Archive for July, 2010

Join us to learn about the opportunities and success stories of Indian Digital Economy

More than 300 executives from start-ups, emerging companies and especially those developing mobile, internet applications will converge on New Delhi on the 25th of August for what is the definitive event for an IT start-up in India – the EMERGEOUT Conclave to understand “What it takes to build a successful mobile, internet company from India?”.

Learn from the industry thought leaders on new opportunities and interact with people who built and are building successful mobile, internet companies from India. Also many emerging company executives who attend to brainstorm their ideas, free wheeling discussions and networking all of which are especially pertinent for small to mid size companies trying to become game changers.

Technology, often disruptive in nature is at the heart of a start-up’s differentiators to make them game changers. No surprise then that EMERGEOUT has in the past been themed around Cloud Computing, and that the current theme is “The Mobile Internet & AppStore”.  This makes the event a must attend for the technology and business strategists.

Over the past four editions, the EMERGEOUT Conclave has become ‘the’ event on the calendar of a start-up CXO. Given the number of senior executives and CXOs the event attracts, in their wake come the Research Analysts, Bloggers and Media, who track and report on the sector.

Attending the Conclave gives a visitor a clear sense of where the action is in the emerging companies space and hear their stories, learn from companies building successful business cases. And in keeping with the ‘catch them young’ strategy, the Conclave brings in Investors looking for the next big idea and the next little company that will implement that game changing idea. Register now!

For Sponsors, its hard to find a more focused target audience. Nor a more responsive one…..the level of debate, interaction and buzz is not seen at too many other conferences!

EMERGEOUT has something for everyone — Now, you cant find an excuse for not attending. Join Us!

the First Startup Camp @HeadStart Ventures

I am happy to announce the first set of startup workshops from August 20th till the 29th in Bangalore. The agenda is here. The objective is to find startups the HeadStart Ventures team can work with from now on. These will also form the pool of companies the fund that we are setting up can potentially invest in. We will also actively promote qualified startups to our industry partners – eight of them will present opportunities, ideas and interest areas on the 20th and 21st.

All startups are welcome to apply but we will select 15-20 startups to attend the camp. Domains our team is strong in are – telecoms/mobility, semiconductors, consumer media, financial services, and healthcare. HeadStart Ventures is not a pure play mentoring organisation and neither it is a venture capital fund. It is a small group of people who will work hands on with startups and will seed invest in selected qualified startups. So, whoever submits proposals to work with us should be open to working with a bigger team of experienced people, be willing to start out small in terms of money and expectations but should not be limited by vision and ambition.

If you have any questions, do send an email to interest@headstart.org.in

Criticality of getting product roadmap right in early stage ventures

This is a cross post from my blog. Thought it might be relevant to share it in this forum. 

It is common knowledge that the success or failure for a new venture is primarily dependent on three factors – market, product and team. Entrepreneurs are traditionally good at identifying a market need and hence the two potential areas of fatal failure that one should watch out for are team and product.  In this post, I discuss the importance of getting the product roadmap right.  

Many of us would have heard of or had experience with ventures that collapsed because they ran out of funding before they could complete product development or released an over-complicated product that users could not understand or, released products that fell way short. The common underlying cause for failure might not always be the product itself, but rather the way it was rolled out and its inability to meet user expectations specifically at the time of its launch or release.

User expectations from a product are always dynamic and continuously changes with time.  In fact, one could draw a chart on how a user expectation varies with time. Initially, users (typically a small number) expect the product to address their core ‘pain points’ along with some ‘nice to have’ features, while taking into consideration any constraints that they might have. With time, expectation increases significantly (with more number of users) with need for more ‘nice to have’ features.  I call this the expanding ‘band of user expectations’.

To be successful, it is critical that the product roadmap be aligned with the band of user expectations (like Company B indicated by the green line). Deviating from it spells potential doom. In the example above, Company A attempts to deliver a complete product at a very early stage and ends up over engineering its product and potentially leaving its users confused. Considering that startups have limited resources, it unlikely that a company like this would have enough funds left in the bank to develop the next version. Company C on the other hand adopts a ‘throw it and see if it sticks’ approach and falls way short of user expectations. Both are not helpful scenarios.  

Companies that successfully align their product roadmap against the band of user expectations typically adopt a hypothesis-driven approach to product development. They test which features are desirable for their users, and aggressively seek feedback about their product and its features.  They also constantly iterate on development to ensure that their product fits well within the band of user expectations. Of course, there might be some companies like Apple that will exceptions to this kind of an approach, and are well capable of telling their users what they need. But 99.9% of the startups would be well advised to take structured approach to product roadmap.

I look forward to hearing your thoughts and experiences on this topic.

