Archive for June, 2011

Business coaching for entrepreneurs

I recently left the venture capital world to set up a business coaching practice and wrote the following piece for a venture capital related publication. Pasting it below, and would love to get the forum’s thoughts on how they perceive the value of coaching.

From Venture Capitalist to Business Coach

After several years of working with entrepreneurs across India and South East Asia, I finally decided to become one.  As a venture capitalist I was in the privileged position of having smart, passionate and highly driven entrepreneurs approach me with their business plans and try to sell me on their ideas.  I heard their stories, tried to grasp their vision, second-guessed their business models, poked holes in their assumptions, played devil’s advocate and generally made myself a royal pain to many of them. Once we’d invested in a company, I cheered the entrepreneur through the successes, commiserated on the occasional failures, brainstormed, pushed, prodded and sometimes even goaded him/her into action.  We didn’t always see eye to eye, but we learned to disagree. All in all, a truly exhilarating experience, and the opportunity to work with committed individuals driven to build large businesses in an era that will surely go down as one of the largest wealth creation opportunities the world has seen, was definitely once in a lifetime.

So why move to the other side of the table? First, the desire to get my own hands dirty building something rather than living vicariously was too strong to ignore. Second, I saw a real need for business coaching for entrepreneurs.  I believe 70% of the outcome of any business venture is attributable to people, 20% to external factors such as market environment and 10% to dumb luck. Time and again I’ve observed that the degree to which a founder is self-aware and willing to stretch himself and evolve can make all the difference between success and failure. This is especially relevant in Asia, where most business founders are first-time entrepreneurs and may not be sufficiently battle-hardened by past experiences. Moreover, unlike the Valley where professional CEO’s are often brought in once the business has hit a certain phase of maturity and raised venture funding, in Asia, founders usually continue to run the business.

Being an entrepreneur is a lonely job, venture-funded company or not, and the pressures of the business and meeting the expectations of various stakeholders leaves little time for reflection or personal development and often leads to a situation where the business has grown but the entrepreneur is playing catch-up. If the company has investors, they often add significant value in and outside of the boardroom but these discussions tend to be focused more on the business and less on personal effectiveness. Moreover, investors usually have limited time to spend on any one portfolio company. Mentors are a great source of advice, but typically offer solutions based on their own expertise and experiences and may not question or challenge the entrepreneur to change his/her thinking and behaviour.

This is where Business Coaching can help. Coaching is a process of collaborative inquiry, relying on the use on well-crafted questions, rather than continually sharing the answer, to get people to sharpen their own problem solving skills. In coaching, the relationship is objective, and the focus is not only on what the person needs to do to become more successful but also who the person is and how he thinks. By partnering with a coach, an entrepreneur can achieve the kind of personal and professional transformation that positively impacts the business. Agendas can vary and include anything from learning how to delegate, motivating others and improving communication skills to improved prioritization and work-life balance.

When I announced my plans to set up a coaching practice a fellow investor remarked to me, “seems like you only want to do the fun part of a VC’s job”. I couldn’t have put it better.  Impacting people was the most fulfilling aspect of my job as an investor and as I embark on my own entrepreneurial journey – incidentally a very difficult-to-scale business that no VC should fund! – I look forward to re-engaging with entrepreneurs and the start-up ecosystem in a new role as a coach.

CC is Evil

Well not all, but some of it definitely is. To know why we say that, lets dig into why we CC people on emails in the first place:

 

1) The “You must know this CC” – There is nothing wrong with this one. Example: I direct a question to someone in the To list, and put some people who can answer the question for find the answers immediately helpful in CC. This is done mostly when the people in CC might be able to add to what is being discussed, or might derive immediate benefit from what is being discussed.

 

2) The “I just want to cover my back CC” – This is where it starts to get shady.  Example: The support team CCing their Head on every support email they respond to. The Head would probably not look at all the emails unless there is an exception and her attention is required. The people who are receiving the mail because they were in the CC list have nothing to add to the discussion, nor do they derive any direct immediate benefit out of being a part of the discussion.

 

3) The “You should probably know we talked about this CC” – This is the most evil of all CCs.  Example: In a team of 50 people, every member writing to everyone about what they are working on. People do this because, for good reasons or bad, they want everyone to be on the loop about whats going on. When its a 50 people team, it generates very serious clutter. If you open your work inbox in the morning and go through 50% of the email leaving them unread, you know what we’re talking about here.

 

CC, and its first cousin mailing lists are the prime culprits for a lot of the email clutter and overload we face today. But at the same time, there are reasons why they continue to exist and be heavily used and abused. We need to figure this out and find a solution to this. This would make a lot of people happy about the time the spend with their inbox.

