Archive for May, 2008

The Internet according to Akamai

Akamai has published the first in a series of quarterly looks at the state of the internet (warning, requires registration), which they would be in a unique position to report on. From the summary:

Starting with the January to March (1st quarter) 2008 time period, Akamai will be publishing a quarterly “State of the Internet” report. This report will include data gathered across Akamai’s global server network about attack traffic and broadband adoption, as well as trends seen in this data over time. It will also aggregate publicly available news and information about notable events seen throughout the quarter, including Denial of Service attacks, Web site hacks, and network events.

Here is a local copy of the report, for those who don’t want to provide an email address.

ESOP or something else?

We have had discussions earlier here on attracting great talent to startups, and what the key motivators are. Clearly, there are other motivators besides money in a startup decision – such as sense of purpose, role that one can play, and so on. However, the more I talk to entrepreneurs around, the more evident is the lack of a financial incentive that works.

Couple of weeks back, I was in a group of entrepreneurs for a closed-door discussion on this. There was near unanimity that employees do not value ESOP grants. There were still some people who were allocating ESOP, especially to early/core team, but with very little conviction. One of the things that also came up was whether the entrepreneurs themselves understood this well enough and believed that it can make a difference.

In my opinion, the key gap is in building a perceived value around this tool. It is about highlighting and celebrating successes. Early/core employees need to believe that if this thing works, they can make far more than they will ever earn (yes, even after accounting for high salary increases that we all experience). Towards that end, it will be good to get some success stories in response to this thread, where key employees have landed up making significant returns through ESOP in startup situations.

Also, would love to hear people’s thoughts on alternate incentive mechanisms that serve the purpose. In my opinion, the key attributes that such a mechanism must satisfy are:

  • Alignment with value creation objectives of shareholders
  • Retention effect/ Accumulation effect of rewards
  • Ability to attract distinctly better talent, especially against large companies
  • Performance orientation

Q1 2008 | India VC Deals

VentureSource has published a news article on VC activity in India for the period Jan – Mar 2007

Venture capital firms invested $98.9 million in 16 Indian companies in the first quarter, a fraction of the year-ago period but about steady with the quarterly pace of 2007, according to data released today by VentureSource.

It’s difficult to compare the data to last year’s first quarter, when investment suddenly skyrocketed with 37 companies raising $512.7 million. But the next three quarters of 2007 averaged out to about 13 companies raising some $113 million.more here

Internet has its decent share in terms of Value & No. of Deals – Cleartrip and BharatMatrimony are large size deals done in Q1. Among early stage ventures: Ixigo, 123Greetings.com, Kijiji India, Study Places are few, I am aware

Regards,
Mukul

Need for PR

Does startups need the help of PR folks in taking the product/service to the mainstream ?

YES 

NO 

Discussion continues here

Where Are India’s Innovative Companies, Products and Solutions?

Interesting Post

Where Are India’s Innovative Companies, Products and Solutions?

India produces some of the brightest minds in technology, science and medicine yet has not demonstrated any truly large scale and breakthrough innovations in those fields. more here

I mean…..why NOT fill the gaps?

Mobile devices will rule in the next 5 years

The Churchill Club’s annual Top 10 Tech Trends Dinner discussion post is here.  The panel has some cool VCs in it. The post has important predictions and some cool factoids

  • In Europe, cell phones are 8% of credit card payments 
  • Projectors in cell phones in next two years. More than one camera per cell phone
  • About 90% of all venture returns made by about 5% of the people; global supply of capital has kept pouring in. Returns come from a very small set.

 Lots of mobile devices related predictions. Go read the full thing.

Vision India 2020 Series: Multi-Billion Dollar Venture Ideas

Here are pointers to the articles so far in this series:

  1. Preface
  2. MIT India: Engineering Education
  3. Urja: Global Fashion Brand
  4. Lucid: K-12 Education

MIT India and Urja have also generated a great deal of discussion, which I welcome you to read and participate in.

Lucid is a new piece, and I expect, will generate similar discussion soon.

TiE Canaan Challenge | Deadline Extension

Hi – Last date for submitting entries for TiE Canaan Challenge has been extended to 25th May.

We are seeing a good response. Also, CNBC TV18 has been roped in to feature the Winners and the working of Challenge in three series.

Regards,
Mukul

Trips

A nice little stat to chew on a sunday morning.   

PS : “Transit” refers to Public/mass transit systems.

TrendWatching in India

Another day, another idea. This time, it is TrendWatching.

I define TrendWatching as a disciple where one observes (not sees), engages people in conversations (not interviews), identifies what is popular (not market research) and finally using these popular social objects to help businesses.

Why TrendWatching?
Market research as we know it is dead. I have huge reservations against the very premise of market research. If the respondents know that they are being researched, they more likely would come up with made up stories rather than answers. Then there is an entire issue about intelligence and commitment of the research agency. How do you know that interviews were actually conducted? How do you know that there are no errors in recording? And other millions questions like that.

TrendWatching can be the future of market research. Although it has been there since early 1990s and there are numerous companies making decent money predicting trends, yet it is still not taken seriously. Companies in India don’t even know about it. And hence the opportunity.

Predictions made by trendwatchers might or might not be accurate but they are far superior than a traditional market research. Trendhunters have been reported to be very accurate in predicting trends, fads and about-to-be-cult things in technology, pop culture, fashion, entertainment, media and youth.

How can one benefit from TrendWatching?
If you are a business and you know whats in vogue, you can use it for your brand to get new customers and keep existing ones excites. It also helps make your brand more relevant, pertinent and contemporary.

Its like looking in the glass ball and getting a perspective on things that would be cult in years to come and your business and brand can use these inputs to succeed. If I can draw an analogy, in all facets of life we have people who predict the future based on some logical assumptions. Institutions like meteorological departments, astrologers, stock traders, policy makers, governments, economists etc. so it all the time. Why not do it with business? And if you are accurate even at 1% of times, there are immense gains to be made.

If you are an individual, you can figure out what is in vogue and you would not be known as a drab person. It will elevate your social status in your peer group.

How to go about TrendWatching?
It involves using Malcolm Gladwell‘s now famous work titled The Tipping Point. It assumes that there are certain people who are very much involved into one activity and are experts by the virtue of their indulgence. If we bring few such experts and let them talk to each other, we can have interesting observations. There is no real innovation happening with these methodologies. Most of these are simply making incremental changes to what people in other evolved economies are doing.

The biggest stumbling block and (as Michael Porter would put it) the entry barrier to this business is access to these people. You need to be able to identify these people, get them to work for you and get into a conversation. And moment we talk about people being a key criteria, we are talking about emotions and uncertainty.

End Notes
I see immense business potential with TrendWatching in times to come. Especially in India. This is one of those businesses where capital required is minimal and business can generate awesome cash flows.

I invite readers to share their perspectives on this. Please be critical. And as always, post reproduced from personal blog.