Archive for November, 2010

Different

I am currently reading “Different” by Youngme Moon ( HBS marketing faculty) which talks of “idea brands” among other things. This book coupled with Innovators Solution by Clayton Christensen are books that may inspire some of the people who will create billion dollar market cap companies in India from scratch.

For most entrepreneurs hitting a base hit ( say a 100 crore exit) makes much more sense then aiming for a home run ( 4500 crore) where most who try will fail.

When I relocated to India in 2004 I had thought that by now 5-10 large startups would be visible but I was wrong about that. I wonder whether the environment is now better and that by 2020 we will see $100 billion in market cap from companies that do not exist today.

I hope we will. To continue on a 8% + GDP growth path India needs innovation and entrepreneurship.

Deloitte Fast 50 India 2010

Congratulations to all the winners! (go to page 6)

1M/1M Strategy Roundtable: Not Coming To The Rescue Of Victory

During this week’s roundtable I addressed a commonly held critique of the 1M/1M program: that we’re focusing on the basics and stating the obvious. I have seen this criticism at various places where this recap is syndicated on a weekly basis, as well as in certain random forums on the internet. 

Well, I have coached early stage entrepreneurs for a couple of years now – diligently, patiently – and have learned a few things. First is that there are, perhaps, a thousand people in the world of entrepreneurship who know what they are doing when it comes to dealing with issues like financing, positioning, market sizing, customer validation, customer acquisition and other seemingly obvious topics that all entrepreneurs need to deal with. 

However, 1M/1M is a development economics project. We’re trying to bring the lessons we have learned in Silicon Valley to a million entrepreneurs. As you may know, 99% of the entrepreneurs who seek financing, get rejected. Please try to understand why. I happen to have a pretty significant understanding of the reasons behind this, and have created a curriculum within the 1M/1M premium lounge to address these commonly repeated mistakes. For a rather small $1,000 annual membership fee, we’re addressing the needs of a large pool of entrepreneurs trying to navigate the entrepreneurship waters, and mostly failing. 

Let me remind you again: 1M/1M aims to reduce infant entrepreneur mortality. 600,000 companies go out of business every year in the United States. Globally, this is a much larger number. We’re trying to make a dent on these staggering numbers. 

So, before you get on a high horse and start criticizing our work, please try to understand what we do.  

It is easy to come to the rescue of victory. The entire startup eco-system is interested in the 1% of entrepreneurs who are fundable, have already defined strong market opportunities, and are already well on their way. We are trying to reach the 99% that is not up to a certain level, and help them achieve success. 

Some critiques have said that we’re focusing on amateurs. Well, I was once an amateur. Mark Zuckerberg was once an amateur. So was Steve Jobs. All first time entrepreneurs, arguably, are amateurs. And in 1M/1M, we’re trying to short circuit their process of learning and maturing into successful, seasoned entrepreneurs by teaching them things that they need to know, and augmenting their rolodex (or lack thereof) by putting ours to work on their behalf to help recruit customers, channel partners, and investors.  

What we have taken on is hard enough. We can do without the armchair slander. 

So. On to the roundtable recap. 

First up today was Yogesh Sharma presenting Rangrut.com, a business that connects employers with learning institutions and on-campus students to fill job openings. He discussed his business model analysis and it was clear that he needs to move to a subscription-based model where the employers pay and the universities and students can come online for free. He also needs to create a pricing strategy that works by asking employers what they are willing to pay for the access he is offering. Since hiring relationships between branded employers and branded universities already exist, I believe the best opportunities are for Yogesh to connect brand name employers with  unbranded institutes, and unbranded employers with branded and unbranded institutes.  The crux of the discussion revolved around segmentation and business models. 

Yogesh already has 45 employers onboard, but while discussing his customer acquisition strategy it became clear that he needs to figure out some way to close sales by phone or online without personally traveling to close every sale. The first step is to develop some reference customers, something all early stage startups should do. Telesales simply don’t work without reference customers. But once a set of reference customers are in place, this business definitely needs a telesales channel, not a direct, feet-on-the-street sales force. 

Also, it is too soon to raise money, so Yogesh should continue to finance the business through consulting and executing on various customer hiring projects. To interest investors, the pricing model and customer acquisition strategy would need to be scalable. I cautioned Yogesh from believing that he has to raise money.  For now, he should stay focused on his customers and gradually growing the business organically. 

Next Pascal Nicolas presented SalesVu, a cloud based sales management tool for restaurants interested in tracking the value of their promotions.  With a growing variety of online coupons and social media promotions available, Pascal is looking to bridge the gap between the online world and the often dated marketing approaches of physical restaurants. His analytics product links back to online coupons used, for example, to help restaurants see what did or did not work and plan for future promotions. 

