Archive for September, 2008

Entrepreneur Journeys (Volume One) Now on Amazon

Friends,

I have embarked on writing a book series to help you navigate your own personal entrepreneurial journeys by listening to entrepreneurs who have come before. Volume One of the series is now available on Amazon.com. You can read more on the project here. Take a look, and I will be inviting some of you who are working in India to be part of the series, and impart your wisdom to a broader population of entrepreneurs.

Sincerely, Sramana

Software As A Service: Is India ready for it yet?

In the 80s & most of 90s, paying for software (at-least for personal use) was considered a waste of money, at-least in India. Now with most people being able to afford to pay for software as the prices have also become more reasonable, I have heard people buying licensed software more than what they used to earlier.

With a lot of software companies offering bulk-usage licenses, for the corporates, the cost of software tends to get more reasonable. But even then I would say it makes sense to treat software as a service and expense it. Though my Office 97 license still works on the old Windows 2000 box that I have at home, I will not be able to open quite a few documents created with latest versions of Word. Would I have been wiser if I had bought Microsoft Office as a service in 1997? May be, provided Microsoft was selling it that way. That way I would have always been using the latest version though I would have paid for the service year on year.

A lot of hardware is also being offered as a service (HAAS model). I strongly believe that IT investments should be treated as an expense at-least by the non-IT companies. As IT by itself does not generate any business by itself and is just an enabler, why shouldn’t it be treated as an expense like marketing expense?

Coming to India as a market for software as a service, are we ready for it? I tend to believe we are. Most of the heavily used software tools are already available as open-source. But most of these tools by themselves cannot be used by corporates to run their businesses. We need someone to use these tools to build applications & sell them. Most of these applications are continuously evolving with their hardware footprints changing very quickly. As a user, I have no control over it, but the creator of the application will definitely have. In that case, why don’t we have the creator maintain the application as well? That is how SAAS was born.

In India we are used to renting an apartment, but not renting a car as it tends to get too expensive. But we do hire a taxi or hop on to a bus. We are also used to paying for electricity, water, broadband, browsing-in-a-internet-cafe, etc based on usage, then why not software? I am sure it suits most corporates as well. But the problem is very few people are selling software as a service in India. I guess that has to change first. I strongly believe that at-least here we can lead the world by adapting the SAAS model faster than the rest-of-the-world.

I would like to invite thoughts on this from the member of the venturewoods community.

On a side note, I am the Country Manager for Transera Communications (www.transerainc.com). We make on-demand software for call centers & offer it as a service (SAAS model) in the hosted model.

“The Best Years of Outsourcing Are Ahead of Us”

Despite the current challenges, the best years of outsourcing are ahead of us, according to speakers at “IT Services & BPO Connect ‘08”, a conference focused on the road ahead and investment opportunities in these sectors. The event was organized by my firm Venture Intelligence last month at Mumba. Here are a couple of extracts from the post event newsletter:

Srinath Batni, Executive Board Member at Infosys Technologies, was categorical in stating that the outsourcing industry had “a long way to go and there is still a lot of juice to be extracted”. The current challenges are not so much on the demand side, but on the supply side. “The fundamental drivers of outsourcing are not going to change overnight,” he averred. On the cost escalation front, Batni pointed how salary increases as a percentage of revenues for Indian companies have risen less than 5% over the last 10 years. Plus, wage costs in the client markets are also increasing and the number of students going in for technical education in those countries is decreasing. The differential is still attractive enough to drive outsourcing to destinations like India. On other parameters like quality and scalability too, the Indian outsourcing industry has built a strong foundation for itself. “Also, the requirement for customers to keep pace with technology – which is becoming more and more heterogeneous – for competitive advantage will continue. Customers will need technology-related support regardless of state of the economy.”

…Abhay Havaldar, Managing Director of Private Equity firm General Atlantic, emphasized the need for striking the right balance between scale and innovation. His firm was more interested in investing into companies that attacked the operating expenses of businesses rather than the SG&A budgets. The challenge for such vendors is that it requires customers to re-engineer their processes – kind of like changing the wheels while you are still moving.

