Archive for December, 2012

“Has that horse bolted” – State of angel investment in India

Sumanth posted this comment on my earlier post regarding 2013 predictions for startup ecosystem in India. The topic interested me enough to write a full post on the subject of where angel investors seem to stand in the ecosystem. I write this post as one member of angel investment community in India.

First, an anecdote – I got a call from a very dear and active angel investor friend couple of weeks back. He is one of the better performing angel investors in the country. The concern in his voice was evident. His question was direct – “I have heard that VCs have stopped backing ecommerce companies in India. What is your view?” I tried explaining to him that Canaan is still keen to look at exceptional ecommerce companies, but this question captured the state and issues with angel investments in India.

1. In relation to the kind of companies angel investors are backing, i.e. companies which will need more capital in the future, not to thrive but just to survive, we remain critically dependent on the health of venture capital. Ecommerce is an extreme case in point, where large amounts of follow-on capital are required. However, even in lesser capital intensive models, requirement of follow-on capital is critical. Hence it becomes very important for angel investors to anticipate the health of venture capital industry 12 months down the line.

2. The venture capital industry in India is relatively small. And besides sporadic instances of “spray and pray”, it has mostly remained tight and focused its resources on one or two bets in a given area. That means that not more than 3-4 companies in any given space get to Series A. Angel investors need to understand this dynamic, and hence not just look at whether a company could build a good business, but also whether it has credible chances of raising the next round of capital to get there. A small VC industry also poses the issue of volatility – couple of VCs talking about an area being over-invested in enough to create a sudden negative sentiment.

3. The angel investment community in India lacks diversity of viewpoints (as does the VC industry, but that is harder to fix and will take more time.) In another discussion with a fellow Indian angel network member (a group that I co-founded and am proud to be part of) my biggest concern with our model has been that in spite of being a 200-angel-strong group, we appear like one to the entrepreneur – we are a monolith as far as assessment of opportunities is concerned. That leaves very few doors and very few perspectives for the entrepreneur to tap into. There are probably 10 other significant angel funds/groups (not counting accelerators and incubators, which tend to supply far lesser capital.) So while collectively, India may have a thousand angels at work, we represent 10-20 decision points. That is too low to trigger innovation.

No doubt, the situation is improving. However, I think of the current period as somewhat of a moment of truth for angel investment community. Is the Indian angel investor ready to lead? Are we ready to step up to the plate and make bets that we know VCs don’t like/understand today? Are we simply going to follow what we expect VCs to do 12 month down the line, or are we going to show them the way? Is our vision going to be just about the next round of financing, or creating truly great companies?

I do not imply that none of the angel investors are doing what it takes – many are, more need to. However, just like entrepreneurs don’t build businesses for angel investors, we can’t back businesses for VCs.

Angels, show me the way.

ReadWrite – Predictions for 2013

Interesting post around startup predictions for 2013 here. Somewhat US centric, and I thought I’d overlay my comments for India alongside.

1. Accelerators will slow down: India may see a lag in slowing down of accelerators, and this may not happen in 2013. We might in fact see more accelerators come up. However, I am already beginning to see angel investors getting shy. This crunch is developing as a result of angel investors experiencing the Series A contraction, and having to manage portfolios for longer than angels thought.

2. The Enterprise will strike back: The term “back” might not be relevant for India, as Indian enterprise segment awaits the first strike. However, by end of 2013, I believe that “global enterprise/saas startups from India” will start to show direction. These investments started last year and continued to build excitement through 2012 – 2013 is time to deliver.

3. The cash gap will fix the talent gap: Nope. Hopefully, incremental progress in startups’ ability to attract talent.

4. Venture capital will rebound: Largely, there hasn’t been a big drop, and venture capital should continue its somewhat stable trajectory in India. 2013-2014 is time for VCs to deliver returns. If they do, I would anticipate a spike in VC over next two years. If not, a drop. In any case, I would not expect that spike to show up within 2013.

5. Startup Ecosystems will go extinct: This comment has been made on ReadWrite in context of ex-Silicon Valley startup ecosystems. I hope (and feel confident) that Indian startup ecosystem will be an exception and will strengthen. Will Hyderabad, Pune, Chennai ecosystems come of age? Hard to bet on that.

6. Big data will crash: Another buzzword will take over. There are too many attractive applications of the underlying technology disruptions for this to go away. I see it more as the ride down the hype cycle. An interesting perspective here on big data’s second coming.

