Archive for September, 2007

Digital India 12 – 15 Dec 2007

We’ve been talk long at IAMAI (Internet and Mobile Association India) about setting up a consumer facing expo with the twin aim of

1. giving our members a platform for interacting with consumers live, which is a critical component of marketing, severely lacking in India;

2. Increasing consumer awareness of the benefits of the Internet, thus helping accelerate the growth of the Internet in India.

India is possible the only major Internet nation without a live platform for product launches. In the US, it is possible to be part of a live Internet-event practically every single day, with cities like San Francisco seeing an event a week. In the US infact it is rare to see startups and new product launches building awareness through billboards and advertising, as they prefer live events which generate far more buzz.

Thanks to the efforts of IAMAI president Subho Ray, this is now a reality. 12 – 15 Dec sees Digital India 2007 at Pragati Maidan Delhi. This is a big tent event expecting a qualified 100,000 crowd of students in the day (via school tours) and business card visitors/students in the evening.

It is expected that all Internet movers and shakers will be present and many will have large displays. For startups 10×10 booths are available at a nominal Rs. 100,000. Those interested please contact Mehul Gupta: Mehul @ IAMAI dot In.

Positive Thinking/Integrity

I have no desire to offend anyone with this post but it is about time the confident India ( post T20) thinks positively and stops petty thinking.

My aim in posting once in a while on Eko or on other things is to get a few people to think positive and big and to share experiences both good and bad. One can learn from success or failure.

I do not need this forum to get publicity for Eko. Eko is not a web traffic type play and at this stage we have all the attention we need. I have turned down a few requests from media to write about Eko because we are at a very early stage.

If I write about founder chemistry it is because I find it delightfully refreshing at Eko and I am not trying to signal anything except reminding myself and others at similar stages on the importance of positive vibes.

At Eko we are quite excited about a “Circle of Trust” document that we are working on. Our inspiration for this was an integrity document that Mindtree has on its website ( available for download).

I will let you know when we have our document completed and available for download. Just as Mindtree inspired us maybe we can inspire someone else.

Venturewoods back online

Admin Post: There was a database corruption on venturewoods which did not allow any comments to be posted for past 24 hours. We have lost some comments due to that – if you find your comments disappeared, please feel free to post again. Post Authors: if you have notifications of comments on your email and those comments are not appearing, please help out by posting the same again. Continue to look for suggestions and volunteers for venturewoods upgrade.

Venturewoods Ahead?

This is an admin post, please feel free to ignore if you might not be interested.

We started venturewoods two years back, and largely on an organic basis, it has acquired traction in the community. There are a few thousand members who read venturewoods, few hundred who comment, and more than 50 who write on venturewoods. Personally, it has been a great platform for me to learn and share with the broader community, and maintain the mental connect that could have been lost so easily as I moved from an entrepreneurial role to a venture investor role.

Multiple people have spoken to me in the past to extend venturewoods beyond just blogs. Suggestions vary towards becoming an entrepreneur-network, to offline events, and so on. Some such suggestions had given rise to venturejobs and venturetalent sections, which I believe have enabled a few people to find each other. This is a call for action – I would like the following to help us take the next step, and am looking for volunteers to help us achieve this:
- Suggestions on what direction you would like venturewoods to take
- Specific site functionality that you would like to add or organize better
- Product+Project manager who can take ownership to get this done
- Technical folks who can help us implement this on a suitable content management system (dont worry, whatever we do, we will not make this a white elephant :) )

I hope this thread generates as much participation as some of the previous ones have – it will shape what this service looks like a few months from now!

Facebook End Game

I am a Big FAN of Facebook and like thousands of internet enthusiast I see Mark Zukerberg as a HERO . He has created a Giant distribution Platform called Social Graph . He did it on his vision of Internet and social media . Some of his moves like News feed, Opening up the platform for Third party application developers , Not doing a revenue split deal with Application developers and finally Facebook Fund are nothing short of a Masterstroke .

He has turned down the deal from Yahoo , he is apparently on a lock horn with Google and he insist to maintain FB as an independent company . Cyberspace is abuzz with the Fear,excitement and anticipation of next move of this Boy wizard . Most Frequently Asked Question is

How will he plan and time his Exit ? Will it be through IPO or through Acquisition ?

Most of the folks think that Facebook will go public at a valuation of some where between the range of 25-35 Billions USD . Thats a lot of money .IPO Advocate says that FB will go public because there is no one who can afford to buy them at the valuation FB team want .

I think it will not be a good move for FB to go public . They should sellout .

Why ?

