Archive for June, 2008

A good list of social entrepreneurship resources

To all who are interested in social entrepreneurship

A good list of social entrepreneurship resources
See their fellows (only US based), but for the ideas that can be implemented anywhere in the world if relevant at
->There are too many things possible in social entrepreneurship in India and worldwide.

Cash card transactions are much higher in India. Why?

This is my first post here. First of all, thanks for Alok for creating such a nice platform.

There are two types of e-commerce transactions on Internet. First, the consumer who makes the transaction on his behalf or family or for a friend and secondly an agent (ICT kiosks, Internet Cafes, etc) who completes the transaction on behalf of his customer.

Indian e-commerce industry minus IRCTC is almost like industry is still in infancy stage. So it is clear that insights from IRCTC would help us in understanding the e-commerce trends. Fortunately, every month, IRCTC publishes actual statistics on transactions with complete details on its website.

If you observe statistics of any month, at first you would wonder that cash card transactions are like one-third of total transactions (rest are credit or debit or netbanking). And in fact you find, cash card transactions growth rate is much higher than all other modes of payment. Then you would start feeling like, you have never heard of them anyone using it, but then how come such large number of transactions?

I used be working as IT Security consultant for payment card industry (now I work on rural services) and so I would like to you give you a detailed story behind this wonder. Business model of any cash-card company (ITZ Cash, Done Card, iCashcard) would give the reason behind it.

Platform: It is two sided. Cash-card companies just tie-up with numerous merchants/service providers (like telecom or ticketing etc). And later they start acquiring agents to use their technology platform. Typically these agents are: ICT Kiosks owners or Cyber cafes or computer education centers or the latest PCO/STD 2.0 etc.

Target Audience: Who all can’t goto a website and/or can’t pay through credit or debit card for remote payments. India has less than 50 million regular users of Internet and large number of people are outside of the formal banking channels. That gives you the reason for much higher number of transactions on cash-card mode. This indicates, those agents become the middlemen between the remote customer and the service provider.

Commission: Most times, cash-card companies get discount from the service providers (usually 3% to 5%), a portion of which would be passed to their agents (for example air ticketing works in this manner!). Otherwise, customer is charged (for example, IRCTC don’t give any commission to cash-card guys and so, agents would charge customers on top of the ticket cost).

Other revenues: Of course there could be a small percentage of direct consumers who would use the cash-card on web. But that is not what makes significant cash-flow for a cash-card company.

Future: So it is obvious that cash-card transactions would become much higher than credit or debit card transactions when cash card companies can acquire much more agents (in particular rural areas) along with more service providers (such as electricity/water distribution companies).


Now comes the biggest disclosure: In fact, strength of any payment card system lies with the following three points.

  1. They must tie up with as many merchants as possible.
  2. Technology/process that makes the consumer to use the card for payment.
  3. Card distribution should be efficient.

Now, how are the famous credit card companies (VISA or MasterCard) placed in the above points. Firstly, they are accepted with innumerous merchants. Secondly, consumer can use the card at merchant outlet or online or telephone or SMS or etc. Thirdly, Banks issue credit/debit cards to the consumers on behalf of VISA/Mastercard. Now coming to the costs of this ecosystem of digital payments is usually less than 5% of the value of the transactions (VISA, Banks, Merchants share this 5%). As the Mobile payments is getting matured, this value is getting closer to 3%.

Of course, companies involved in this payment ecosystem also have additional revenue through other value added services such as interest charged to the customer by providing them credit, etc.

Mobile Payments | RBI Guidelines

Today, RBI took another incremental step in defining Mobile Payments in India. The bank has published draft guidelines for Mobile Payments – “Mobile Payments in India – Operative Guidelines for Banks” . It’s encouraging that steps are taken in recognizing the industry and putting standards around it. However; it seems like a cautious approach. My observations:

RBI has defined Mobile Payments as
• Exchange of Information on mobile – Balance Enquiry, Statements etc
• Payments done involving mobile

RBI has acknowledged Banks as an important partner (since banks are liable for KYC norms) in offering mobile services and therefore, such services are restricted to KYC/AML compliant instruments – Bank Accounts, Credit/Debit Cards
Implications:This would bring services like eWallet / mWallet / Store value cards under RBI scanner and I see a regulatory risk in such businesses

The bank has recognized the long term goal of mobile payments to enable Peer to Peer (or Peer to Business) money transfer. However; RBI has also limited this scope to bank accounts.
Implications:Going back to my above point; I think businesses like Paypal might not pass regulatory hurdle in India. All operators & service providers have to partner with banks to enable payments involving mobile. I also don’t see any hope for relaxing this in future.