 

 

Note: This is reposted from the GrexIt Blog.

Call For Tech Startups To Demo @UnPluggd Event [Application Deadline:June 26th]

Grab an opportunity to demo your product at UnPluggd, India’s largest startup event that brings together amazing entrepreneurs, active angel investors and a bunch of ‘unpluggd’ stories (of failure, rejection and success!). 

The event is scheduled for July 9th (Bangalore/details here) and last date to apply for the demo slot is June 26th (link to the application form).

- Once we receive your application, the panel (includes VCs/angel investors) will select the 10 most promising startups (we will share updates by June 30th).

- For those who want to attend the event, you need to block your seat asap {link}

    
——————————
Why Demo @UnPluggd?

Startups who demoed at the last event (in the last edition, 10 were selected from 250 nominations received) received great feedback/interest from angel investors/VCs/entrepreneurial community and the event helped them in refining the pitch.

Below are a few testimonials from companies who demoed their product at the last event:

“Looking back presenting at Unpluggd added credibility to our venture. We also got to meet investors both at the event and afterwards. The last mail I got was last week, well after 7 months of the event. As a bonus it did help us refine our pitch to the external world. For getting the word out about your venture, this is one of the best places to be.- Sunil Guttula, Founder of Bizosys (demoed @UnPluggd)

——————

Startups need to be in touch with customers very early on. Startups need a lot of marketing going right for them – from the very start. Unpluggd is a forum that gives both to startups – for free. We met several of our users and customers there. We also met many other angels and investors – with whom we’ve had continuous engagement since. – Bharat Mohan, Founder of Dhiti (demoed@UnPluggd2).

——————

Run by a passionate team, Unpluggd places the startup in the centre of things, and steers clear of the “formula” platitudes, felicitations and speeches that derail many events in India. – Lux (demoed @UnPluggd2).
——————
More here: http://www.pluggd.in/unpluggd

Indian Entrepreneur Mindset

Indian entrepreneurs typically think innovation means invention or product innovation… But, to be a successful grocery store owner also, you need to innovate enough…
thanks
Pradyot
http://www.crunchbase.com/person/pradyot-sahu
Innovation Engineering
http://www.facebook.com/innoengineering
Innovation Engineering Forum
http://www.linkedin.com/groups?mostPopular=&gid=3759712

Exciting Companies Lined Up For Microsoft Startup Grant Finals

During today’s roundtable, we had four Microsoft BizSpark Startup India Challenge grant finalists present. Two of them, Freshdesk and Bizosys (10Screens), are 1M/1M premium members, and we have already been working on their strategies for a few weeks.

Freshdesk
First, Girish Mathrubootham from Chennai, India, pitched Freshdesk, a SaaS company that provides small and medium businesses with on-demand customer support software that offers multi-channel social support. Freshdesk introduces itself as a kind of Salesforce.com for customer support so to speak. Small and medium size business owners can set up online customer support platforms that combine the backend help desk system used by agents (ticketing, knowledge management) with an online customer portal (self service, forums, idea management, voting, etc) on the front end.

What I find exciting about Freshdesk is that they may be able to do the same thing in customer support that Zoho did in CRM: a drastic downshifting of the price-point of a full-functionality, differentiated, cutting edge customer support solution. For the uninitiated, Zoho introduced a CRM system that was one-tenth the price of Salesforce.com, and penetrated the lower end of the market using an Indian cost structure.

In the case of Freshdesk, their main competitor, Zendesk, is operating with a San Francisco – Copenhagen cost-structure, and will find it harder to compete with this strategy. Zendesk is heavily financed by Benchmark and Charles River and has 10,000 customers. They charge $9, $29 and $59 per agent per month, and I am eager to see bootstrapped, scrappy Freshdesk morph their pricing structure to aggressively compete with them. Higher end players like ServiceCloud charges $65, $135 & $260 per agent per month. RightNow’s per agent price starts at $110 per agent per month.

The space is validated. The game, now, is to push the envelope on price, performance and functionality – a game that 1M/1M looks forward to helping Freshdesk play!

You can read more about Freshdesk on the 1M/1M Incubation Radar today. The company already has paying customers, and a validated business model. They have an opportunity ahead to build a billion dollar company.

Bizosys (10Screens)
Then Abinash Karana from Bangalore, India, presented 10Screens from Bizosys. Bizosys Technologies, a Bangalore, India based software engineering company was founded in 2009. The founders, Sunil Guttula and Abinasha Karana are experienced IT professional with 15 years of experience between them solving various enterprise IT problems. Guttula, Bizosys’ CEO, and Karana founded the company with the goal to “simplify software development.”

