Archive for June, 2008

Strategies for entering into rural market

The following are very generic comments for companies focused on rural market.

  1. Focus: The company/organization must focus on a single service unlike Drishtee or n-logue or Akshaya. However after achieving success with a product/service you may broaden your portfolio.
  2. Training: Training is essential for all the stakeholders in the company – employees, customers, vendors, etc. Why? Because in rural India, you have an abundance of raw talent that must be aligned to your requirements. In fact, sometimes you may have to start from creating the whole ecosystem before actually scaling up your operations.
  3. Adjusting to local needs: Rural India represents varied cultures, traditions, languages etc. So your model should be sufficiently flexible to adapt to local needs.
  4. Technology for masses: Use technology wherever is possible.
  5. Processes: Standardize operations in order to create scalable business processes. Actually, this paves the way for more technology adoption.
  6. Word of mouth advertising: In rural India, people love to be your brand ambassadors and talk about all good things about your product/service if they like it.
  7. End-to-end service delivery: You need to make sure that the consumer gets service-as-a-whole delivered. For example, if you just collect a resume and charge the customer rupees twenty for feeding into computer- this may not be scalable. However, if you collect a villagers’ resume, provide him a job earning him rupees 5000 a month and collect rupees 20000 for your efforts – this would definitely work with rural people.
  8. Emotional Attachment: Rural people place their trust in your product or service – so you must live up to it. It is not just a commercial transaction that you engage in with them but more an emotional agreement between you, the marketeer and your consumer.
  9. Communities: Rural people live as communities or extended families. You need to align with local communities following the trick, “trust is transferable”.
  10. Efficient distribution: Rural India is sparsely populated and so it is obvious that the distribution costs are high. Hence, you need to innovate to bring down these costs.

Security startups to watch

Here’s a list of some bright and upcoming security companies which, in my opinion, have a promising potential:

Endeavor Security (www.endeavorsecurity.com, Rating 4/5) – My bets are on this startup. Endeavor is an early-stage company working on a truly disruptive security framework which could be the next big thing in Internet-wide threat analysis and actionable intelligence. The problem with existing intelligence players is that their offerings are not truly actionable, i.e. they don’t cover the complete cycle (detection-reporting-remediation). Secondly, none of them have the capability to provide vendor-agnostic remedial input. Third, no one’s able to keep pace with the changing threat landscape. Fourth, most of the industry analysts wrongly believe that the need for such a service is failing. Security intelligence is still scattered and raw. There is a big response gap which separates intelligence from the effectiveness of deployed products and services. If someone is able to bridge this gap in a product/service/vendor-agnostic way, then there is a great opportunity for setting up a truly early-warning and preemptive service offering. Backed by Department of Homeland Security, this company has taken its first steps to test the waters. It has launched solutions like FirstLight Signatures (signature service for various IPS, UTM and firewall vendors) and FirstLight Active Malware Protection (gathering latest malware data from deployed sensors and relaying it across to the AV vendors before the outbreak occurs while protecting their customer’s perimeter on-the-fly). I had a brief interaction with one of the founders and they say that a SaaS offering is in the works. All this makes it a company to watch out for. Their only challenge would be to get some gung-hos in the management team and build a very strong research back-end.

Rohati Systems (www.rohati.com, Rating 3.5/5) – Well, nothing groundbreaking really but a credible enhancement over existing offerings. They are working on a layer 4-to-7, policy-based firewall controlling access to various applications and resources, with awareness about their business context and compliance regulations. Alan Shimel has termed it as “a logical extension of identity based access control” and I agree wholeheartedly with him. They are not alone in the game, with Palo Alto Networks giving them some heat. However, they are garnering most of the media attention due some highly-accomplished Indian techies from Cisco in their management line-up.

Mocana Corp. (www.mocana.com, Rating 3.5/5) – This relatively-older company is gradually coming into the limelight. They are building security infrastructure for all kinds of networked devices, from mobile phones to coffee makers. They have acquired a small Indian company to setup their offshore R&D base in Pune.

An Attempt to work at a startup

Hi everyone. This is my first post. A quick introduction about myself. I am Vivek and currently located in Chennai. Aspiring to be an entrepreneur in the days/months/Years to come :) This article is an attempt to understand the process of hiring at a startup. Your comments would help me understand what went on.

