Archive for May, 2011

Pioneering Spirit – Call for entries

Canaan is pleased to partner with Lufthansa in this year’s edition of Pioneering Spirit. Apply now!

High-Octane Energy In Pune

On April 17, I was in Pune for a 1M/1M live event. Pune has become a hotbed of product entrepreneurship in India, and I was curious to see what kinds of ventures are cooking there. Well, Persistent Systems and IncuCapital hosted a highly interactive and engaging session. Here are the companies that pitched at the roundtable:

EzeeBank
First up, Manoj Dharap presented EzeeBank, a core banking solution for credit co-operative societies. Manoj has deep domain knowledge in the CCS market segment and has designed a solution that addresses the missing real-time data dashboard functionality of the industry. Today, the financial picture of a CCS is updated only once a month in a batch process.

Manoj is experiencing a long sales cycle of close to 12 months, but he has already created a sustainable company that has revenues and profits. He is exploring outside financing, but my concern is that unless the growth rate accelerates, this particular business may not fit the venture model. On the other hand, it can be a perfectly fine owner-owned-and-operated business.

Indian In A Box
Next, Ashish Sondhi pitched Indian In A Box, a retail concept for take-out Indian food. Ashish has three outlets in Pune, but wants to open one in London. Besides the fact that he is from London, I could not figure out why, instead of expanding the franchise in India, it makes sense to jump to London. The business is very different in London, and my feedback was that investors want a repeatable business model. Ashish wants to raise money and scale rapidly. For that to happen, he needs to show investors how his India model scales, without introducing a random London factor in the business.

Quadmo

Then, Rohit Rawal discussed Quadmo, an employee reward and recognition SaaS system for large enterprises. Rohit has already developed good validation in the Indian market, and is able to penetrate some sizeable accounts. In one of those accounts, Quadmo is integrating their software with SuccessFactors. Rohit is interested in exploring a U.S. go-to-market strategy, and I advised him to try to recruit a channel partner like SuccessFactor or Taleo with major presence in the talent management space. Since Rohit is a 1M/1M premium member, I will help him execute on this strategy. I also advised him to apply for the Microsoft Startup Challenge grant in the cloud category.

DIYComputerscience.com
We also had Parag Shah present DIYComputerscience.com, an intriguing concept for teaching foundational computer science through an online mechanism. In India, there is an abundance of programmers, but most of them lack a foundational computer science education. Parag’s pitch was somewhat all over the place, and he needs to focus on one market segment and a corresponding business model that can then be validated.

My hunch is that he should focus on the corporate training market, and train programmers for small and medium companies that lack in-house training departments. Most of the larger IT companies in India have some form of in-house training departments. But for the SME segment, this may be a value proposition that he can monetize. Two CEOs of product companies in the audience offered to validate this on the spot, and Parag had a rather productive afternoon from the look of it.

Wish Them Today
Last up was Pratik Rokade pitching Wish Them Today, a paid SMS birthday reminder service. While the service is useful, my impression is that it is very easy to copy and is likely to get subsumed into some other product’s feature. I advised Pratik to keep his job, and while it is OK for him to play with this idea, I would not jump into this particular opportunity with both feet.

Parag Shah’s DIYComputerscience.com was chosen the best business of those presented by audience members through a poll on the 1M/1M Facebook page. Congratulations!

Overall, the most promising company in this group is Quadmo, although I also liked EzeeBank and DIYComputerScience. The last of these needs a lot of work to extract and polish the diamond in the rough, but it may be a worthwhile endeavor.

Our next online roundtable will be held on June 2nd. Recordings of previous online roundtables are all available here. You can register for the upcoming roundtables here.

McKinsey report – Impact of Internet

McKinsey has come out with an interesting report on impact of internet on GDP of countries. As per this, Internet contributes to 3.4% of GDP in these countries, and 21% of GDP growth in mature countries. For India, the numbers are 3.2% and 5% respectively. Policy makers – get it right!

Canaan backed ABH acquired by Shire for $750M

Pleased to share the acquisition of Advanced Biohealing, a Canaan backed company, earlier this week. An extremely positive exit for the Company and for Canaan Partners, ABH’s largest shareholder. Congratulations to Kevin Rakin and the team!

More details here.

