Archive for June, 2007

Apple I-Phone- Hype or Hit?

If you look into newspapers and websites of any journal from United States you won’t miss the word I-phone. Believe me, there are more than 100 articles that was written by technology experts, Apple lovers and others in this business.

Would it become a hit? Million dollar question. But it’s easy to answer. It’s going to be flop of this century. I knew that technology lovers and apple fans would hit at me. I love to get hit by the folks who’re fans of technology, convergence, and Ofcourse Apple.

History says that convergence won’t work in the market. Make no mistake, technologist love it, press love it but public think other way. Is it possible for anyone to think of having a system that could do printing, scanning, taking photocopies so on and so forth from single device? But intelligent people from different companies did that and eventually got failed.

When we think about printing, it’s only HP that’s coming to our mind. XEROX is better in photocopiers. This clearly states that divergence is here to stay and Ofcourse it’s only going to be winning bet. After so many millions and billions in advertising, still few companies love for another battle in convergence.

Apple with its I-phone is doing another mistake, which they did almost a decade before with Newton. For those ladies and gentlemen, who doesn’t know, Newton has been launched as hand held computer. It portrayed its handwritten recognition as key technology in its product. Today there is still palmtop, but there is no Newton. Newton got destroyed because of convergence. Its hand written recognition did lot of mistakes in recognizing and hell lot of funny stories has been written on it. Finally Apple winds up its plan and ended in wasting its precious time and money in the process creating successful convergence product.

I-Pod – Why it’s hit?

I-pod is definitely not a first hard drive for music. But its first hard drive in the mind of people. Why it become instant success. Because it does only one thing in a perfect way- Digital Music. It had the capability of holding more music than any other MP3 players that could store music of just 2 CDs. Its classical example of divergence. It got enormous success because it is a specialist.

I-Phone – Why it could be flop?

With I-phone I’d be able to watch movies, send email, listen to music and Ofcourse make calls. Which battery in this world could last longer by accepting all these functions combined in a single device? I think this is going to be huge task for the folks at apple to come up with realistic answer. Already BusinessWeek has come up with an article that I-Phone is not supporting few email clients. Make no mistakes there are much more to come.

There is another danger for Apple, where they might be getting into competition with focused competitors of Smart phone makers viz., Research in Motion (RIMM) and Palm. Apple is increasing its competitors which mean it is directly or indirectly creating enemies which are not good for its business. Well, you’d argue, if I’m in market, I’d be having enemies, but creating unnecessary enemies are not good for business.

Whatz the lesson for startups from Apple?

Ofcourse we always learn lessons from others or learn from our mistakes. From Apple launch of I-phone, start ups must know that they must be focused and must work as a specialist than a generalist.

If you’re in everything, it means you’re in nothing. Not only that, your business could unnecessarily attract more competition and it could add enemies in the industry. This is definitely not good for start ups.

Start ups must try to focus on a particular technology that should be new and unique rather than converging everything and does one-stop solution which had the history of failure than success in this market. Rational thinking should hold high than emotional thinking. This is one of the most important lessons from this launch.

Convergence stays in newspaper columns, Divergence stays in the market.

I-Pod – Greatest hit of 21st century. I-Phone – Greatest flop of 21st century.

Incredible Gizmoz

Check this out guys! I found it great – perfect for friday afternoon, and perhaps for my secondlife avatar. If you are still thinking why I am doting my animation, all I had to do was to upload a picture of mine and this got done automatically

Kaval Kaur on Entrepreneurship Part-1 and Part-2

Kaval Kaur is a co-founder of SUFI, an incubator and angel investment company with offices in the USA and India. Kaval and her husband Jasveer co-founded Virsa, which was later acquired by SAP for a few hundred million dollars. Virsa is part of SAP’s Governance, Risk and Compliance business unit. I caught up with Kaval at the TiECon 2007 in Silicon Valley, where she was one of the master of ceremonies for the two-day event. I wanted to find out Kaval’s journey as an entrepreneur and how it all started.

