made. 18 CONCLUSION In conclusion, Atri Labs is neither a lucrative nor a loss-bearing investment opportunity. Due to the high competitiveness of the market, the Atri Framework will face a high barrier to entry, with majority of the market being held by JavaScript based frameworks. However in terms of user-friendliness of the software, Atri Labs provides an easy-to-use front-end UI which even non-web developers can use. This advantage allows Atri Labs an opportunity to grow in the competitive market. With the capability of integrating Python and JavaScript, the framework will appeal to wide target audience resulting a high potential demand. In terms of the company, the team is heavily focused on the technological aspect of the start-up, outlining a lack of business management positions. If an investor wishes to be involved with the start-up, they should focus on improving the business aspect, to ensure the success of the company. Overall, there is no recommendation against an investor from investing in Atri Labs. However should an investor wish to invest, they should request an overall internal company report due to the lack of public released information regarding Atri Labs. This will mitigate the high risk created due to the lack of information. 19 REFERENCES [1] Atri Labs, “Introduction: Atri Labs,” Atri Labs RSS, https://docs.atrilabs.com/ (accessed Jun. 12, 2023). [2] C. 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