Short and sweet answer is Due to unrealistic expectations . When Google decide to go public and filed S1 . Their earning details came as a pleasant surprise to many folks . Same was true for mostof the dotcom which went public , world was not aware of their massive revenue . think of EBAY.

This is not the case with FB . No matter what number they put as their revenue in S1 , it will always be a disappointment . In a hyped environment the same hype machine will work against him and it can spiral FB to doom . This is not to say that Mark and VCs who invested in FB will not get good ROI if they go public . they will , but Mark’s vision of FB will be lost .

You may say that haven’t we seen this before ? with Netscape ? YES . But Netscape was a pioneer and back than there was no history behind internet , things are different today ,we have a DOT COM Bust behind us . Netscape too got some MAD money valuation but they have a good revenue from their enterprise clients . This is not the case with FB .

Fact is that in spite of all his greatness ,Mark can’t be exempted from the BIG question about viability of FB as a business .Once FB file for IPO they will have to face this Question every quarter .They have created a seemingly”Perpetual Motion Machine” . If they stay independent they will have to feed it with something . that “something” is not apparent as of now .

Why Sellout??

I think for FB ,biggest advantage of selling is that selling out would give them a reason [ Excuse ] for course correction .

FB is a Great distribution platform ,they have done a great job by separating application and Social graph . Now they control the social graph and you and I can write application to ride over it . thats all very good . but This was not something which could not be copied by My Space or Orkut . so in order to differentiate their offering Mark played a Brilliant move by opening API for free. Whole world was at their feet.

This limelight comes with its own price tag . There were many instances where a one man company made a popular service . FB user started to use it but it was hard for the programmer to sustain it , and company went bust . Leaving FB with an unsupported application and unhappy users. Our Hero made another master stroke “FB Fund” .

What worry me is that He is doing all this with VC money . not from FB Revenues . VC Funds will not last forever and in absences of a massive revenue these Question will haunt FB too . if not now than may be some years down the line .

Opening platform for free was good move but moving away from “Free” to Fee ,under Marks Leadership will take sheen from his image . so they need a scapegoat . and i feel impact of such policy shift are moderate if there is a change in ownership .

We have example of GrandCentral , a startup which offered a telephone number for life , Once you have a Grand Central Number you need not to change it when you change service provider , move to a new city or whatever . They promised “One Number for One Life ” very romantic .Many people [including me , just for the heck of it ] signed up for it . sometime down the line .Grand Central got acquired by Google . with in few weeks of selling out . Google changed the policy and issued new numbers to existing GC users . There was a small outcry but Google silenced them by offering money for reprinting Biz cards .

Grand Shift in ideology , little flutter , little money and things are going on smoothly since , GC is still signing new users .

If Tomorrow FB wants to take a corrective action like say a 5-10% revenue split with its existing app developer or they want to sell Flash overlay adds on small widget based TV on every profile . Given his image , doing this will be hard for Mark. So he may collect the money and run to do next venture . but if some other company say Google or MSFT do it ?

Like grand central there will be little unrest and people will abuse MSFT for greed and FB will keep going . In my opinion that will be a Good End game for Facebook exit .

Extra :

These are my view and I admit that there is a possibility that I might be wrong and Mark and his team can come up with some new strategy to address these issues and stay independent . I will be a happy man if thats the case .

Whats your take on FaceBook Endgame ?

PS : this post was originally published at my blog . but i felt that there is a better audience for it at VW so i am posting it here too .

Eko – Another baby step

Things are buzzing at Eko and we have just updated our website to let people know a little more of what we are upto.

In a startup working on the right things and keeping founder chemistry strong are important challenges. We think we are doing well on this score.

We have agreed on three key goal areas for this financial year. These are # of active customers that we want to exceed, an upper limit on the money we are prepared to burn without venture funding and a fundraising goal.

This helps us keep focused.

Your comments are most welcome.

A New Kind of Incubation Model. Part II

For those who had asked about how incubation centres work, I believe the comments in the previous post would have helped.

To summarize, an incubation centre supports an entrepreneur with an active advisory panel, infrastructure and with some financial assistance to help them jumpstart the process. That’s pretty much the gist of the matter.

As a commentor in the previous post mentioned, the system has a flaw.

For one, the entrepreneurs in an incubation cell are quite shielded from any immediate danger. The protection and support, sometimes even turns a great potential company into a mediocre one. Without being hungry, and being foolish, entrepreneurship seems to die out from its essence of radical pathbreaking.

The second aspect is that the value proposition that an incubation centre brings into an entrepreneurs life is that, they have a panel of advisors to help groom these entrepreneurs. These advisors are quite some experts in very specialized verticals – say marketing, HR, Scaling, Technology, Investment etc, and provide their inputs to mold the company into a solid one.