In our conversation, Kaval outlines how her journey began. Founded in 1999 as a services company, Kaval and Jasveer had to change the course of their business midstream after the dotcom collapse and 9/11. Pushed to refocus and reinvent Virsa became a product company focusing on a niche market: security and compliance in the ERP space. How did they do that? What were the challenges they had to face? And how did they end up getting Venture Capital money? Why were VCs calling them?

Part-1 of the interview:

Part-2 of the interview:

Bird of Gold

McKinsey recently published its study on growth in income and spending of Indian consumer over next twenty years. It provides a great directional view of where the growth is, and where we might find ourselves in 10-20 years. Interesting read.

The Proto Team in Delhi: This Saturday

Proto has been discussed in this forum in various forms, and titles, and I have always enjoyed hearing the feedback that this community has to offer – as this community very much forms the crux and the core of the ecosystem that we are aiming to build. Here’s perhaps a chance to have that same conversation face to face.

We are planning to be in Delhi this saturday to meet with folks, mostly the startups that we are targetting to leverage, but also people who are thinking about embarking on a venture but have and are hesistating for various reasons. If we can understand the fear of most – atleast the rational ones – we can certainly look at building together a mesh that helps to overcome that part, so that we can go on to conquer new heights.

There are a couple of reasons why we are travelling: One of them is very much so that other people can also contribute and be part of this effort. Secondly, there is too much rumors flying out that Proto is a chennai-based effort, when it simply isnt – We are talking about a pan-asian initiative and it simply cant be held back by state boundaries. And following on those lines, we are also looking for a spot where we could have one of our sucessive events (For now bangalore and Delhi are the contenders). On that aspect, it would be crucial for us to meet with all the folks from different places. And last and not the least, we’ve always enjoyed the support of the folks from Delhi, especially those who have been involved as part of the organization, and it only makes sense that we make an effort to meet them in their city.

Do leave a comment if you are interested in catching up, and we’ll co-ordinate on that accordingly. It would be good to meet and put a face to all the names on the list as well.

Update: There is a wiki setup, for people who are interested in the meet. Do add your name to the list, so that we can plan accordingly.

Is Manufacturing the future of Banking?

The Banking world is undergoing and major shift in the way banks have to function and compete in an evironment where the regulators keep coming up with new demands on making the system more transparent not just for the supervisors but also for the customers of the banks.

This is a big challenge for an industry which is still using systems which are on mainframes with cobol based applications. The situation is further aggravated by issues related to years of unplanned application development and customer data duplication across platforms like unix, mainframe, web based apps etc.

So, does the bank really know its customer when the customer’s information is spread across 30 places and one end does not know the existence of the other. Provisions of the Patriot Act, SOX, GLBA, Basel II demand that banks are able to trace their transactions and protect customers’ privacy.

Given the above scenario, banks have started scrutinizing their existing systems and processes and the role of IT as a business enabler. Many are questioning whether IT should be a strategic investment or just a commoditized service. Why should a bank spend millions on keeping a huge set of applications, people and infrastructure which is inflexible and cannot respond to changing regulatory and competitive pressures? Several banks (esp. in Europe) are coming to the conclusion that it is best to use Software as a Service (SaaS) or a customized of the shelf (COTS) product which is owned and maintained by the service provider; the bank just uses and pays for it as a service. The infrastructure will be provided by an infrastructure provider again as a service.

This is a scenario for which most small and midsize IT service companies are neither prepared nor capable of handling. Typically, the customer will expect an IP driven vendor who will then collaborate with other vendors to provide a solution quickly and without years of customization effort. The service provider should be able to scale up or down the service or capacity on demand. The service provider should also be able to take over people of the bank on their rolls; the customer wants the vendor to have a skin in the game.

The results are visible. Banks are increasing coming out with very large (billion $) deals which they want to outsource to a select group of vendors. Smaller players like Patni, NTL are getting elbowed out by large players like Infosys, TCS, Wipro, Accenture and IBM because the annual deal size itself is sometimes more than the revenue of the smaller company!

Companies who invested in building products and IP have an edge. Even if they are small, they can become suppliers of ‘process components’ which will be then used to provide the complete service. The companies in real danger are those who are pure service providers. I foresee a scenario in which there will be three tiers in ths Banking supply chain.