Other speakers at the conference included Aparup Sengupta, CEO, Aegis BPO; Nitin Shah, CMD, Allied Digital; Subbu Subramaniam, Partner, Baring Private Equity; Partha De Sarkar, CEO, HTMT Global; Shailesh Shah, Chief Strategy Officer, Satyam; Ranjan Bandyopadhayay, Global Head of HR & Strategic Initiatives, TCS; Dev Raman, Principal, Tricolor India; Sunil Kolangara, Director-Private Equity, UTI Ventures and Ashutosh Vaidya, CEO, Wipro BPO.

Any VW members who would like a copy of the full post event newsletter, can email info@ventureintelligence.in.

A learning event for entrepreneurs

Jumpstart your Enterprise is going to be held on November 5, 2008 at the ISB Campus as a part of the TIE ISB Connect 08.

This is a serious day long learning session for “experienced professionals, starting entrepreneurs”. It is a day to step back and learn…an investment in your entrepreneurial career.

Click on this link to learn more…

See you in Hyderabad…

NASSCOM EmergeOut Conclave 2008

NASSCOM has extended discounted entry fee for the VentureWoods community for its upcoming NASSCOM EmergeOut Conclave 2008 scheduled for 29th Sep 2008.

Please find attached the registration form. Please email to avinash@nasscom.in for any clarifications.

Business Idea: Market Intelligence Firm

Introduction
Traditionally we know market research as a part of marketing effort that gathers data, validates assumptions or helps identify new opportunities. However most of the research problems are really reactive in nature. Someone realizes that they have a problem and research is one of the ways to start figuring out what to do with things. Basis this assumption, what if there is a market intelligence firm that works pro-actively and feeds companies and brands with dossiers that help in decision making.

Background/Idea
I was doing market rounds for one of my clients and I saw that Coke has a water brand called BonAqua apart from Kinley (that they recently relaunched). I also saw that Frito Lays has launched a brand called Desi Beats (under the parent brand Kurkure) – in direct competition to ITC’s Bingo. I thought what if I could collect all this information for a lot of brands and create market report to be used by businesses in helping them take decisions. It would be an extension of their strategy division.

Business Case
As a brand it is very difficult for me to keep track of things that are happening in the market. Most of the information is gathered through grapevines and unofficial contacts between companies. Most of this generally is noise. And thus, I would readily pay for a company that monitors the market on my behalf and gives me weekly or monthly dossiers on what is happening in the market. This could be information about competitors, imitators, new territories, customer feedback etc. Further, this is better than market research because I am not paying for data that is more often than not fudged and at the same time has lots of biases built it. In fact more and more clients I meet as part of my work for Creativeland Asia dont want to believe in traditional market research methodologies (they are more interested in things like observational techniques).

How would I do this?
Two steps really.

  • One: If I hire part-timers (or even volunteers) whose only job is to go and click pictures at retail shelves across the country (once a week), I can collect reams of data. And with advent of personal technology, its cheap and convenient to click pictures and send it to a centralized location. I can pay these guys on per picture basis. I can even ask these guys to click a certain kind of store.
  • Two: I can then have another team analyze this data for information and patterns. We can hire MBA from grade three business schools like Amity, ICFAI etc and pay them peanuts to do basic analysis. In case a client requires a detailed report, we can use experienced resource to work on there.

For example if suddenly all images from Delhi show that Red Bull is now visible at even the juice shops, that would mean that Red Bull is trying to revamp their distribution and has ambitious plans. A company like Coke or Pepsi should be scared and probably take lessons from Red Bull. This would also indicate that there is a demand for Red Bull in Delhi. Can Gatorade now be launched with more gusto?

Probable Roadblocks
Quite a few. Including things like <retailers not allowing you to click pictures>, <motivation and remuneration of volunteers>, <team of analysts>, <no competitive advantage> etc. etc. Need to think lot more on this. I would appreciate feedback from readers on this.

Wondering what the learned community on Venturewoods thinks about the idea and what are the few major objections that one can think of. I would really appreciate if you guys here can help me see what I am missing.

