Archive for September, 2010

1M/1M Strategy Roundtable: Do Not Spray And Pray

At today’s roundtable, we had three niche e-commerce entrepreneurs and two e-commerce infrastructure entrepreneurs. I will describe their businesses briefly, below. You can vote on which one you like most by clicking on our Facebook page. If you missed the session, please listen to the recording before voting. 

First up was Brad Barrett presenting GrillGrate, a grill accessory with which Brad has built a year-to-date revenue of $400k. We discussed how Brad might be able to do his first $1M year by leveraging the upcoming holiday season. What is working well for Brad is a combination of television infomercials and e-commerce. Brad has had some success in working with retailers as well, but I advised him to be careful about the cash flow management. To do a solid holiday season he will need to balance the inventory and marketing budgets, and getting stuck in a complex situation with inventory being stuff in the retail channels with bad terms will be a kiss of death. I will work with him on his inventory financing strategy. 

Then Jeanne Chinn with JCLABoutique.com presented an upcoming e-commerce company that is planning to sell $210 tote bags for carrying pets. Jeanne’s positioning needs a lot of work. Today she is operating at a 30,000 feet level, and I am concerned that unless she gets down to earth and develops more granular and specific strategies, she will not get anywhere. I asked her to work with the Clarify Your Story framework, something we ask people to use in preparing for the roundtable, but clearly, Jeanne did not do her homework. As a result, her pitch sounded like spray and pray to me. 

Next, Umakant Soni discussed Vimagino.com, a software for web-based Q&A support to engage customers better on sites that are trying to draw people in and convert them into customers. Now, the web self-service software market is very crowded with major players like RightNow already deeply entrenched. With enterprise customers, this would result in tremendous exit barriers, making sales cycles long and involved, which a small startup will find hard to withstand. For Vimagino, therefore, an OEM strategy is a far better starting point. I will connect the company to a few larger companies that may be good OEM channels for them. 

Then Dhana Cohen pitched TheNextBigZing.com where she has collected various merchants with video reviews of products. She wants to sell these products on her site. Her upcoming campaign of reaching out to 100,000 moms will be one of the first concerted efforts to actually test her business model. I would be curious to see what results this experiment produces. 

Last up was Indrajit Chowdhury discussing PowerStores.in an e-commerce storefront building software for the Indian market. Now, e-commerce has had extremely slow penetration in India, one of the key reasons being the lack of reliability of the delivery and logistics chain. Products get lost in the mail, and that, if you are selling expensive products, is a nightmare for merchants. Another issue is that India has had no catalog shopping industry, so the consumer psyche is not used to buying products that would be delivered later. Add to this the Not-Invented-Here (NIH) syndrome that most e-commerce companies in India have … will they buy Indrajit’s product? I advised Indrajit to find a small group of brick-and-mortar retailers in the Bombay-Pune region (because he is based on Goa, also on the West Coast of India) selling not-too-expensive products, and see if they want to go online. This may be the best place where Indrajit can start selling his product. Good news: Indrajit is a solo entrepreneur, so he doesn’t have a large overhead to support. 

I started doing my free Online Strategy Roundtables for entrepreneurs in the fall of 2008. These roundtables are the cornerstone programming of a global initiative that I have started called One Million by One Million (1M/1M). Its mission is to help a million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. In 1M/1M, I teach the EJ methodology, which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures. In addition, we are offering entrepreneurs access to investors and customers through our 1M/1M Incubation Radar series. You can pitch to be featured on my blog following these instructions. All three of today’s roundtable companies will soon be featured on Incubation Radar. 

The recording of this roundtable can be found here. Recordings of previous roundtables are all available here. You can register for the next roundtable here.

Roar of the Cloud

Among a close group of friends in the Paas, SaaS and IaaS sector in India and a few members from the VC community, we have been talking for sometime about the need to come together to discover and support innovators working on new SaaS products/services. The challenge really is to democratize development and support the MAKE, MARKET and MONETIZE phases, leaving the innovator free to do what he/she does best, unleash his mind.