Toward that end, they have created two products. The first is HSearch, a NoSQL technology based search engine for big data that aims to break the barrier of scale of growing information and accessing it across information silos. The second product is 10Screens, a tool to visualize business requirements critical to software development, which tend to be hampered by poor communication among various stakeholders. 10Screens is currently also a finalist in the Microsoft BizSpark India Startup Challenge.

This company is 100% bootstrapped, and like Freshdesk, they are also offering a value proposition at a substantially lower price-point than competitors, making it affordable for small companies. Outsourcing is spreading at a frantic pace today with a global footprint, and players like oDesk and eLance have made it very easy for companies to connect with outsourcing vendors. Now, if the communication can be smoothened, the entire process will become a great deal more productive.

In 1M/1M, we are committed to supporting businesses that are not only focusing on billion dollar market opportunities, but also those that focus on $5M, $10M, $20M niches. We see Bizosys as a promising niche vendor with demonstrated capabilities in creative bootstrapping. We look forward to helping them move through the milestones of various levels of validation and market penetration, on the way to becoming a sustainable, profitable company delivering real value to customers.

You can also read more about Bizosys on the 1M/1M Incubation Radar today. The company already has paying customers and a validated product.

Techcello
Next, Ram Kumar, also from Chennai, India, discussed Techcello, a multi-tenant SaaS framework for moving applications from .NET to a cloud architecture. The value proposition is definitely interesting, and the company has already validated with customers. In fact, they generated $100k in revenues over the last year, since they first pitched at one of our roundtables. Techcello presented a TAM of about $25M-$50M a year, which I haven’t had a chance to study. They need to get a handle on the customer acquisition strategy, and I advised Ram Kumar to utilize the Positioning and Customer Acquisition modules of the 1M/1M premium curriculum to work on it further.

Luna Ergonomics
Next, Abhijit Bhattacharjee from Noida, India, pitched Luna Ergonomics’ CleverTextingä and the Panini Keypad. The technology has been highly acclaimed in the mobile device community as a way to let users type in multiple, especially non-Latin, languages. LG is licensing the technology, and many other device vendors are in the queue. Abhijit foresees primarily a technology licensing business model whereby device vendors would be paying royalty per handset or tablet. This, needless to say, projects a very large TAM.

Having worked on technology licensing businesses, I have a good idea on how challenging those are from a sales cycle and cash flow perspective, and since Abhijit is still running a bootstrapped operation, I asked him about his strategy to manage the long sales cycle, and the associated cash flow challenge. Well, Abhijit believes that he can sell enough apps on iTunes and other app stores to mitigate the cash flow challenge, and assured me that he runs a very tight shop.

Very cool technology, and I think this company has a fair shot at winning the mobile category in the Microsoft challenge. To learn more, you can check out some of the videos here.

Blue Coin
Last up, Sunil Sharma from Walnut Creek, California, presented Blue Coin, a loyalty program management platform and service catering to small to medium size businesses. Effectively, Sunil is speaking to a trend that I have been discussing recently on my blog that companies like Groupon are pointing at: revenue sharing with merchants for providing marketing services. In my recent piece, There’s a Trend To Spot In Groupon’s Growth Rate, I noted that, ‘Simply put, they are offering a massive channel and effective customer acquisition strategy for merchants, small and large, and for that, they charge a hefty channel fee.’

In the future, the channel fee will, perhaps, go down. But Sunil is saying that he can provide yet another kind of marketing service to local merchants where he will also be charging a channel fee.

I like this genre of thinking, and would look forward to watching Blue Coin evolve. The company is still very early, and has just completed an alpha prototype. But this is not that difficult a business to validate, and Sunil intends to bootstrap for another 6-8 months, during which time, I am sure, the business can be sufficiently validated.

You can select the business you like best of those discussed today through a poll on the 1M/1M Facebook page.

The recording of today’s roundtable can be found here. Recordings of previous roundtables are all available here. We will be holding future roundtables at 8 a.m. PDT on the following dates:

Thursday, June 23, 2011: Register Here.

Thursday, June 30, 2011: Register Here.

Thursday, July 21, 2011: Register Here.

Thursday, July 28, 2011: Register Here.

And you can sign up for the 1M/1M premium program here.

What makes a valuable company?

Great article on what creates a valuable company – while the article is rooted in a discussion around “revenue multiples”, the key characteristics it outlines seem generally true for valuable companies. Summary:
1. Sustainable competitive advantage
2. Network effects
3. Revenue visibility
4. Customer lock-in
5. Gross Margins
6. Marginal profitability/ Profit scalability
7. Customer concentration
8. Partner dependency
9. Organic demand
10. Growth

Read on
.