RBI has also raised the entry barriers for new entrants. Banks have to take board approval for offering such services to their customers. It would mean longer sales cycle – good for existing players but bad for new ones.

We have been following payment space from last some time and it looks interesting to us. I have also seen some case studies in geographies similar to India. In my opinion, two top most success factors in this industry would be:

• A strong use case to drive user adoption – In all success case studies, I have seen there is one use case which compels customer to try mobile payments. It can be mobile recharge, peer-to-peer money transfer, ticketing for mass transit system etc etc
• It would need active involvement of banks and mobile operators. While banks provide the backend payment infrastructure (& regulatory issues around payments); operators are best partners to acquire customers.

If you want to read technologies related to Mobile Payments in India, find them here

I would be happy to discuss and understand what new payment start ups are doing in Mobile Payments

Social Startup CEO opportunity – Delhi

Rahul has taken a project that I had done as a fellow at Stanford and scaled it. He has just got a grant from Ford Foundation for $250,000 and is looking for a CEO as described here.

If you know anyone who may fit the bill please ask them to contact Rahul directly.

At some point maybe VW can have a separate Venture Talent and Venture Jobs tab for social entrepreneurs. This would be useful only if there are no other blogs in India which already address this.

Tech company social network- is a social network for technology startup companies which
gives entrepreneurs a platform to connect with Investors, Acquirers
and Media. gives Investors useful tools to keep track of companies and industries that interest them, and provides a revolutionary interaction platform to discover the best investment opportunities in technology.

A Funded Startup: An Alienated Brother?

I have seen this cycle happen over and over again. There would be a set of guys who’d be around in most barcamps and social circles and someday they’d decide to start a company, and eventually build a product that’d gain quite a bit of traction from the “first adopters” that you find in barcamps, MoMos etc and then the worst thing happens – they get funded.

I have stats that show that more than 80% of companies whose growth and traction flatten out after getting funded by a VC firm. I’m asking myself the question if the founders were such shrewed and capable executioners that they planned the entire stunt just so that the popularity lasts till they get funded – but I doubt thats the case. So what then?

I came across a note where someone mentioned that people who get funded barely go back to the social circles after that. Partly cause those circles disown them because of whatever has happened to them. VC funding is not the golden egg, its more of the long-term, high interest, loan that is given to a company hoping that it would make it big, but for most folks getting funded is the end goal and such folks starts treating companies that have gotten funding as if they are Cinderella’s step sisters. The welcome is not there anymore, and there is no reason for these founders to go back to those circles anymore. They retire to the boring life of going out to meet peeps in baristas and coffee days where more pleasantries are exchanged than the actual meaning or weight of words.

This is actually very bad news. For the funded startup its very much so cause these early adopters essentially have dropped a baby on its head, just when someone agreed that it had potential. For the rest of the community, its also very bad since its a loss of a resource who probably had figured out how things work here and most certainly had knowledge worth sharing.

If you think I am just randomly spewing out stuff, I’ll make the entire point with one reference. J’lo’s single titled “I’m still Jenny from the Block”. That pretty much drives the point across. When your folks on the block are essentially who your early adopters are, and they disown you, it becomes radically hard for your company to survive without burning hard cold cash to see if someone would take you in for some cash in return. In the language of the hood, there is no love from the brothers no more.

I for one think that VC firms should stop advertising the amount they invested. Startups that get funded should make this a mandatory point with their investors. I know quite a few firms, like Ixigo for example who have gotten funding, yet not knowing the amount keeps things quiet, calm and life still goes on. Take any company that you know of [ and probably hate ], saying millions have been funded and crazy things like that and all of a sudden I am wondering if someone “deserves” that sorta valuation. Everybody thinks or says it out loud that its unfair and a lot of enmity grows in this little pool for absolutely no reason whatsoever.

Some companies would claim that announcing the investment amount adds credibility that will get you clients. Who are we really kidding? When you are small you need to embrace your brotherhood close to your heart and they will be your first set of customers whether you like it or not. An enterprise is a hard sell and probably is only worth aiming at when you are looking at your second round. If it happens, I’d be extremely happy but do be prepared to know and realize that your first set of customers are all folks you know, startups and SMEs. By the second round, you’d have grown to a much different positioning and would also have the strength to stand on your feet that you’d survive, and also would have weaned off the support system by then.