Apart from these, I am sure Indian ecosystem will have its own trends. For one, I am watching out for disruptions on mobility front, classified businesses should show a direction, couple of public market listings (if successful) may re-ignite the venture fever by 2013 end, and its always fun to see what the flavor of the year will be.

HR Ideas for Business : 6-10 : Induction, Probation, Hiring, Grievance, Expectations

Here are the next 5 Ideas for better Business performance in building Human Synergies. In this posting you would find basic information about Induction, Probation, Grievance Redressal, High Requirement Hiring and Setting Expectation of Performance. These are very day-to-day issues and needs to be addressed on the go.  Please do read and add new inputs and perspective to make this blog a repository for simple & practical solutions.

6.Induction for Performance : Induction of a new employee into the system is the first step for building Human Synergies. Induction is a process which would help the new joinees contribute the best by understanding the organisation and its systems. Organisation helps the new joinees to understand the history, policies, procedures, cultural values along with some bit of experiential learning.  This process can be simple to complex based on the person / seniority and/or implication of the decisions by the person (if they are serious more days and more in-depth induction).  Since we bring people into the organisation to perform and deliver the best, Induction would help that process effectively.

Idea: Induction plan can be few hours to few months as per the intensity of the requirement. Create a standard template for a day or two and make sure you execute as soon as you have a new joinee. You can discuss with your senior team members and set expectations of information sharing and experiential learning. Eg : The template can have columns like Date, Function/Department to visit, person to meet, Questions to Ask and time(from-to). Do not forget to ask the Inductee to ask for feedback report at the end of those few hours/days.

7. Probation: Probation is primarily to help the new joinees to get used to the environment and fit into cultural of the organisation. It is noticed that there are different set of probation methods in organisations. Some have a probation for junior level people. Some organisations follow for all the levels.  It is noticed that however the experienced or accomplished in other organisation does not guarantee the same performance in the new organisation.  The duration of the probation can be defined based on the general time frame that a new joinees get adjusted into the new system.  Based on the organisational need and the general time taken for adjustment can be considered as a yardstick in defining the duration.  There is a perceivable notion that Probation confirmation is linked to the increment/revision in salary.  This is totally not true and should not be linked to monetary gains, so that the sanctity of organisational fitment can be managed.

Idea: Set some basic parameters to help assess the involvement of the Individual into the organisation.  An open-ended one page report from the Supervisor would help in confirmation of services to keep it simple in consultation with the team member. Its also important to set the next set of expectations and measurable outputs agreed at this time.

8. One-time High Recruitment Needs: Many times you may have a need to recruit large pool of people at once.  This number would vary from organisational size.  Smaller companies to have 3-10 number of requirement may be high.  For large organisations the number could run in Hundreds. You can segregate the positions in different buckets of experience and expertise and define a different strategy.  Like for all fresh positions you can approach a college for database or for organizing interviews. For experienced you may want to use the position posting and a database access service for a short-term, with a job portal to make sure you reach the target.  Or alternatively your own employees can be of great help with little focus.

Idea: Call any Recruitment Agency and negotiate a different model, where they would work on retainer basis to close all the positions within a specific time period.  This is possible and doable for the Recruitment Company. If you really assure some basic fee for their efforts, they can do a good job than just on success based in such situations.

9. Performance Expectations:  Setting the performance expectations at each level is important. It not only important to set the expectations but also to share what outcome you would like to see as a performance. for example: for a sales person Revenue & Collection %age. Production: Production Output in numbers, Wastage %age to be maintained, For HR person : %age of positions to be filled in days from requisition, employee turnover to be contained at a level.

Idea : For every job/ position / individual define only two key components as output that you would be expecting and communicate in writing. Set a frequency of review to ensure that your single point of agenda is to discuss and see the progress.

10. Employee Grievance : Grievances typically are handled through a process of grievance handling procedure for large teams. However, In case of smaller organisation, Identify the problem related to Work norms  infrastructure, performance,Salary, increments etc., and appropriately respond.  All the policy related framework done by HR need to be interpreted and clarified.  Also see that if you need to resolve with the appropriate documents/ approvals.   If it is related to interpersonal relationships, work related issues you may want to involve the manager to get the right picture and help them to resolve.  This is a quick overview and specific problems can be handled based on the need/situation/background.  One thing for sure, do not jump to resolve issues… identify the core of the problem and involve the appropriate authorities to make sure that grievance is resolved to the best of organisational capabilities/boundaries. Finally, never think that you are going to satisfy all the parties 100%….