As for acquiring customers, so far he has used internet marketing and they have just started a partnership with a large reseller of restaurant management software, which is great. I believe he needs to find more partners to go to market through. Since they have already connected with OpenTable, I think they are a natural to explore a partnership with since their customer base is already so familiar with using technology to promote themselves.  Yelp, ChowHound, and even Zagat come to mind as other channels worth exploring.   

Another idea he has not yet tried is to use search engine marketing to make sure that when any restaurant goes online to look for the type of service he provides using popular key words, they find SalesVu. And by regularly adding to their online content, restaurants will also find them organically through SEO. 

It is clear to me, after doing these coaching sessions for over two years, that entrepreneurs need a lot more training on positioning and go-to-market. As such, I have created video lecture modules with case studies in the 1M/1M premium lounge on these topics with very specific guidance on what analysis to perform and how. The easiest way for me to teach a large number of entrepreneurs some of these basics is to have you spend 30-40 hours on the curriculum I have created, and THEN have you come work with me on refining your strategies and positioning. 

I have thought a lot about how to make entrepreneurship education and eco-system scalable and accessible to a vastly larger number of people. The answer to that question, I believe, is the 1M/1M Premium Lounge. Over the upcoming months, the program will become much, much richer. But for the moment, we can get you started and give you a significant jump-start.  

You can listen to the recording of today’s roundtable here. Recordings of previous roundtables are all available here. You can register for the next roundtable here.

Businessworld Young Entrepreneurs Awards 2011

Inviting applications for the Businessworld Young Entrepreneurs Awards 2011. The last date for applications is December 15, 2010.

Eligibility Criteria:

  • All founders must be under 35 years old as on December 31, 2010.
  • Companies must be at least 2 years old and less than 5 years old as on March 31, 2011. Five winners will be chosen and awarded after an evaluation by an independent jury.
  • Companies that are less than 2 years old may also apply to compete in a separate category. Three winners will be chosen and awarded. Companies must be registered entities.

Application form available here.

Thanks for your participation.

Mobile app distribution channels – Crosspost

Interesting post on mobile app distribution channels. Beginning to see more and more mobile app businesses in India as well,


Read here

1M/1M Strategy Roundtable: African Tech Entrepreneurs Emerging

I liked all of the companies that were presented at this week’s roundtable. And it was really cool to see a company from Tanzania. I LOVE the international nature of the 1M/1M initiative. 

First up today was Joshua Schwadron presenting Betterfly, a startup he founded earlier this year that aims to offer an easier way to find the best individuals (not companies) providing various services. By using social media to spread the word, this free site currently lists over 10,000 service providers, ranging from hairdressers to personal trainers to piano teachers.  

My first question was what categories is he focusing on as his market entry points. He told me music, yoga, weight loss and SAT prep since they have been the most popular so far.  The problem with this segmentation as a market entry strategy is that these categories are not synergistic.  He needs to target a customer who could use all of the related services offered. I asked Joshua to put the user at the center of his strategy, choose women or men of a certain age group who are tech savvy and then offer a few services that apply to them. Following along these lines, if you consider the four categories he mentioned, SAT prep definitely does not fit.  I recommend he pick one to three service areas that are synergistic to focus on as he goes to market.  Don’t spray and pray! 

Next Taha Jiwaji of Dar es Salaam, Tanzania, gave us an interesting snapshot of some opportunities opening up in Africa. He discussed Bongo Live!, an advertising and mobile services company that has subscribers and vendors as customers. Subscribers opt-in to receive advertising specials based on their interests, like coupons, special offers, etc.  He launched last week and through Google and Facebook advertising he has acquired 1,800 subscribers so far. Five bulk SMS vendors and two advertisers have signed on as vendors.  

His main question was should he focus more on acquiring subscribers or vendors. Taha needs to grow both bases, but subscribers a bit ahead of vendors.  A larger subscriber base is needed to get better vendors to sign up.  We discussed marketing, advertising and direct marketing agencies as being the best channel partners for him.   

Again, a bit of spray and pray is going on here as well.  Taha is focusing on too many categories for subscribers.  I recommend he picks three categories to focus on.  Since two of the vendors so far are mobile/computer electronics businesses, that is where he should focus to start.  

One very interesting point in the conversation was when Taha said he was surprised that job/career is the most popular category so far.  With no other job portal operating in Africa so far, I suggested that could be a separate venture for him to explore.  We discussed leveraging vendor relationships by, for example, offering to list the vendors’ job openings on his site. More to come from entrepreneurs in Africa I’m sure. 