Thanks for patient read,
Saurabh Garg
(Originally posted on The New New Thing and modified for Venturewoods)

Dare Interview – Recapping Canaan in India

Krishna has done a good interview to recap how Canaan is looking at India, over two years after we entered the market. I am not easily given to cross posting my own interview :) , but this one was successful in bringing out some new elements:

  • No change is good news – over past couple of years, we have been able to (mostly, successfully) validate our assumptions and thesis for the Indian market. This has allowed us to move forward rather than sideways
  • A lot of activity we see is behind strong but incremental growth (as against discontinuous growth), and execution is at a premium (for new as well as existing concepts)
  • Krishna has brought out the emphasis on momentum well – very useful for entrepreneurs, especially ones who complain “last time you told me you might be interested if I got a 100K users” – it depends on what the growth trajectories look like
  • Krishna also thought most VC firms dont like to talk about their investment areas and theses – while I dont fully agree with it, we did end up discussing why Canaan does talk about it

Hope you find this interesting, and would love to get your thoughts,

Ideas To Toss: Advertisement Networks for Mainstream Media.

Note: This post is a rehash of a post made on my Personal Blog, about how Yahoo should alter its strategy to focus on other streams of media for contextual advertising. Realized that there are lots of hidden opportunities for Startups as well within this space and here it goes…

A friend of mine and I, over some conversations were discussing about some of the bigger brands that we see around us and something along the topics of Return on Equity. Not sure if you are aware of, but Microsoft has a 52% return on equity. Yahoo has roughly about 7% and falling drastically and Google has one which stands at around 26% – and growing steadily. Whatever you may say, Microsoft has played this game with a whole new set of balls and one most people simply won’t understand. And if you ask me, they are a much better company in terms of strategy and products compared to most other giants, anyday.

But that’s not the focus of this post.

The conversation was that, if a company has Advertisement as its core strength and has built a competence in it, then its going to be very hard for the company to drop that and adapt the advertising network of its partner/rival. Well, for the case of survival they might, but since they do have the core competence, the resources and the minds that can think in that direction, what could they possibly do, was the question.

I’d say, flip the coin, and lets look out to the horizon. Go after other streams, television and Radio… to be precise.

Continue reading ‘Ideas To Toss: Advertisement Networks for Mainstream Media.’

Imbuing the Public Service with Entrepreneurialism

Cross-posted from The Subaltern Studies (An interdisciplinary studies in media and communications). Pardon me if it sounds a little off-topic. I was just keen to explore the commercial realm of public policy, civil administration, professional advocacy and political lobbying in India.

A recent spat between the Prime Minister’s Office (PMO) and Union Public Service Commission (UPSC) couldn’t have happened at a better time (Ref 1). Leaving aside the usual fact that the event was grossly underreported, I think it aptly highlights a peculiar systemic anomaly in the underlying structure of our Public Service. Possessing decent-enough knowledge so as to play the part of a concerned citizen, I feel that the realm and scope of public policy and administration in India suffers from a great schism which makes it very unmeritocratic. Nonetheless, with all the rapid development, burgeoning economy, rising and vocal bourgeoisie, more accountability, savvy politicians and independent media, there’s great commercial potential for public policy, civil administration, professional advocacy and political lobbying in India.

Unlike the US, which provides enough freedom and scope to their citizens to pursue public service as a career at any stage of their lives, irrespective of their professional background, the public services in India are under the total hegemony of babus who are completely cut-off from the ever-changing aspirations and priorities of the nation, adhere to a monstrosity of outdated bureaucratic protocols decayed by redtapism, and are forcibly desensitized from possessing any partisaned ideology. While the former system may lead to blatant favoritism and (what Jon Stewart has termed as) ‘partisan hackery’, the lndian counterpart hasn’t proved any better. With the constant shuffling and transfers, the babus fail to acquire the depth and specialized expertise required to take-on one problem at a time and fix it – due exception to a couple of areas like economy and finance. Moreover, entering the Indian Civil Service is a one-time decision in the life of a public servant. If you feel like giving your dues to the nation once you have acquired success or fulfilled your liabilities, without venturing into the dirty game of electoral politics, then the best thing you can do is watch patriotic movies or argue your ass off in ‘The Big Fight’. Moreover, it is difficult to make predictions on the future potential of a person and his ability to understand the problems of a nation fifteen years down the line, with a slew of competitive exams taken in his 20s, which are solely aimed to test his theoretical knowledge. I know many people with an intense nationalistic fervor who have an instinctive aversion to herd-like competition but have great empathy for people and highly developed social skills.

Oh Freddled Gruntbuggly...