So, my company One Billion Minds, WOLF Frameworks – India’s leading PaaS company, and Jamcracker decided to come together to start an ambitious Not for Profit program to do exactly this.

We have just launched – The Roar of the Cloud Challenge – to discover the best SaaS innovators in India and bring to them best in class application and venture development support as well as mentoring from the brightest leaders in Cloud Computing innovation.

Please let us know what you think about this Not for Profit initiative. We are looking for more partner companies as well as mentors to the innovators.

Of course, if you have a killer application in your mind, you may like to participate yourself at: http://bit.ly/aAZkGH

UnPluGGD Nomination – Call for Startups.

Ladies and Gentlemen, I am glad to share that Pluggd.in has announced the second edition of UnPluggd (Startup Event) in Bangalore on the 30th of October 2010. The first edition was phenomenally successful (do take a look at the videos) and the event is back with a big bang.

This time, the event will have two prime tracks -

1. Inspire : Bring in some of the most interesting entrepreneurs (people who have been-there-done-that-and-are-still-doing-it) and have them share their journey with the audience. This is inline with the core thought behind UnPluGGd and we will continue to bring in the most inspiring entrepreneurs to you.

2. Innovate : Showcase the most promising technology Startups from India: The nomination process for startups has already started! [form link].

If you think your startup is among the best in India today, go ahead and fill up the details here and we would make sure you are on stage – being evaluated by the best and being seen by the top investors and early adopter community in India.

This would also be an opportunity to be interacting with your peers and getting to showcase the product that has been keeping you up at night. We have something special planned for those of you who don’t get to be on stage – but more on that later.

Important Dates

- Last Date for nomination is September 30th.

- 1st October to 15th October – Once we receive your nomination, we will work with you in defining the pitch, understand more about your business and connect you to the appropriate panel.

For any queries, please get in touch [ashish@pluggd.in, pratyush@pluggd.in].

So go ahead and nominate your startup [form link] and be a part of the ‘Startup Oktoberfest’!Aside, this is also a request to share event details with fellow entrepreneurs who you think deserve to be at the event.

1M/1M Strategy Roundtable: 5 Cloud Computing Opportunities For Entrepreneurs

At today’s roundtable, I started with a presentation on Blue Sky opportunities in Cloud Computing based on our Thought Leaders In Cloud Computing (TLCC) research. I took the audience through five cloud-based business ideas, and discussed why they are relevant, and pointed them to the sources I derived those ideas from. 

For you, readers, here they are: 

1. Cloud-based collaboration among bio-medical researchers around large volumes of data:  

Dr. Marcos Athanasoulis, CTO of Harvard Medical School discussed this idea with me recently. There is a tremendous amount of data sitting at various pockets that bio-medical researchers are trying to collaborate around. The data needs modeling, processing, visualization, etc. – all activities in the domain of computer science, not bio-medical sciences. There is also need for researchers at various institutes to collaborate around this data and models, all problems that point towards a cloud based solution. An entrepreneur should pick this one up ASAP. From cancer research to genomics, wide arrays of research areas are looking forward to your innovation. 

2. Cloud-based legal records management, digitization, archival, retrieval  

Michael Aginsky, CTO of Gibbons P.C. pointed me to the vast masses of paper archives sitting at law firms, waiting to be digitized, and archived in meaningful ways along with efficient retrieval capabilities. Law firms are looking for cloud solutions that include security, disaster recovery, and other goodies. 

3. Charge-back accounting solution for large enterprises deploying cloud technologies 

Ric Telford, Vice President of Cloud Services, IBM pointed me to the rather significant move towards rolling out private clouds at large enterprises, a move that IBM is spearheading by providing full stacks of infrastructure technologies. Now, let us say you are an enterprise that has rolled out a rather extensive private cloud, and all your divisions and business units are using it freely. How do you keep track of who is using how much of the resources? How do you account for the charge backs to the business units or functional areas? This is an open opportunity for an entrepreneur to build a custom solution.  

