Archive for October, 2005

Welcome to the Matrix

Few news items in past week or so:
1. At the Delhi bomb blasts, some victims who could not be identified because of disfigurement, finally could get identified by the cell phones in their pockets.
2. The police is trying to identify the suspects by tracing calls from their (presumed to be used) phones.
3. The income tax department is reaching out to suspected tax evaders through their cell phones.

Seems like cell phones have reached a stage where noone can avoid using them, even if it means being identified in the process. And somewhere, we have all agreed to being traced out 24×7. This is inspite of the fact that formal “location based services” are still not here.

The chip is in. Welcome to the Matrix.

BPO — What next?

The value of Business Process Outsourcing services, and particularly offshoring, is illustrated by the rapid growth of this industry. Most people agree that the entrepreneurial opportunity in scale-plays such as all centers is over. One of the commonly-accepted themes on where BPO startups will go next is “Niche BPO” — to pick highly specialized processes (such as legal work) and outsource pieces of that. There are a couple of other interesting areas that I would like to offer.

First, the BPO value has been delivered to a very select set of customers so far. Practically, the Fortune 1000 of the world. What are the models that will enable BPO services to other segments — be it on size, sector or geography. This is not just a sales focus issue — it might entail new business models, right from sales to delivery. It might require to integrate technology and BPO like never before. For example, there are already some companies which are looking to service Small and Mid sized Businesses (SMB) using innovative approaches, while reducing both the sales and delivery costs. The early starters in this area seem to have not figured out the scale and value-add issues (some of them resemble staffing companies), but more innovation is to follow.

Second, the labour cost arbitrage has largely been used for introducing efficiency in to existing businesses. Another question is important — what new businesses are enabled by supply of low cost labour? Are there products and services which could not be delivered at old costs in local markets, but are now possible. Take an example of availability of broad market research on private companies.

BPO has a long way to go. And there are a lot of roads ahead.

Band of Angels India

Band of Angels India is a group of successful entrepreneurs and executives with a passion to invest in early stage businesses. The founding belief of this group is that early stage businesses need more than just money to succeed — they need mentoring on diverse areas such as strategy, finance, go-to-market etc. Band of Angels India attempts to fill this chasm.

The application process to BoA involves sending in an executive summary to any of the members (yes, investors themselves take decisions here, there are no “investment managers”) and convince them that what you have is a potentially successful business. The member than “sponsors” the proposal to the whole group. Members in the group make individual decisions on whether to invest in any particular opportunity — for example, 4 members may decide to fund a given venture. The members continue to be involved in the mentoring process.

Typical deal size at BoA is less than Rs 2 crores. We expect higher investments to be supported by other venture capital players. BoA is diversified in its industry coverage — we will invest in any industry where we have members (and hence an understanding of that space). We look at deals from across the country. Some coverage on us. You may mail in your proposals to any of the members directly.

Why this new blog?

This blog is an attempt to bring the Indian venture community closer together. All its constituents, right from the entrepreneurs themselves, venture capital firms, angel funds, lawyers, recruiters, investment bankers, incubation cells — the list goes on.

As an entrepeneur, then as an angel investor and private equity professional, I have felt that despite close alignment of our end goals, there exist vast gaps in our understanding of each other. Gaps which are often responsible for inefficiencies in the system. For example, the entrepreneurs’ collective understanding of what the “hot areas” are might be very different from the investors’ view — venturewoods is a platform to discuss, and not necessarily agree on, those views. This site is an attempt to prevent all of us from being lost in the woods.

The objective of venturewoods is to be an open community without compromising on quality. If you feel that you have thoughts that you want to share, feel free to write in and request an account. In any case, do feel free to comment.