Idea: If you really work on a detailed grievance redressal policy  would be great. However, if you do not intend/can’t define, then Identify last one year issues and resolutions. Set some basic guidelines in such cases if repeated and communicate to the teams in common forums/intranet/meetings etc.,.  For any unresolved issues, set an escalation point and also what level it would be final and binding for resolution.

VendorStack – what software do startups use

VendorStack has an interesting map of software being used by startups (in US) of late. Seems largely relevant to Indian startups as well,

Mary Meeker update

An incremental update to Mary Meeker internet report. On the India front, internet continues to grow fast, mobile web surpasses desktop web, and smartphone penetration takes off with a lot of headroom to go,

Changing face of Mobile VAS

We have had several discussions on Mobile VAS on venturewoods earlier. Many of us have noticed the transition away from operator-led services – for reasons to do with operators (revenue shares, non payment of dues), service operators (excessive push, billing frauds), as well as regulators (ad-hoc regulations). Last friday, Canaan did an event around emerging mobile services in Bangalore. The panelists included people trying to build mobile subscription, payment as well as advertising services. Interestingly, the operator-led world was conspicuous by its absence.

Is there still a future of operator-led services? I would think so. Operator channels still remain the channels of mass distribution of mobile services. They also remain the most convenient payment mechanisms. The trick perhaps is for operators to recognize these strengths, and focus on them. Other elements, such as branding, consumer experience management, and service delivery are best left to a distributed ecosystem of providers.

Within our portfolio and outside, we are beginning to see operator-led service providers morphing their services to take more ownership of end-consumer experience. Be it in consumer directed analytics, delivery of services, or better integration of operator-led services with other touch-points like the internet. On their part, operators would be well served to re-establish consumer confidence by clearly outlining their commitments to consumers – the “bill of rights” of a mobile consumer in India.

IN50HRS BANGALORE 1ST EDITION WAS A BLAST!

 

 

The hotcake idea of the event was Design A-Board.

Design A-Board – An Interior Designer Palette on the Web. We all go through different interior designs magazines and dream about the picture perfect house while talking to an interior designer but when it comes to reality, we realize that as there is a huge communication gap between the designer and you as the mediums used are broken and there is not a simple solution for a designer to just showcase the best picks for the house like the type of flooring, the shades of paint and the subtle things for the decor. So came the Idea “Design A-Board” from an Interior Designer, Taru and the Hacker, Shubanshu.

We had around 38 Participants with 8 Mentors and 7 Jurors at the Venue, ThoughtWorks and went house full during the Demo Evening.