“Oh Freddled Gruntbuggly…”

Having a great deal of interest in American neoconservatism, I have realized an amazing synergy between academic institutions, think tanks, media, political parties and public service institutions in this realm. Not only does the academic and research backing helps the political parties in closely following the pulse of the nation, but this partnership also yields fresh talent with cutting-edge ideas ready to be inducted in various public service institutions solely based on merit. And what’s so blasphemous about public servants having a political ideology? I think passionate idealism can give that much-required emotional impetus for just and righteous actions. I find it funny that we cry out loud every time an IAS officer is accused of being partial to a party or a leader. I mean, isn’t this like the unwritten rule; don’t we see a major administrative shuffle after every regime change? Then why not make it acceptable with certain rigid impositions so that they don’t cross the line. Reminds me what the professor of political science at Columbia University, Dr. Philip Oldenburg had to say (roughly) – India is a nation of mind-bogglingly diverse (and perverse) political ideologies, whose politicians can go to any lengths and are very enterprising as compared to their American counterparts.

Let’s focus on what’s needed to be done. America houses the finest academic programs for public policy and political science, concentrating a lot on practical exposure and active involvement in public-political domains. These institutions have frequently shaped and changed the direction of national debates and public priorities. Colleges like the Harvard, Stanford, Yale, Princeton, Berkeley, Columbia, Georgetown, Tufts, MIT, Syracuse, Chicago, Michigan and Duke have produced some of the finest bureaucrats in the world. Compared to that, India is still lying in the cradle and playing with saliva bubbles. Only recently, IIM-B and IIM-A have realized the scope of public policy in India and have started postgraduate courses strictly limited to mid-career public servants and social workers (Ref 2, Ref 3). What about the rest of us? Institutions like ICFAI, MDI and TERI have also taken some initiatives; however, my interaction with the ex-students reveals that they have some crippling problems to overcome and also lack the extremely important political backing.

Coming down to the career scope, I think the possibilities are unlimited. Till now, the only places where public policy experts could get a job were academic institutions, NGOs or think tanks like the Centre for Policy Research (CPR). Your contribution towards nation building was limited to some obscure conferences, dull policy briefs which are rarely read, cautiously-provocative newspaper columns, TV interviews, and being a slavish member of governmental commissions and inquiries. Something like what Dr. Brahma Chellaney does, though he’s exceptionally daring and free-minded at that. With a gradual influx of young and savvy politicians, I think political campaigning in India will get very professional (witness some progress at democracyconnect.org). The populist media of India lauds itself for being innocently non-partisaned — load of bullshit. They still don’t have the candor and tenacity to be independent and impartial. Look at incidents like the ‘cash for votes’ scam where CNN-IBN pushed the envelope of mendacity by refusing to telecast the tapes. Or how the NDTV constantly flaunts its CPI backing. It’s high time that we move over from programs with a misdirected nationalistic fervor, like ‘We The People’ where Alyque Padamsee or Suhel Seth seem to have the ability to solve every problem of our country. Instead of cribbing about journalistic integrity all the time, we need to take a completely opposite approach. We need partisaned media outlets which have the freedom to pitch their political ideologies with respect. We need our very own, desi Rush Limbaughs. This will create a competitive but level playing field. The inability of the Indian government to regulate the Internet as of now, should be exploited to the fullest to create new portals and independent think tanks that can have great commercial viability too (desi Drudge Report, AEI, Brookings, Cato etc).

While visiting an online political forum to gather perspectives on the ‘cash for votes’ scandal, I was amazed at the sense of obviousness with which some American members reacted to the incident. Upon expressing my surprise, they shrugged how these are just the minor teething problems of a young democracy. American political parties, with almost three centuries of experience to their credit, have legalized the system of ‘donation for favors’ by setting up a complex and an almost untraceable network of lobbying groups which tweak the system. India needs to learn from that and clean up their act, they said. Minus all the ills, I think this is bound to happen sooner or later, which means all those vacant seats of highly paid policy gurus and campaign managers are up for the taking. Lastly, the powerful Indian middle-class will be very receptive about the electoral candidates with such professional experience and depth in public administration.  Go, build a nation!

Looking for “fundable(?) tech startup ideas”?

Looking for “fundable(?) tech startup ideas”?

Ycombinator lists 30.

http://ycombinator.com/ideas.html

Which one you want to take?