SeedFund Event @ Delhi : After Funding What: Building High Growth Startups

 After Funding What?Seedfund and TiE presents the secrets of fast-growth startups.How did CarWale vault to the no.1 position among car portals? Or Redbus do to grow to 10,000 tickets a day from just 10? What ‘s Edusports secret sauce in signing 100 school customers in 10 months? TiE invites you to ask founders.Seedfund comes to NCR. mash Murthy talks with Mohit Dubey, Phani Sharma and Saumil Majumdar.Venue : India Habitat CenterLimited Seats . Please register at seedfund.in/fastI also take this opportunity to announce launch of Seedfund office in New Delhi – NCR Region. With presence in Delhi / NCR, Seedfund will be looking at investment opportunities in North India region.

Introducing PowerPlug–The Monthly Contest For Indian Technology Entrepreneurs

I am super excited to introduce the PowerPlug contest, a unique contest targeted towards early stage startups in India.

With PowerPlug contest, we wanted to bring out (and recognize) amazing Indian technology startups on a continuous basis. That is, go deep inside the rice fields & animal sheds of the startup farms.

As part of The PowerPlug of the month, entrepreneurs will share their startup details with Pluggd.in team (application form) and Pi will select one entrepreneur every month as the contest winner. The winner gets a brand new Apple iPad2 and also gets an opportunity to meet Sequoia Capital team members (gets an opportunity to spend half-day with them and get feedback/mentorship on his/her business plan).

The contest was started in the month of March 2011 and here are the winners (so far):

- March Month: VisualWebsiteOptimizer: The NCR based startup has developed an A/B testing utility and has bagged prestigious clients like 4sq, Groupon as customers and surprisingly, it’s only a 3-member team.

- April Month: Onze: This Bangalore based startup has built a niche business in LBS space and bagged deals with retailers delivering a useful service to them.

For the month of May, we have introduced a concept of theme, i.e. startups who fall under the monthly theme can only be considered eligible for the monthly contest.

And May month theme is ‘Consumer Internet’ startups.

Last Date to Apply : May 22nd, 2011.

How Do I Apply? : Use this link to apply for PowerPlug Contest.

Apart from the tangible goodies, you also get the bragging rights (plus media interviews/coverage and of course, customer interest and investors calls !). So if you are a consumer Internet startup, this is your chance to be the PowerPlug of the month.

Any questions/clarifications, do let me know.

Quigley Report – Predicting a Venture Capital Revival

An interesting report predicting that venture capital asset class will make a strong revival over next 10 years. Key reasons: public markets are finally rewarding value like never before (interesting information on IPO valuations and multiples of some iconic tech companies), the demand-supply equation within venture asset class has swung to being favorable with only the strongest players surviving, discontinuities like internet and mobile have reached critical mass, and companies have a potential to go global sooner than ever.

Atish Babu Office Hours

Sorry for the short notice. Did not expect to have office hours this week, but had a few hours open tonight and decided to schedule it at the last moment. Let’s meet! Just posted new @Ohours for Sun, May 08 http://ohr.me/lDhZul

1M/1M Partners With Indian Angel Network

On April 16, I was in Mumbai doing a live 1M/1M event with TiE Mumbai and Indian Angel Network (IAN). While in Mumbai, I also finalized a deeper partnership with IAN, which I will discuss later in this post.

I presented my usual 1M/1M perspective on bootstrapping. After the event, I received an e-mail from Aneesh Khanna saying, “The Saturday Mumbai TiE session, was a very enriching experience. Even if there were fleeting thoughts of being bailed out by investors, they have now been banished and we are focusing on bootstrapping and making the model work with customer money.”

It’s rewarding to hear from people who attended the session and found immediate and actionable value.

The Mumbai roundtable was extremely interactive and fun. We did two sessions of five entrepreneurs each.

LocoBuzz
First up, Vishal Agarwal with Spatial Ideas presented LocoBuzz, a social media brand analytics platform coupled with location-specific insights. Vishal showed a terrific demo that was full of cool features but completely out of context. My key advice to him was to focus his pitch and demo on the brand analytics story, which has nothing to do with earthquakes and tsunamis – events he showed in the presentation, thoroughly confusing the audience and me before I was able to peel away the layers of the onion and determine what his real business was.

Food ka Mood
Next, Tanuj More pitched Food ka Mood, a waiters-on-wheels-type-concept for the Indian corporate market. Tanuj wants to offer sizable discounts to corporations for their employees to eat at various restaurants. Obvious questions about validation and core value proposition are still unanswered. My sense was that the discount could be interesting for HR organizations to offer to their employees as part of the benefits package, but this assumption needs validation.