To understand the situation, you need to know that I have been trying to work for a startup because I thought it would give me the flexibility to learn how to run one down the line. Having said this, I always knew the kind of challenges and sacrifices that I would have to make if at all I joined a startup. But I am also of the opinion that the passion to work in a startup varies with your association with the group. For instance, if you are the founder, you would be practically working 24×7 and also in your sleep you would probably be working out strategies. The level of commitment would slightly reduce say for a co-founder who came on board a little later and keep going down with a new hire. This is true even more for a company which is performing regular hires (post funding).

Now, having said this (and I am sure many of you would agree/disagree), I was called by one of the founders of a company to work with them. We had various rounds of interviews, tests and lengthy discussions. Coming from a product management/marketing background, I was offered a marketing role in the organization. The company itself was funded by an entity and were in a position to offer stable income to the new recruits.

At the end of these interviews, I was selected and offered the job. However the pay was significantly lower than what I was drawing at my current job. The reasons stated included that I come from a different background and the nature of the job would be entirely different from what I have been doing all these years, that a disparity might be created if they even matched my current pay; let alone exceed it.

My expectations were not high at all. To begin with since I knew the pulse of startups, I was ready to accept an offer which would be below my current CTC and also fore-go other benefits which are offered in a corporate world. I was also prepared to work long hours (startups don’t have any working hours, isn’t it?) including weekends if the situation demanded. But the company simply couldn’t meet my threshold of acceptance and the offer was cancelled as a result.

My questions to fellow entrepreneurs here are:

  • How do you balance the pay packet for a potential employee? Please give two scenarios – (a) You are self funded. (b) You are financially backed by an angel or a VC.
  • Would you consider the prior experience of a candidate from a different domain, or would you simply consider him/her to be a fresher from your company’s perspective?
  • What kind of commitment would you expect from the new hire? What kind of notice periods/bonds would you look at?
  • What are the legal aspects which you would look into before hiring someone? Would you do extensive background check on the candidate or rely on references or just hire him/her for what value they can bring in?
  • Would you have an age criteria to hire? In other words would you believe that a 21 year old could be as valuable as a 40 year old?

Your comments would help me ascertain where I should have my expectations as a potential hire/employer.

Services going mobile in Rural India

Offering services to Rural India is expensive. That is because, peasants live in sparse locations and so, distribution costs are very high. That is why, one needs to innovate here. One of such innovation is to offer the service, mobile.

I used to wonder about the business model on providing Internet service on cycle rickshaw to Rural population in India. Ultimately it failed in terms of scalability. And nowadays I hear about many such services offered on move. In all of those services, Direct-to-consumer is the mantra. These are:

  1. Court: Indian government launched its first mobile court – an air-conditioned bus that travels to far-flung villages in order to bring justice to villagers doors. A judge follows the bus in an air-conditioned sport-utility vehicle.
  2. Hospital: “Smile on Wheels” is the mobile hospital project of ‘Smile Foundation’. Under this program, five vans equipped with X-ray machine, ECG machine, basic pathological services for blood and urine test, ante-natal and post-natal services and an out-patient department for common ailments travel on the roads of states (UT, CG, MH, OR, UP) covering 750000 population.
  3. Hospital on Train: Impact India foundation in support with Indian Railways has launched a train equipped with three operation tables, modern surgical equipment and accessories, kitchen, restrooms, sterilisation equipment, recovery room for the patients, audiometric/ophthalmic room and X-Ray room, including training facilities for up to 50 paramedics. Surgeries are conducted during its four-six week stay at a particular location. Each five-week stop costs around Rs.2 million (Rs 20 lakhs).
  4. Science Train: The Science Express – a mobile science exhibition on a train that showcases current and futuristic research in various areas, including information technology, biotechnology, health technology and systems, technology of materials and space and is aimed at inspiring young people to pursue scientific research. Reception of this service was amazing.
  5. Automobile Spare parts: Satyam has created a mobile auto showroom cum service center, which can be taken door-to-door in a Bus, called Edow. This bus will be equipped with everything an auto dealer needs, a display area, a workshop, a sales office and systems, hi-tech display systems and high speed connectivity. It expects demand of 40,000 for such buses in India.
  6. PCO (manned pay-phone service): Idea Cellular Ltd has launched an unique Shared Access (Voice & Data) PCO for Rural India. Rural entrepreneurs can sell airtime on their mobile phones to people in the community wishing to make a call or send a text message. This innovative approach allows entrepreneur to set up a payphone business for just the cost of a handset. Specially devised software with a printer will be developed to enable the owner of the mobile handset to provide a bill if required to the customer making the call. Call charges are also displayed on the handset to ensure transparency in the transaction. Additionally, Idea will offer shared Internet access in these rural communities to provide an even broader range of data services.
  7. Female on move to sell FMCG products: Shakthi is, a very innovative program of Uniliver, for distribution of FMCG goods to Rural population. Uniliver trains rural women in order to improve their selling skills and turns them as Uniliver’s saleswomen.
  8. Micro-business school: Mann Deshi Udyogini is, a Micro-business school on a mini bus, to solve the skill shortage among entrepreneurial rural women. Courses do not have any pre-qualification criteria and the curriculum is entirely driven by the needs of rural women. Courses range between one week and three months in duration and course fees start from as little as Rs. 25 (less than a dollar). Courses focus on technical skills, marketing skills, managing finances and confidence-building. Courses to develop technical skills, such as goat rearing, screen printing, selling cell phone recharge coupons, bag-making etc are being offered currently. Certificates and graduation diplomas are issued on completion of these courses which can be used to obtain micro credit.:
  9. Retail stores: 3A Bazaar is India’s first mobile retail company running on vans. These vans carry goods worth 2-2.5 lakhs of rupees everyday from a storehouse to about 700 villages. However, most of the villages are visited weekly or fortnightly or monthly. This fits with the irregularity of incomes of villagers and the mobility eliminates the drawbacks of a static rural retail shop. The daily average sales are in the range of 8-10 thousand rupees.
  10. Tools on a Truck: ‘Bosch Vaahan’ is a mini-bus which carries sophisticated Power Tools to rural areas. A wide range of woodworking, construction and metalworking tools catering to the needs of rural carpenters, metalworking artisans, plumbers etc are carried by the ‘vaahan’, which visits different villages. Product demonstrations and information sessions are conducted by the ‘vaahan’ officials in rural areas. Rural artisans can try out these tools for their work. The tools are available for purchase to rural artisans at subsidized prices. Bosch has tied up with several banks, including Canara Bank and Andhra Bank, to offer attractive loan schemes for the rural folk to buy these tools.

There could be many more such services.After listing all these services here, two points came to my mind.

  1. Which of the above projects are scalable & sustainable?
  2. Are there any other potential business opportunities to launch them as mobile. For example, I believe, cellphone spare parts on wheels can be a good candidate for the future.

10x Faster Enterprise PC Backup

Value Proposition

  1. 10 times faster PC backups with 90% reduction in bandwidth and storage utilization.
  2. Never lose a file. Ever – Timeline based, from the past Restores.

Where its useful ?

  1. Remote backups – low bandwidth scenarios like – remote-office/off-site backup, traveling user backups
  2. Local backup – Savings in time and storage space.
  3. Bare-Metal Restore – Solution is best suited for fast and efficient bare-metal (OS+data) restores.

 How are we doing this ?

Enterprise PC data is increasing at a rate of 40% annually. And within organizations, more than 80% of this PC data (emails/documents) is common between users. This is also validated by Gartner Report (Mar 2008) and MS Report (SIS and its effects in Microsoft).

Druvaa inSync enterprise PC backup solution uses advanced data de-duplication technology called – “SendUnique” to identify duplicate data before the backup starts. It checks with the backup server if the data (file/email) being backed up has already been backed up by any other user and then backs up only unique data. This boosts backup speed by up to 10 times and reduces bandwidth and storage usage by 90%. The fingerprinting used is powerful enough to figure out even same paragraphs between two documents.

Example: HR sends same email to 1000 employees, If one guy backs up, 999 would skip it during backup.

User Experience

This is totally transparent to the user, all he can see is a reduced backup time, which is even more critical for traveling and off-site based employees. While restoring he can see a timeline view of all his backed up data. He can choose any date:time to restore entire data from the past !

 Other Business Use cases

This is a truly unique concept and can be extended to PDA and server backup as well.

Yes, we filed two patents to protect this IP :)

More information

  1. Animated Demo
  2. De-duplication explained
  3. Product Features
  4. Benchmarks
  5. Background of De-duplication (and attempts made by others).

Beta is available for downloads. The product is priced $35/Laptop/annum and free for SOHO/Startups.

I would be interested in knowing how you think about the idea and product.

Venture industry in US slowing down?

A piece, via WSJ, provides some sobering stats:

There were 844 venture firms investing in U.S. companies last year, 40 fewer than in 2006, according to the latest data from VentureSource, a research unit of VentureWire publisher Dow Jones. That is down 30% from the bubble year of 2000, when there were nearly 1,200 active investors.