Its time to unveil the NASSCOM EMERGE 50 for 2010

NASSCOM EMERGE 50NASSCOM EMERGE 50 is back – and in a bigger avatar. After the success of last year’s listing, the EMERGE Forum within NASSCOM has begun work in full earnest for the 2010 listing. In addition to last year’s categories of Growth, Markets (non-traditional / domestic), Products, and Services, this year, the categories have been expanded to include the Start-Ups. And in another first, all the 50 companies will be profiled in a booklet to be released by NASSCOM at the EMERGEOUT conclave in New Delhi on August 25 2010.Why the EMERGE 50?

With EMERGE 50, we have a sharp focus – in the process we have been able to spotlight some really good companies, that were hitherto unnoticed. Plus with the level of detail that we go into with each company has helped us build an excellent dataset – covering funding, cash flows, employees, markets and specializations – for over 200 companies. This has really helped us get a sense of trends in this space.

It has indeed been a tough job for the jury members, the Zinnov team and NASSCOM for selecting the 50 emerging/start-up companies.

The Process that we followed

  • Companies were invited to nominate themselves in any of the categories.  We received 200 plus entries this year across  5 categories.
  • Applications were sorted out in different categories (i.e. Growth, Markets, Products, Services, & Start-ups)
  • Companies were evaluated on basic criterions such as revenue growth rates for last 3 years, revenue contribution, average revenue per employee etc. to arrive at the preliminary shortlist of companies in each category
    • Only relevant criterion were put for individual categories.
    • The shortlisted companies were then objectively evaluated (through a mathematical model) on a number of parameters including financials, growth, market differentiator, customers, market visibility, & distribution/ GTM
    • The evaluation on above parameters was used to come up with a net score for individual companies and hence the shortlist of top companies in each category

The EMERGE 50 listing has quickly built credibility as the definitive listing of companies to watch for. With the focus on segment-wide trends and analysis, the 2010 editions promises to be both information and insightful!

Here goes the NASSCOM EMERGE 50 for 2010(in alphabetical order)

Stay tuned for more updates about the companies and for the Top ten companies.

My experience of raising an Angel fund.

I am an entrepreneur working on my third product venture. I also helped bootstrap one of India’s largest entrepreneurial platforms. In the past 3+ years of interacting with hundreds of startups in India, I found that the three biggest gaps in the ecosystem are – 1. seed capital (anything between Rs 20 lakhs to Rs 2 crores), 2. well balanced teams (saw either too focus on tech or too much in-the-air business concept), 3. early customers (products are never really managed with customers in mind !).

So, as an entrepreneur again, I am in the process of bootstrapping India’s first angel fund. At HeadStart Ventures (not related to HeadStart Network Foundation btw), we are getting together a great team of people from a variety of operational backgrounds and domains to help build startups. We are also raising a seed fund where contributors are high networth individuals and the fund will target startups that could be pre-revenue and require seed capital, a great team to work with and access to early customers (often, industry partners HeadStart Ventures partners with).

It has been a completely new experience for me. For the first time, I am pitching to high net worth individuals from a wide range of business backgrounds. Pitching to corporates to work out processes to collaborate with startups. Hearing from VCs about what they think about small funds. Some of my findings are surprising, and I am not so sure about what to think of some others. So, I thought I will put them out here and listen to what you have to say.

1. finding Angels : I started out a list of around 25 people I want to go out to from across India. After a month and half, I and my partners have met 20 of them from Bangalore alone. I have not exhausted my list of 25 yet (wrote to only eight) and around 10 well established individuals wrote to me by themselves when they heard of our efforts. I am wondering – what was stopping anyone from organising this before ?

2. levels of Activity : Reason I felt that organising angels and pooling funds and managing them was important is because I felt that not all individuals in a network may have the time or confidence of managing investments. But everyone (except 1) we have met up want to be ‘active’, perhaps not as investment managers but active in the process of building startups. This must be good for startups ? for us as 3 people managing expectations ?

3. network or Organisation : because, money alone is not sufficient to make a startup succeed and mentoring and customers and lot many things are involved, I thought organising angels and pooling money into a ‘fund’ is better. That way, we can act when we want to and its not arbitrary and very individual angel dependent. But then, an angel told me the other day ‘an organized angel is an oxymoron, angels are supposed to be free wheeling, you know’ ! ‘free wheeling’, what does that mean ?

4. how much is Seed ? : we felt Rs 20 lakhs – Rs 2 crores. a large sum for family and friends, small for VC, yet sufficient run way to launch product and get first customers. Agree ?

5. annuity or capital Exit ? : I personally have always scoffed at investments that just focus on the India cost advantage and local factors. Bollywood movie review site, Process outsourced to Indian startup to count beans, etc. I do not think that is the way India will ever produce a Google or Microsoft. But with seed capital in hand, I know I can not wait out on a venture to make big forever. Should we think more about building startups to sell and exit ?