Tier 1: The Banks (customer)
Tier 2: Manufactures – Large service, solutions providers providing end-to-end solutions to customers
Tier 3: Ancilliaries – Services companies that provide components/services to the manufactures

One analogy that comes to my mind is the automobile industry where companies like Ford and Suzuki make complete cars for the customers but outsource a number of components to suppliers who make components as per their specifications. Then there are those suppliers who make generic components for a range of automobiles (e.g. tyres). For example the customer knows that the tyres in his car are not made by Ford but he does not care as along as the product is good. These generic suppliers are in themselves very large and profitable, but they cannot survive on their own because their products depend on the final product i.e. the car.

I believe that this is a likely scenario in the Banking industry as well. So, the key to survival for the smaller companies and even start ups in this industry would be to build IP or become specialized in certain services which they can offer to the bigger IT companies (“the manufacturers”) instead of directly offering to the end customers (the Banks).

Anu Shukla on Entrepreneurship

Anu Shukla is a serial entrepreneur who is currently busy with MyOfferPal, her third start-up, now in stealth mode (it recently received VC funding).

At the recent TiECon 2007 in Silicon Valley, Anu introduced and moderated the session with Meg Whitman, head of eBay. I caught up with Anu afterward to talk about entrepreneurship, a subject that she’s passionate about. You can read more about Anu here.

The Pmarca Guide to Startups-Part I and II

From Marc Andreessen(Founder, Netscape, Opsware and Ning)’s blog

The Pmarca Guide to Startups, part 1: Why not to do a startup

The Pmarca Guide to Startups, part 2: When the VCs say “no”

Is it interesting?

Raj Jaswa on Entrepreneurship

I am doing a series of interviews with entrepreneurs, VCS and technologists on entrepreneurship and this interview with Raj Jaswa is part of that series.

Raj Jaswa, is President of the The Indus Entrepreneurs, Silicon Valley. I was curious to find out about the early days in Silicon Valley (the late 1980s and early 1990s) when being an entrepreneur was not an easy task, especially if you were an immigrant. If you flashback to the early 1990s, getting VC money or going IPO was not an easy task either.

Raj was one of a handful of entrepreneurs of Indian origin in the early 1990s involved with the successful founding and IPO of a start-up called OPTi. What creative means did he and his founders use to make their start-up OPTi a success? How and where did they market their chips when the U.S. market was dominated by Intel and AMD?

After Opti, Raj then became involved in another company called Selectica, which had one of the best IPO debuts during the dot-com boom. In 2000, Raj was named to Forbes’ list of “Top CEOs: Corporate America’s Most Powerful People.”

After two successful companies, Raj is now involved with TiE and in mentoring a new generation of entrepreneurs. I asked him if he would be interested in starting a new company. Tune in to find out what he has to say.

Just 85 lakh internet subscribers?

A TRAI report (17 April, 2007) contains statistics on Internet “subscribers”: 85.47 lakh in number.

Of this, the total number of broadband subscribers are 20.54 lakh as of 31 December 2006. That would probably comprise cyber cafes, home users and some SMEs. Alarmingly low, I think, though the quarterly growth rate of 13% might be a saving grace. (Extrapolation: 90 lakh connections by 2010)

I assume subscribers = number of connections rather than number of users. But even with an extrapolation of 5 users per connection, we’re talking about 10 million (1 crore) broadband users, and about 40 million (4 crore) users overall. That’s just about around IAMAI’s estimates of 42 million users by March 2007. Even there, the number of “active users” (access the net at least once a month) is about 30% lower than the reported figure.

Assuming most SNS and other web sites want a million users at least, and most sport content that serves broadband users the most, are we then way too early for the mushrooming internetworking portals? With an addressable (“broadband”) market of about 10 million users, growing to about 40 million in three years it may just mean a “not-just-the-web” strategy is quite as important for many portals – like the travel and job portals have done, selling through travel agents and offline recruiters/job fairs instead. Or, it means consolidation or desperate sales of funded companies once they realise that the market isn’t large enough for exits in the investors’ return horizon.

It’s time, perhaps, for the upcoming ventures to start thinking about making their valuations sound good with sub 500,000 users as well. What do you think?

Startup Dunia has an interesting post on this. (Which is where I got the links)