The total includes a substantial number of firms–224, or 27% of the total–who didn’t back any new companies last year, an indication that the ranks of active investors will continue to thin.

The post goes on to give some more data about the US-based National Venture Capital Association’s members:

Heesen said he foresees a 15% decline in the next two years in the total number of venture firms investing in the U.S., many of them too small to meet the NVCA’s membership threshold of $5 million under management. The NVCA has about 470 member firms representing 90% of the venture capital under management in the U.S.,

Many of the active investors in 2007 did only a few deals. Less than half–45%–completed four or more investments. And 29% made just one investment.

What does the community think? Is there a sense of slowdown here in India as well?

List of mobile services and limitations

I believe that mobile is one of the most revolutionary thing happened in our lifetime. It would become the key enabler in the process of human development (socially/economically). The reason, for this, is the following services which would be available on a mobile sooner or later if unavailable now.

Note : All the following services would never be available on a single mobile phone. Any subset of these services would be sold in the market. So it means, one will keep multiple mobile devices.

  • Voice/Video Calls (local/national/international)
  • Documentation/Video Recording/Audio Recording – Blogging, Remotely updating office work, Softwares- Word/Excel/Powerpoint/etc, Creative Designs such as drawing,
  • Messaging/Chat/File Transfer – one to one, group messaging, group discussions, automatic notification, RSS feeds,
  • Music – Tune/songs identification through audio recording in order to download on iTunes kind of a platform,
  • E-Commerce – ordering groceries, Insurance policy, Photo-prints,
  • Ticketing or Booking – Air/ Train/ Bus/ Car/ Movie/ Hotel/ Events/ Any professionals’ appointments/ etc
  • Video/Audio on Demand – Movies, Story telling for children, Live video/audio streams
  • Access to content on web – Videos/ Images/ News Papers/ Magazines/Horoscope etc
  • Friendship/Dating networks
  • Matrimonial services
  • Search for person/object/location details – where, who, what, how, when-, object identification through photos,
  • TV – With time shift facility
  • Stocks/Investment
  • Navigation systems - Maps, Diksuchi, Driving directions
  • Banking
  • Location based payments (similar to credit/smart card) for uses such as parking lot fee, AVM, Pay any merchant such as autowala
  • E-Books
  • Teaching/TrainingE-Pen, Live streaming lectures, Materials such as Lecture notes, Presentations, Audio/Video Lectures,
  • Interactive Gaming
  • Diagnosis - Temperature, BP, Pulse reading through Stylus
  • Scanning - paper/photo,
  • OCR
  • Barcode Reader
  • Object Location Identification – RFID
  • Dictionary/Encyclopedia
  • Translation (Text/Voice)
  • Voting
  • Survey/Quiz/Feedback/Complaints/examination systems
  • Application filingJobs, loans, admission, other government services,
  • Remote access – Computers, Mobiles, TV, Fridge, Micro oven, Electric switches,
  • Identification – Software Key, Digital signature, Finger print scan, password,
  • Alarm/Watch/Timer -
  • Mirror -
  • Radio -
  • Mouse -

However, there are certain limitations to mobile which are the reasons for having limitations on the number of services. These are:

  • Display size – May have TV/Monitor output.
  • MemoryRemote storage may be used
  • Processor performanceMay use the resource of another remote high performance computer
  • Battery power
  • KeypadA foldable printed paper type wireless keypad may be used
  • Interoperability
  • Signal reach - signal boosters may be used
  • Environment
  • Water/Heat/Cold/Fire/chemicals issues
  • StandingPhysical stand may be used with flexibility in height and width

I am documenting complete details on each of the above services. If anyone wishes to collaborate with me, please write to my gmail id, malapati. Thanks.

Startups , Students and Universities !

One of the biggest constraints faced by a startup is access to cheap & quality manpower. Though you can get experienced techies to lead or manage your projects ( Thanks to ESOPS & the startup bug – a lot of experienced hands are willing to associate with bootstrapped startups) . But the real problem is about getting freshers to do the basic coding/marketing .With out paying say a 6k (minimum), it’s really difficult to find some good coders for your development team. Because these people are not in a position to work in a startup with out any pay or not comfortable with the bootstrapping culture.

I had interacted with quiet a few startups and most of them where facing the same issue ( Like they have a good tech guy to lead, but they lack the basic team to work on the project).