6.  users and Buyers : thanks to 10 years of struggling, selling and trying to sell products, when I see someone, all I can think of is ‘what do I sell him ?’. We are therefore putting a lot of focus on getting a network of corporates to partner us to identify ‘problem spaces to work on’, validate ideas and work in progress, and build traction early on in the product lifecycle. And then I think of Twitter and Zynga. Can a true user driven product come out of India, I wonder.

7. startup Quality and Focus : hope we will not get massively disappointed on this one. I have seen 45 proposals come through in the last 3 weeks. See 30% non tech as well. But I guess, seed stage investing is a lot less to do with what is there and a lot more to do with it ‘what can we do and how can we help with building it’. I wonder if most entrepreneurs are open to working together ?

8. expendable Idiots, us ? : when a startup we help seed and build goes for a bigger investment from a VC, we will be the first ones to be shown the door – whew ! at least, that is what one VC told us ‘we will take 70% of the company, give 30% to the founder because he has the ‘IP’ and throw you guys out’, ‘you are expendable, you know’, ‘you are part of the food chain (said menacingly)’- I am already shaken :)

9. is it Competition ? : ‘but you know, you are competition’, one VC told me. Hey, are these guys feeling uneasy or what ? (well, to be fair, many VCs have encouraged us too, its kind of 50/50 right now).

10. the easy VC life ? : I heard of a new term in my new avatar called ’2/20′, believe me, I got confused when I first heard it. 2 is the 2% asset management fee, and 20 is the carry. 2% of Rs 25 crores (our target size) is Rs 50 lakhs a year (to cover expenses and all). But then,  2% of the $100 million VC in India is $2 million a year – whoa ! what are all these guys spending the money on themselves for ? I am wondering, if you get paid so well to be a VC, why bother about finding startups to risk your life ?

We are still finding out new stuff every week, so will write more. But it will be great to hear from you folks about what you think of these.

The ‘Cost’ of Facebook Marketing (Wall Street Journal)

There are frequent debates in our workshops about whether the time and effort spent on building a Facebook marketing or brand experience is worth it. Is it really positive when it comes to return on investment?

Let me walk you through an interesting example of an ROI evaluation of an Indian brand’s community on Facebook. Ching’s Secret’s Facebook community has around 120,000 fans.

According to Ajaay Gupta, chairman and managing director of Capital Foods Ltd., the brand owner of Ching’s Secret, Smith and Jones and Raji brands, this is how he compares the ROI of its community on Facebook with the ROI of advertising in print:

1. A half page ad in a city tabloid (with a circulation of around 100,000 readers) costs around 200,000 rupees ($4,350). The “opportunity to see” as defined by the same tabloid is around 300,000 (100,000 multiplied by three, the average number of readers per household). In reality, only a fraction of readers actually see the advertisement.

2. The OTS of any message posted by an administrator of Ching’s Secret’s community on Facebook is 18,000,000 (120,000 multiplied by 150, an average number of connections on a Facebook user page). Surely, this number is theoretical and will never happen. However, to whatever fraction you may want to discount this number, the final number of people who will see the message will still be much larger than the reach of an advertisement in print.

But the real ROI of the Facebook community, based on the parameters below, is extremely positive when compared to other competing advertising media:

–Recurring Cost: To reach out to the same readers they reached earlier through print, they will need to pay for every new advertisement. In the case of Facebook, it doesn’t cost them any money for a new message.

–Engagement Level: The quality and quantity of engagement on Facebook far surpasses the potential engagement opportunity in print. According to the company, they can expect 0.5% to 1.5% of fans to engage with their message on Facebook. In the case of print, if they present an opportunity for readers to respond through an SMS, they can only expect 0.2% as the response rate.

–
Visibility: In the case of Facebook, they have complete visibility of their audience’s profiles while they get negligible visibility through print.

–Virality: Finally, the opportunity of their existing Facebook fans bringing new fans or influencing other people’s decisions toward their brand almost doesn’t exist in the case of print but is exponential on Facebook.

These are smart rules of thumb that can be applied to any business, small or large, while measuring or planning a Facebook presence in a marketing plan. I look forward to hearing about any arguments or models of evaluating Facebook effectiveness for business growth.

This article was originally published at WSJ.

The Guy who sold 2 Cos. to Flextronics

At Venture Intelligence, we recently did a podcast with K.V. Ramani, Founder of Future Software and Co-Founder of Hughes Software Systems – both of which were acquired by Flextronics in 2004. KVR’s story is a fascinating account of the tribulations and success of an early mover in the Indian software industry, who chose – in the mid-1980s – to tread a different path than the common “body shopping” route.