List of Prototypes that got demoed -

  • Hunger Free India: A Portal to give away excess food cooked. India is a country where population needs no mention. Everyday, we hear about hunger-stricken stories and at the same time, amount of food wastage that’s done in several restaurants, malls and such. Hunger Free India aims at solving the problem by connecting Food Donors to Takers to achieve a Hunger Free India.
  • SocioG:  A Kickstarter for High Impactful Social Causes. Every time we come come across a newspaper article that talks about something cool, something innovative, something that could be a social game changer, we have a slight rush of blood in the head to help such causes solve big problems. SocioG helps you discover such projects and lets you be a part of it.
  • G-Track: Realtime Tracking of Heavy Vehicles. It’s a tremendous pain for a logistic chain to keep a track of all the shipments in real time and there is no cost effective solution in the market that could be viable to any. G-Track aims at solving the problem in a very simple fashion. Adding to that, they wanted to bring in on-the-fly fuel and engine check system on board
  • Get Driving: A Portal to find the best driving schools. Finding a nearby driving school from peers is fairly easy but when the point comes to finding good ones, women friendly, there is no way out. Get Driving is the perfect pitstop for that.
  • Speechly: A “Voice” based Social Network for Mobiles. In the current age of Open Social Networks, text has been ‘the’ only primary means of communications limiting interactions. Speechly aims at taking this a step further by enabling users to leave a voice message for people to interact. Aiming at Non-English speaking Countries and the Rural population set.
  • Source-it: Tech Enabling the Mom-and-Pop Shop. Every Time you wish to get something from a nearby ‘Kirana’ shop, you’d be like, “What’s the number?”, “Would they have it?” and so on. Source-it aims at solving the problem.
  • Real Estate GIS: Precise Real Estate data on a Map. Most site these days talk about ‘availability’ of places to buy, places to rent and so on. When it comes to the point of tapering to your needs, you are lost in oblivion. Real Estate GIS lets you find every tiniest detail of information you need in a very intuitive format, on a map.
  • 50focal: Video Production and Publisher for Corporates. A lot of events happen in a company and most that happen, are internal. The video capture quality of most look as though they’ve come out of a blind alley as most are not really professional and even if they are, they are just put up on a hard disk and be long forgotten. 50focal aims at solving the problem also enabling the corporates to manage their video lot in a much better format.
  • My Share Plex: A portal to exchange unwanted goods. In this electronic era, we tend to buy just too many unwanted products and this, of late has become an ongoing phenomena. My Share Plex makes it easy for someone to put up their product on the website and the site automatically figures out the credibility of it, making it easy for anyone to buy it with ease.
  • One Bucket List: Bucket Listing Made Easy. Everybody dreams. Places, Cars, Exotic Food and what not. One Bucket List is exactly something one could crave for. Add all things awesome on mind that you wish to do and make sure things happen soon. The app is live at http://onebucketlist.com
  • Keysome: Hotkeys for Everyone. “Too many browser tabs”, “Isn’t that Tab already open?” is pretty much a common thing you hear from your peers. Keysome, a Chrome browser plugin that helps you shift between tabs with just hot keys and predefined hotkeys that are shortcuts that would let you open frequently opened websites hassle-free. The website is live at http://keysome.in

 

A Big Thank You to all the Mentors and Jury who helped shape Ideas to Interesting Prototypes with their valuable Inputs and Feedbacks.

Mentors - Vasudha Chandak from Practo, Hari Shankaran from HackerRank, Vaidhy from Apigee, Ravi Padakifrom Pravi Solutions, Freeman Murray from Startup School, Venkat Mangudi from Venkat Mangudi Consulting,Prayank Swaroop from Accel Partners & Kiran Jonnalagadda from HasGeek.

Jurors - Shashank ND from Practo, Phanindra Sama from RedBus, Sanjay Anandaraman from SeedFund,Pallav Nadhani from Fusion Charts, Ketan Hajarnavis from ThoughtWorks, Sanjeev Gadre, Rohit Singhalfrom SourceBits.

Some great words about the event:

“Seeing ideas come to life and the infectious enthusiasm” – Venkat Mangudi

“Energy – Ideas – Enthusiasm – Hope – Fire in the Belly” – Ketan Hajarnavis

 

Facebook Photo Album of the event -> https://www.facebook.com/media/set/?set=a.513376592029199.119880.427343437299182&type=1&l=000e20a1a3

 

 

 

Registrations for In50hrs  Pune are now OPEN.

 

 

Raising Venture Capital Workshop – Bangalore Dec 18

Radical Shift presents a half-day workshop on successfully navigating the venture capital funding process, delivered by a former venture capitalist.

Bangalore, December 18, 2012; 9am to 1pm

  • Are you planning to raise external funding for your boot-strapped startup?
  • Are you an SME owner looking for venture capital/private equity to accelerate growth?
  • Do you want to evaluate the pros and cons of venture capital versus alternate financing?
  • Do you want to know what VCs look for in a business pitch?
  • Do you want to position your company and business to attract the right set of investors?
  • Are you unsure what a term-sheet involves?
  • Do you want to better understand valuation, dilution and key terms/provisions?

AGENDA

  •     Pros and cons of venture funding
  •     Types of venture funds
  •     How VCs make investment decisions
  •     When to raise, how much to raise
  •     Picking the right VC
  •     Do’s and Don’ts of the funding process
  •     Valuation & Dilution
  •     Term-sheet negotiation

DURATION
 
4 Hours including Coffee & Networking.
 
Register now at:
http://www.meraevents.com/event/raising-venture-capital-workshop
 Venue:

Roseline Hotel, Koramangala, Bangalore

No. 14, 1st Main, 5th ‘A’ Block
(Near Sukh Sagar restaurant)
Koramangala
Bangalore 560095

Registration Price: Rs. 2,490
Early Bird Dec 10th Rs. 1,990
Seats limited. first-come-first-served

For more details email:
admin@radical-shift.com
OR call +91 9945199021