I believe a company that comes from an incubation centre is very much limited by its mentors. Most of the time, the mentors are chosen not to experiment with radically new and different business models, but to execute a well-trodden one in the life-cycle of a new company. What usually ends up is a newer and smaller version of their own company that they might have built or have been part of.

This always seems to be the case, with most incubation centres.

The issues seem to be a few:

1. Limited by Mentors
2. Over-Protected from the necessary tribulations that an entrepreneur and team require to harden and survive
3. Isolated Infrastructure
4. Highly biased focus: Either too much technology focus, or too business oriented, since all incubation centres are academic centric
5. Lack of being grounded in the reality of what the customer wants (some Incubation centres deal with this quite well)

These are the basic ones to start with.

I do like what the Y Combinator and CRV Quickstart guys are doing. Also with the recent addition of Obvious, (the guys behind tweeter) to the list, its possible that the next successful incubation model will follow suit along these lines. With Yahoo! hiring seasoned entrepreneurs to run their internal incubation centre, there is a pattern that we are starting to see emerge here.

More on that in the upcoming post…

Comments

What is a startup?

Open Coffee Club’s (OCC) third meet happened successfully in Bangalore yesterday. OCC has been getting good amount of traction in Bangalore since the day it kick off.

However, my key aim of writing this post is not to publicize OCC, rather, to ask a straight and simple question. ( This question was asked by one of the associates from OCC, yesterday).
What is a Startup?

My question however, doesn’t end with this, because, today’s startup wont be a startup tomorrow. How do we say or how do we differentiate between a Startup and a mid size company?

Any thoughts?
Cheers,
Vaibhav

http://technofriends.wordpress.com

The Need for a New Kind of Incubation Model

It seems that at the rise of every economic cycle, old structures of the past do pop-up again. Incubators are a good example of that. They were around during the dotcom bubble and they are back now. I am not talking about India, where incubators are meant to be the last refuge for most entrepreneurs who are starting up, but am referring to the situation in the valley here.

That takes me to a topic, I want to talk about.

For those who aren’t aware, I am involved with an Incubation centre, and a very well known one at that – some would even say that it is one of the most successful ones.

‘Success’ is a very relative term I would say. I would categorize success as the creation of the company that can exponentially grow and can disrupt markets. It doesn’t make sense otherwise to put all the hardwork into an entrepreneur, team and company (for days at a time) for a single digit equity percentage otherwise. The numbers simply don’t add up if its going to be just another surviving company, in a world filled with such companies with mediocre revenues. I am simply not interested. It’s also because there are plenty and more of resources to help out such companies. It’s a well-trodden and beaten down path and doesnt require one to walk someone along that path. I am more interested in the path breakers.

There are some folks who do think that the silicon valley was always breeding and breathing innovation. Actually, it started that way, died off and was revived again in ’95 when Yahoo was the story in town. Yahoo, in ways more than one, brought back the spirit of the valley. It goes to say that most of the hardwork in building a ecosystem becomes a bit simpler if there is a success story in the middle of it. It is just easier to rally for changes and to persuade.

The concept of an incubator has been around for quite sometime. There have been such facilities setup in the valley sometime earlier in the mid 90s and there are enough and more documentation available for all these initiatives.

I am starting to see more and more correlation between the events that occurred then with the incubation centres in the valley, and what is going on here in India now. They are all churning out a lot of interesting, and good companies, but the “great” companies are still missing.

It worries me when well known Venture capital firms, with a bottomless fund size, are planning to start another incubation centre in an attempt to nurture innovation. If at all, an incubation center is the way to go, I think a really new kind of thinking is required.

This post has gone longer than expected, let me summarize the rest of it in part two of this discussion.

In the meantime, what are your thoughts? Comments

Norwest Venture Partners opens India office in Mumbai

from ET:

Norwest Venture Partners (NVP), a leading Silicon Valley venture capital firm, has opened office in India. The firm, led by Promod Haque, is best known for its technology investments. Its portfolio has 60 companies including 20 that are based in the US but have an Indian presence. Five of its investee companies are based in India.

Norwest’s India operations will be based in Mumbai and headed by Niren Shah as managing director. Shah was earlier with eBay in the US as senior director of strategy and ventures and before that with KPMG’s corporate finance team in India.

Two more executives are likely to join the team in Mumbai as the fund expects to finalise more India investments. Unlike a few VC firms that have floated India specific funds, NVP makes all its investments from a global fund. The investments are across the US, India and Israel. The firm has around $2.5 billion under its management with the current fund at $650 million. Mr Haque said the number of India investments may to go up from 10% to 15% of the total fund size.