Some highlights from the podcast:

# KVR’s story emphasizes how the founding idea – especially for an IT product company – should be based on something that is likely to become popular 3-5 years ahead. He believes the founders should focus on the vision for the company in the next 5 and leave the job of managing the next few quarters to the operational managers.

# The podcast has an interesting account of how KVR converted the huge problem of its largest customer, Hughes (which accounted for 30% of the business), wanting to set up its own shop in India, into an opportunity.

# KVR also highlights how Flextronics acquired and stitched together what is today Aricent by acquiring 5 Indian communications software companies (including Future Software)

You can view more highlights and download the full podcast from http://www.entrevista.in

Startup talks from TED

Read write web has a good compilation of startup talks from TED – enjoy!

On the topic, who do you think are the best presenters in startup space in India – on the big stage, not workshops…

Startup Leadership Program – Inviting applications

We are bringing the startup leadership program to India, starting with delhi.

Admission Deadline – July 31, 2010

74 Fellows and counting…in Boston, Silicon Valley and now in Delhi. The Leadership Program is an initiative to groom startup CEOs in their mid-20s to 30s who have demonstrated outstanding potential and achievement, in life sciences, tech, cleantech and social sectors. Graduates will form an alumni network that will support each other’s entrepreneurial endeavors and have a significant impact on the global and regional economy in the years ahead. This program is going worldwide. Join us and help u grow. If you are interested, why not apply now? Early application is not necessary but can’t hurt! You can apply at the following link:

http://startupleadership.com/applyform.html

The Startup Leadership Program (SLP) is a not for profit 6-month fellowship. We train and mentor young professionals in their 20′s and 30′s to be leaders and entrepreneurs in the life science, tech, clean tech, and social enterprise sectors.

For more information on SLP, visit the SLP blog

To apply for the 2011 Delhi class of Startup Leadership, click here

Sincerely,
Organizing Team
Startup Leadership Program

A presentation outlining salient elements:

Tracking Your Company Facebook Page (Wall Street Journal)

In my previous posts on community building on Facebook, I mapped out a way to create a Facebook strategy and promote your company’s Facebook Page.

Monitoring it continuously and making sure it occupies the right position in the consumer’s mind, though, will require you to use the right analytics.

Your business objectives for launching a community on Facebook will define the metrics you use to measure and optimize the success of your community.

For example, if you are building a community to promote your brand, you may want to measure the number of relevant target users that are part of your community and the quality of interactions with those users.

Similarly, if your objective is to generate leads for your business, you may want to track the number of relevant queries you receive through your efforts to build a community on Facebook.

How will you know that you are on the right track?

“Unexplored India – A Treasure Hunt” is a travel community on Facebook that was launched in one of our workshops and stands out as a niche yet, strong example. Within the first three weeks of its launch, this community grew to over 2,000 fans with an exceptionally high degree of engagement (i.e. over 600 interactions per week).

Examining the data more, it also became clear that:

–With around 400 page views per day (out of which half were from unique visitors), this community had a high proportion of repeat visits –With over 250 photo views per day, it is evident that pictures of unique places are one of the most popular pieces of content offered –Also, with a gender ratio of 70:30 (male to female), it is clear that this community is currently used more by men

Practically, this gets translated into the following trends on Facebook Insights (a free metrics dashboard available to all Facebook users):

1. Fan Growth: The number of fans (as well as unsubscribed fans) on your page over a period of time. In the latest version of Facebook Insights, you can also see where fans came from.

2. Demographics: Given that Facebook is aware of the demographic details of its users, it provides highly relevant and useful demographic information comprising age, gender, location (country as well as city) and language.

3. Interaction: The extent of interaction is measured by page views, number of wall posts, likes and comments, which also tell you about the engagement pattern of your page. You can also get insights into what kind of content (text, photo, video etc.) is working or not working.

At a macro level, there are a few interesting tools which help you assess the value of your community on Facebook and allow you to do a thorough competitive analysis as well:

1. Facebook Grader: A tool designed by HubSpot to help you assess the ranking of your company’s Facebook page among other pages.

2. Social Page Evaluator: A tool designed by Vitrue to help marketers get a better understanding of a Facebook page’s ”value.” Although it is not a perfectly scientific tool, it can be used as a good indicator to compare two Facebook pages. Here is another study by Vitrue to help you gauge the dollar value of each fan on your company’s Facebook page.

To summarize the complete process of launching and nurturing a community on Facebook, let me give you a framework which you can use as a guide to connect all the pieces of community building covered in this article series.

I would like to end this series by encouraging you to continuously experiment and evolve your strategy as you move along in the community-building process on Facebook. I will be writing next on “Online Reputation Management.”

Do let me know the topics in digital marketing you would like me to write about.

This article was originally published at WSJ’s India Chief Mentor.