Until then, make no mistake, you need your community and the community needs you. Some things being in secret will make that happen.

Note: The media loves to flaunt numbers. So if you are not going to disclose numbers, don’t be surprised if they don’t run your story. Its okay, they too need to evolve, understand and adapt.

A Repost from the Author’s Personal Blog, The Startup Guy.

TiE Canaan Entrepreneurial Challenge – Final Nominations

Hi All,

It’s my pleasure to introduce this community to final eight entries of TiE Canaan Entrepreneurial Challenge 2008

Name Category Internet - Financial Services
Good Morning Research KPO - Financial Services
Druvaa Software Software
Ginni Systems Limited Software
iKen Solutions Pvt Ltd Software
Infogile Technologies Mobile
Rx Healthcaremagic Pvt. Ltd Internet - HealthCare
Micro Finance India Private Limited Financial Inclusion - MicroFinance

We received around 140 plans.


OWASP AppSec India Conference 2008

As you might be aware, OWASP (The Open Web Application Security Project) is a globally recognized leading body for Web Application Security standards, Frameworks, Tools and Guides, with its mission of “finding and fighting the cause of insecure software.

The Open Web Application Security Project (OWASP) is a worldwide free and open community focused on improving the security of application software. Our mission is to make application security “visible,” so that people and organizations can make informed decisions about application security risks. Everyone is free to participate in OWASP and all of our materials are available under an open source license. The OWASP Foundation is a 501c3 not-for-profit charitable organization that ensures the ongoing availability and support for the work.

OWASP Delhi Chapter is hosting a grand application security event in New Delhi i.e. OWASP AppSec India Conference 2008 on August 20th & 21st 2008 at the Hotel Intercontinental EROS, Nehru Place, New Delhi INDIA. This is a two day event with first day being the conference on “Application Security Trends and Challenges” and Second day dedicated to six sessions of Multi-track training /workshops covering today’s hot Application Security topics. We have a great line up of world renowned Application Security experts and Gurus, who have spoken & presented at world’s biggest and prestigious Information Security Conferences including BlackHat, BlueHat, RSA WorldCon, DefCON, OSCON, ISACA, MISTI, EUSec, AusCERT, ISC2 Secure World and HackInTheBox etc.

By making your team attend this event can add immediate value to your organization in terms of People, Processes and Technology. The OWASP AppSec India Conference 2008 is the first ever event focusing on Application security Trends and challenges and is the right place to learn the best practices in Application security from the Industry experts and gurus in this space.

On the other hand, sponsoring this event proudly showcases your commitment towards information security. It enables your clients to uniquely identify you as a Security savvy organization that is focused on delivering trustworthy computing in a tangible manner providing measurable benefits.

There is an exclusive CxO Power summit event (invitation only event) on the eve of first conference day and as a sponsor you benefit to interact with your C-Level Colleagues & other VIP delegates from Corporate & Government sector that can help build valuable business relationships.

Below are few quick links for your reference:

OWASP Delhi     Event Brochure      Conference (Day 1) Details      Training (Day 2) Details      Sponsorship Form       Event Page

Neeru Khosla On Education and Doing a Startup

Neeru Khosla ‘s name might ring a bell for some people. She is married to the legendary venture capitalist Vinod Khosla. In all these years Neeru has remained firmly under the radar and took care of her family. But for the past couple of years Neeru has been diligently working away on a non-profit organization that runs more like a startup called CK-12. The organization is focussed on creating flexbooks or customized content in math and science for US highschool teachers and students. All you need is access to the Internet and a printer and anybody around the world can create and print these flexbooks. Neeru and her co-founder Murugan Pal have ambitious plans and are also working on creating a social networking site for teachers and students. CK-12’s offering will be unveiled later this year in August.

I met Neeru a couple of times this past month in her Palo Alto office to find out more about CK-12 and what prompted her to do this non-profit organization and what kind of help and feedback she got from her husband. Does Neeru have a better understanding of her husband’s work now that she is running a startup? How is she juggling home and her startup life? How is her husband pitching in to help her? You can listen to the interview where Neeru talks about CK-12, entrepreneurship and her husband.

Startup School 08 Videos

Startup School is an annual free conference for hackers interested in startups. This year notable speakers included Mike Arrington, Marc Andreessen, Jeff Bezos and Paul Graham. The website is

The videos are at