TravDe.com
Then, Sameer Patil discussed TravDe.com, which offers steep discounts on hotels. Sameer wants to work with hotels and create special deals for his audience and wanted to know if the Indian online travel market has room for a deal site. Well, it seems to me that all online travel agencies do have deal sites, so to compete with that Sameer needs a specific strategy – perhaps exclusive discounts of some sort. I think TraveDe’s core value proposition has yet to be sorted out. The idea of exclusive deals appeals to me, but whether Sameer can get enough hotels to play ball with him and offer such discounts is something he has not yet confirmed.

Gomolo.in
We also had Pritam Roy present Gomolo.in, a social network and online hangout for movie lovers. Gomolo also has a good database of movies and related information that Pritam is trying to figure out how to create more traction for. I could not identify a good use case for the database utilization, but I learned that the company makes money by licensing content and providing mobile value-added service applications to carriers. This is good news: A revenue model is always good to have early on to sustain a venture, while the bigger scaling points are still being sorted out. I advised Pritam to focus on identifying the use cases that his audience of 250,000 is interested in to start building a product strategy that is likely to monetize – whether that is through mobile VAS apps or through advertising. It would also help figure out the audience engagement model of how to make the social network compelling.

Fragrochem

Last up during the first roundtable session was Chetan Thakkar pitching Fragrochem. Chetan has expertise in fragrance development and the company is in a turnaround situation. The discussion centered on where in the Indian market could Fragochem sell its fragrances with less competition, reasonably good margins, and adequate differentiation. I gave Chetan a framework for analysis, and if he comes back to me with the data framed accordingly, I can help him to answer the market penetration strategy questions.

Stopwaitin.com

After a coffee break, the second roundtable session began with Nimesh Khiara presenting Stopwaitin.com. Nimesh has pitched before, during the roundtable on March 10, 2011, and came back with additional competitive analysis on his OpenTable-like restaurant reservation system.

IRTEX

Ankur Tripathi then pitched IRTEX, the Indian Road Transportation EXchange, also a company that has pitched before during the roundtable on March 10, 2011. This is an excellent company, and although the business is extremely complex, it is solving a worthwhile problem. Ankur has a lot of issues with early adopters compared to late adopters, and I advised him to not waste time on those prospects that do not “get it” and are dragging their feet. Quoting Crossing the Chasm, I suggested Ankur and his team focus on identifying and recruiting early adopters. That’s the only way to build traction for now. We also discussed promotion and pricing strategy in some degree of detail.

Out Of The Box

Next Nimit Shah discussed Out Of The Box, a consulting firm offering brand strategy, design services, and interactive marketing services. The discussion centered on positioning and scalability and explored points such as strategic partnerships as a way to mitigate scalability challenges. Nimit has a difficult task ahead of him: Indian customers think consulting should be free. Convincing them to pay him for consulting will be an uphill battle.

StratExcel

Then Vishal Zinjuvadia presented StratExcel, a simulation technology for developing case studies. Vishal is looking at three different segments and use cases: management schools, corporate training, and recruitment evaluation. I went over all three use cases with him and suggested he pick one for his go-to-market strategy. My sense is that he should focus on corporate training because that’s where there is both budget and awareness about the case-based training method. Management schools have awareness, but not enough budget. And HR departments typically are not used to applying case-based methods in recruitment, so Vishal would need to do a lot of concept selling, which is unnecessary.

System-Sea

Our last presenter of the day was Ashwini Otta pitching System-Sea, a company with core competency in the shipping sector that is bootstrapping a product company using its services revenues. What I liked about this company were its deep domain knowledge and niche nature. The product is already validated at a very high-end price point, and Ashwini is planning to offer it at a substantially lower price.

Microsoft BizSpark India Startup Challenge grant applications will be open for all entrepreneurs to file. Please feel free to use the 1M/1M premium program to prepare for the grant.

We have also finalized a partnership with the Indian Angel Network whereby we will offer deep discounts to IAN-recommended companies to avail of the 1M/1M premium program. To apply, please contact Apoorv Sharma at IAN.

Pritam Roy’s Gomolo.in was chosen the best business of those presented by the audience through a poll on the 1M/1M Facebook page.

The next online roundtable is on May 12, 2011. Recordings of previous online roundtables are all available here. You can register for the upcoming roundtables here.