The best solution for this problem is to partner with Universities / Colleges and associate college students for your project. Here the universities role is to provide support to the students in interning with the startups by ways of faculty support, infrastructure etc. The advantage for students is that they get an opportunity to work on the latest cutting edge technologies / real life projects while the universities are in a position to provide students with practical exposure to enhance theorotical learnings. The startups get access to manpower for their projects with out affecting the bottomline of the company.

One question which may arise in your mind now is how capable are these students in terms of your requirement. The answer is firstly you are not relying on these students for building up your entire platform , but they are just doing a part of your product which is normally done by a team with out experience. ( For example for an online portal – the students can design the UI, the database , do content aggregation, do the documentation, market survey etc …..now if you needed 3 people for this you will be saving around 3 x 6 = 18 k/month ). Secondly the skill sets of a final year student and fresher are almost the same and what matters is their capability to learn and explore things.

 

Startups can allow students to use the project as a part of the final year projects, as well as provide them with incentives and by the time student pass out of the college if the company is well funded they can even recruit the student into their rolls.

Coming to our startup, we had designed a program called SCORE-MAT (SECURE CAREER THROUGH OBJECTIVE & REFLECTIVE EDUCATION in MANAGEMENT & TECHNOLOGY) for associating students with our projects as well as initiating R&D tie-ups with universities and colleges. We were successful in initiating a tie-up with SKIT college Jaipur and a team of 20 final year students are working on our projects from the campus which acts as a virtual incubator for the company. The program is wholly supported by the college and respective departments . Also a 4 member student team currently pursuing integrated Mtech at IT-BHU,Varanasi is also associated with the program and they recently were selected finalists for the IBM Great Minds Challenge 2008 for the Core Banking Solution they designed.

I think this is a good model which other startup can also follow. I believe if we can volunteer and form a common platform for linking start ups, universities and students it will benefit every one in the value chain.

 

 

ESOP Successes – Quasar Crorepatis

Quasar has been kind to share some of the success stories on ESOPs – these employees made about 1 crore each when WPP acquired a majority stake in Quasar. Thanks to Quasar for sharing the same.


Deven Dharamdasani
Business Director
Age 29
Joined Oct-2004
 

Gopikaa Davar
Associate Director
Age 26
Joined Jun-2002
 

Manish Sinha
VP – Projects
Age 35
Joined Dec-2005
 

Piyush Rathi
Business Director
Age 32
Joined Feb-2006
 

Richa Burman
Creative Director
Age 31
Joined Mar-1999
 

Sandeep Singh
Business Director
Age 26
Joined Jun-2005
 

Vijay Singh
Director Finance
Age 32
Joined Apr-2000
 

Congratulations to all of the above. Hopefully, this will trigger other people to come out with their success stories!

Innovations waiting in selling Insurance policies for Rural India!

My heart beats for Rural India. Venturewoods will have many posts from me in this regard. 

 

Till date most of the companies in India are always focused on urban market or at least they sell their products/services with the same models that of predominantly urban-market oriented. However, of the late, there is a significant shift due to the popularity of so called, “Bottom of the Pyramid” model.

One of the main vocal point of BoP model is that understand low-income people as your consumers and make your product affordable (cost or units) to the BoP market. Most of the companies, these days, have started to remodel their products/services according to this principle.

However, targeting BoP market means more than this. You need to make sure your offerings suit to the local needs. That is exactly missing in Insurance sector.

Nowadays, I have come across many insurance companies selling their policies as low as Rs. 10, Rs. 25 (much less than a US dollar). This is really a welcome step. And now coming to the other innovations part:

  1. Insurance policies should be completely flexible. Typically these are separately priced like health insurance, life insurance, vehicle insurance, farm insurance etc. I think, you should price them as a combination (as a flexible percentage and choice is given to the customer). Now let the customer choose the way he wants.
  2. Second comes from distribution aspect. Do not try to keep a separate chain of distribution. Utilize 1-2 millions telecom retail distribution chains. For the simple reason that these bring the structural efficiency in order to reduce the costs.
  3. Third comes from social angle. Most of the rural people live in joint families or at least they would love to consume services as a family. This is evident from their consumption patterns such as marriage/functions, pilgrim trips etc. So your service should consider this trick and offer them a group oriented policies. In fact, one may even consider community based policies. That would possibly become an instant hit.

In all of the above scenarios, recent advances in technology would play a great role. So insurance companies should start looking at the benefits that new tech developments could bring them.