Last up, Adarsh Jain pitched Fippy, a web-based interface offering consumers customized mobile phone numbers in India.  As presented, this is a classic nice to have, but not a must have business.  Initially I thought he was targeting young Indian consumers, but then he started discussing small business owners.  Again some spray and pray.  I told him he needs to pick one segment to go to market. Marketing to consumers is very different than marketing to SMEs. In fact, I think SMEs is a much stronger starting point. The customized phone number can be representative of the business and a small business owner has a commercial interest in paying for such a service as a way of marketing and branding their business.  The right direction is for Adarsh to capture the same concept as the 1-800 toll free phone number service in the U.S.  Businesses pay for these numbers so consumers can reach them easily, think 1-800- FLOWERS. This venture is much better as a B-to-B business than as a consumer business.  I suggest he offers a service, like SEO marketing, that is related to his venture to continue to bootstrap this business.  His homework is to research the 1-800 service in the U.S.

It is clear to me, after doing these coaching sessions for over two years, that entrepreneurs need a lot more training on positioning and go-to-market. As such, I have created video lecture modules with case studies in the 1M/1M premium lounge on these topics with very specific guidance on what analysis to perform and how. The easiest way for me to teach a large number of entrepreneurs some of these basics is to have you spend 30-40 hours on the curriculum I have created, and THEN have you come work with me on refining your strategies and positioning. 

I have thought a lot about how to make entrepreneurship education and eco-system scalable and accessible to a vastly larger number of people. The answer to that question, I believe, is the 1M/1M Premium Lounge. Over the upcoming months, the program will become much, much richer. But for the moment, we can get you started and give you a significant jump-start.  

You can listen to the recording of today’s roundtable here. Recordings of previous roundtables are all available here. You can register for the next roundtable here. 

1M/1M Strategy Roundtable: Premium Lounge Sneak Preview

At today’s roundtable I offered a sneak preview into the One Million by One Million Premium Lounge we have just unveiled to a small group of core users. To get started, I suggest you take a look at three videos messages: To Entrepreneurs, To Investors, and To The Media.  

The premium lounge includes an online curriculum addressing the common topics specific to very early stage entrepreneurship, private roundtables which many of you have requested, customer, channel partners, and investor introductions, media and analyst access, and a variety of other value added services to make our entrepreneurs successful. 

For the private lounge and the video lectures in the curriculum, we’re using a new online video conferencing technology called ViVu. ViVu is also a startup (funded by DFJ, and seed funds Inventus Capital, Quest Venture Partners, and Amidzad), and true to our philosophy, we’re using the 1M/1M program to give them visibility. It is very much my intention to provide similar visibility and customer access to a large number of startups through 1M/1M.  

Now, as for the presenters, first up today was Benson Hall with Advanced Dental Technologies, presenting a business plan to bring Cone Beam Dental Imaging machines to a large number of consumers. The machines are $250k each, and most dentists cannot afford them, and Benson wants to create Cone Beam imaging centers to be used by 20-30 dentists per community. 

Benson’s business needs $500k to get off the ground, buy a machine, and meet the operating expenses, and he primarily came to discuss his financing options.  

My assessment is that this is not a traditional venture financing type deal. The most likely people to finance a business like this would be an “eco-system” partner – someone who has an interest in seeing this business become successful. That would be the equipment manufacturers like 3M. 

Then Ajay Khater with LinearCube presented IntelliSuggest, a document management technology to help the process of searching, processing, and repurposing content particularly for lawyers, professional services firms who deal with a lot of contracts, and other such use cases.  

We had an extensive discussion on segmentation, TAM, competitive analysis, and go-to-market strategy, and I advised Ajay to do further analysis on specific topics. My main conclusion is that while I can sense that there is a business here, adequate analysis has not been done yet to draw conclusions on any of the key strategic directions: financing, positioning, or go-to-market. 

Raghava Kashyapa then discussed Qualitas Technologies, a system integration company in India focused on the industrial automation market. Qualitas is trying to close various gaps related to imaging in the industrial automation space, and has use cases in a variety of areas from bottling to labeling, and across verticals such as Automotive to Pharmaceuticals. 

Again, the right go-to-market strategy for this business is also to specifically focus on particular segments, particular use cases and define a go-to-market strategy accordingly.  

It is clear to me, after doing these coaching sessions for over two years, that entrepreneurs need a lot more training on positioning and go-to-market. As such, I have created video lecture modules with case studies in the 1M/1M premium lounge on these topics with very specific guidance on what analysis to perform and how. The easiest way for me to teach a large number of entrepreneurs some of these basics is to have you spend 30-40 hours on the curriculum I have created, and THEN have you come work with me on refining your strategies and positioning. 

I have thought a lot about how to make entrepreneurship education and eco-system scalable and accessible to a vastly larger number of people. The answer to that question, I believe, is the 1M/1M Premium Lounge. Over the upcoming months, the program will become much, much richer. But for the moment, we can get you started and give you a significant jump-start.  

You can listen to the recording of today’s roundtable here. Recordings of previous roundtables are all available here. You can register for the next roundtable here.