4. Cloud-based flexible pricing solution for telecom vendors   

Jim Dunlap, CIO of Alaska Telecom discussed with me the increasingly serious problem that telecom vendors are facing due to bandwidth consumption skyrocketing. Today, the Telecom industry charges based on fixed price business models for data services. But to keep up with the rate at which bandwidth consumption is scaling, telecom vendors almost certainly will need to adopt a variable pricing model, such that they can charge based on consumption, just as they charge for voice services. The Utility industry charges based on how much energy or water is consumed, but the Telecom industry assumes unlimited data usage for a fixed fee. Jim’s interview with me (coming shortly) sheds light on why this will change, and how the infrastructure needs to adapt. 

5. Cloud integration services around specific vendors 

José Almandoz, CIO of Novell and several others have brought up how complex the integration issues are around the cloud. With 600-800 vendors with their own specific integration requirements, there is a plethora of opportunities to build integration services companies around specific vendors or specific domains. Appirio is one such company that jumped on this trend way back in 2007 and has now built a significant company in that space, and Sequoia has financed them. In fact, using their expertise, they have also successfully productized various connectors and adapters to build unique value. Anyway, those are just a few blue sky ideas for you to go after. There will be others as you dig deeper! 

As for today’s pitches, first up was Ambal Ramachandran with SurgeForth, a talent management SaaS company that we first saw last November. SurgeForth has since graduated to paying customers, and is making good progress. We discussed a variety of product strategy issues, including where to focus and how to avoid spray and pray. 

Then Zubair Ansari with CionSystems pitched a new IT provisioning and de-provisioning system that specifically aims to handle the exponentially enhanced complexity of cloud adoption. Cion has 18 customers and is considering funding. I pointed Zubair to a couple of case studies of bootstrapping using services to get more of his core product built, and in parallel, I will help him pursue institutional funding. 

Next, Rajeev Pareek discussed his Rural BPO idea. Rajeev wants to build a BPO firm in a place called Bolpur in West Bengal, India. Bolpur is home to the Viswabharati university, as well as several other small engineering and professional colleges. Rajeev came with a list of commodity services like transcription, digitization, etc. But as I found out that Rajeev is a computer engineer, I suggested to him to build a cost-effective SEO services firm, which would be more interesting. I have a variety of contacts for Rajiv to get his business off the ground. Bolpur Shantiniketan is close to my heart (we have a house there), and in my opinion is a splendid rural BPO location. 

Next week, we will delve once again into e-commerce businesses and explore how niche e-commerce is transitioning into Web 3.0.  

I started doing my free Online Strategy Roundtables for entrepreneurs in the fall of 2008. These roundtables are the cornerstone programming of a global initiative that I have started called One Million by One Million (1M/1M). Its mission is to help a million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. In 1M/1M, I teach the EJ methodology, which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures. In addition, we are offering entrepreneurs access to investors and customers through our 1M/1M Incubation Radar series. You can pitch to be featured on my blog following these instructions. All three of today’s roundtable companies will soon be featured on Incubation Radar. 

Recordings of previous roundtables are all available here. You can register for the next roundtable here.

Microfinance — about Social and Profit Agenda

There has been a swelling debate around the original intent of microfinance organizations centered around social good, and the recent “commercialization” of the model as evident in private fund raising, and promoters and PE funds making windfall gains in public markets.

The article here by Elisabeth Rhyne seems to advance a great argument for the golden mean. Let social and governmental efforts push the frontier and take risks that private capital will not take today (that is where the market failure exists) and let private capital deal with everything that is inside the frontier. Over time, for a sustainable structure to exist, more and more of the space should get folded within the frontier, and that would be a great development for the sector.

There has also been a perception amongst regulators and some microfinance players on the non-profit side that promoters and investors are making huge gains at the cost of poor people who are being charged exorbitant rates. The argument seems to be flawed on various counts.

First, worldwide data available on credible sources such as MIX market show that privately funded microfinance organizations are operationally more efficient compared to non-profit ones. This efficiency is being created by great management teams that are being attracted to the sector by a combination of social good and personal value creation potential. This efficiency creates value that gets shared between the poor customers (in form of lower interest rates) and the promoters/shareholders (in form of profitability).

Second, influx of private capital actually allows the sector to grow at a much faster pace than is possible otherwise. Hence more poor people get the benefit of such services.

Third, private equity is a very fragmented space, and genuine competition exists amongst PE firms. When some of the PE firms invested in this space years back, the risk perception of the sector was very high, and that risk has played out in the right direction. Because of that, the risk perception now is lowered, and capital is available at a lower cost (read, high valuations.) This capital formation allows newer MFIs to raise capital at much more attractive terms. In other words, it is erroneous to judge today’s returns against the risk perception today – it needs to be judged against the risk perception that existed when the money was invested. As a corollary, going forward, the relative returns on standard MFIs will be lower, because the risks are somewhat mitigated. In Rhyne’s words, the standard MFI play has been folded into the frontier, and the frontier is now pushing for newer markets and newer products.

Its ironical, but the greatest service that regulators can do to the sector, and to poor customers of MFI companies, is to provide regulatory clarity around the sector, so that risk perceptions reduce further, and poor people can realize the gains from availability of even cheaper capital.

Fifteen steps to an Innovation Economy

Developed by New York Academy of Sciences, The Yaroslavl Roadmap 10-15-20 describes the innovation policies, successes, and challenges of four countries—Israel, Finland, India, and the U.S.—and Taiwan Province, China. Based on analyses of how those regions developed innovation economies, and on a study of the current state of Russia’s economy compared to the priorities of President Medvedev, the report offers 15 specific recommendations. It also highlights 20 pitfalls for Russia to avoid.

The blueprint and learnings could equally be relevant to India. Even though India figures as one of the countries studied here, the gaps are very evident.

‘India taking leadership in the Cloud’ at the NASSCOM Product Conclave 2010, Bangalore, 10-11th November

Managing a product company is becoming increasingly complex in today’s shrinking world. Product Design and Ideation, Market Fit, Operations, Deliveries, Staffing, Marketing and so on. Where do you begin? And if you’re already in business, how do you scale up?

After a tremendously successful event last year, the next edition of the NASSCOM Product Conclave is here again on November 10 and 11 in Bangalore. Hear the experts, share your experiences, validate your ideas and bounce off your views, formally and informally.

Eminent speakers like Amitabh Srivatava (Microsoft), Mr. M.R Rangaswami(Sand Hill Group LLC), Polly Sumner (salesforce.com), Naeem Zafar(Concordia Ventures), Prof. Vivek Wadhwa, Sramana Mitra and Dr. Sridhar Vembu (Zoho Corp) a have already signed up to share insights and best practices. Parallel tracks and “unsessions” have been included to suit every requirement. Taking cognizance of feedback from last year’s sessions, the program is even sharper and focused and divided into an eclectic mix of business and technology which is targeted at a range of companies from start-ups to mature organizations. There’s something for everyone – CXO, marketing director, product manager, entrepreneur… Improved, Insightful and Intellectually Stimulating.

This event has carved a niche for itself as the only software product forum in South Asia with excellent opportunities to learn, share ideas and voice opinions.

Will you be there.?

NEN Program for Women Entrepreneurs

Here is an announcement from National Entrepreneurship Network. Please feel free to write to the below mentioned email

Are you a woman entrepreneur who dreams big or do you know of one?

If so, this is for you!

It is a known fact that most young companies die in the first 4-5 years of their life. This is also the time when startups begin to explore the opportunities for growth. The transition from startup to growth is a tough one and this is when most entrepreneurs have said they could use some focused help.

So here is an excellent opportunity for you to nominate yourself or a friend, relative or colleague to the NEN “Tools for Growth” program developed in partnership with London Business School, under the Goldman Sachs 10,000 Women Program. Eligibility criteria includes a current turnover of between 5 and 50 lakhs per annum.

This Workshop will help women entrepreneurs address key issues around growing their business. The entrepreneurs will be exposed to different tools and frameworks through case study discussions of real companies. Additionally, they will work with teams of 4 entrepreneurship faculty members from India’s top institutions to evaluate their company’s readiness and action plan for growth
For more information on the following, please visit NEN Resourcesand get in touch with richa@nenglobal.org