Author Archive for RYK

Fire employees who aren’t workaholics…

There is an interesting post doing the rounds on the blogsphere which talks about 17 tips for startups.

Most of these tips apply to the US, but some are universal, and the one I like the most: fire employees who are not workaholics. I totally agree with this one and strongly recommend that every startup apply it. You don’t need a big team, you need 2 to 3 people working 18 hours a day, 7 days a week with no vacations. Find them and keep them.

Anyway, that post was followed by a Techcrunch post, which was a startup not too long ago and the founder had his own advice.

If you have any additional advise then do share here in the comments section.

Here are some of my tips:
1. Try and outsource as much as possible. You may not be able to recruit great people because you are a startup, but you will find fantastic entrepreneurs who are available to work on your project in an outsourced capacity.

2. Cash is a very scarce in a startup. Try and do equity deals with outsourced companies, this will bring down your costs. You will be surprised how many are willing to take equity if they like your idea

3. Don’t recruit employees. Recruit co-founders. The best people no longer want to work for companies, they want to own them, so recruit co-founders. You will be amazed at the quality of people you get, far better than if you advertsied for employees. You will need to give them some stock, but that can come from the ESOP pool. Goto www.salary.com to see how much you should set aside for ESPOS

4. Drive the costs down of everything. Don’t be shy of bargaining.

5. Work like crazy, don’t relax, get everything done at 5 times speed. You will run out of money faster than you think. You customers will come later than expected. The only chance you have of beating the system is keeping costs low and working faster than money runs out.

How did you fund your startup?

In the US it is quite common for a startup to get its 1st round of funding from SBA (small business association) or an overdraft of $100K from the neighbourhood bank. After that if cash flows can support you should be able to get more credit from the bank. Then there are Mezzanine funds which will give you convertible debt. Infact VC funding is considered very rare in the US.

In India most lending is asset based lending and not cash flow based, meaning you have to have some kind of asset such as a house inorder to raise any debt. Or you have to have parents and family that support you. But how does the average guy get started? There are some inspirational stories about how some did it and it would be great if we can hear them!

So how did you fund your startup?

IAMAI Entertainment 2.0

Digitalisation is changing how entertainment is used, distributed and developed. From gaming to music to video, mobile entertainment is revolutionizing the industry in ways unheard of just a short time ago.

What are the challenges and opportunities developing in this market place?

Who are the players?

Which business models are succeeding?

How will content and business models evolve to meet consumer demand?

Nov 2, 2007 ITC Grand Central

http://iamai.in/kalyan/digitalentertainment/index.html

17M advanced users, growing at 2.5M a year

A friend of mine who is the founder and CEO of a major Indian internet group estimates that in India there are 15M internet users, beyond email, who log in every week, and this is growing at about 2.5M a year. Plus add another 2M NRIs. This is the relevant Indian market for all non email applications like social networking, jobs, matrimonial, shopping, blogging, search, travel, etc.

What do you feel? Good enough or too small?

Digital India 12 – 15 Dec 2007

We’ve been talk long at IAMAI (Internet and Mobile Association India) about setting up a consumer facing expo with the twin aim of

1. giving our members a platform for interacting with consumers live, which is a critical component of marketing, severely lacking in India;

2. Increasing consumer awareness of the benefits of the Internet, thus helping accelerate the growth of the Internet in India.

India is possible the only major Internet nation without a live platform for product launches. In the US, it is possible to be part of a live Internet-event practically every single day, with cities like San Francisco seeing an event a week. In the US infact it is rare to see startups and new product launches building awareness through billboards and advertising, as they prefer live events which generate far more buzz.

Thanks to the efforts of IAMAI president Subho Ray, this is now a reality. 12 – 15 Dec sees Digital India 2007 at Pragati Maidan Delhi. This is a big tent event expecting a qualified 100,000 crowd of students in the day (via school tours) and business card visitors/students in the evening.

It is expected that all Internet movers and shakers will be present and many will have large displays. For startups 10×10 booths are available at a nominal Rs. 100,000. Those interested please contact Mehul Gupta: Mehul @ IAMAI dot In.

Band of Angels’ 1st Mumbai meeting

Band of Angels, now rechristened Indian Angel Network(IAN) held it’s 1st meeting in Mumbai today afternoon, where 6 businesses presented for raising early stage capital. IAN has now assigned a member to work with each of the businesses to help develop their plan and undertake diligence. Upon completion of these steps, which usually takes a month or two, IAN will either invest, decline, or request the business to revisit later.

With the Mumbai chapter now formally in place, there will be a monthly meeting where businesses can present plans and thereafter work with the team in Mumbai. This is excellent both for businesses in Mumbai/Western India, and for angel investors in this part of India. IAN hopes this will be a significant boost to entrepreneurship in Mumbai/Western India.

What struck me during some of the presentations, is that, founders were spending too much time on presenting product features and not enough on the other aspects necessary for a potential investor to evaluate the opportunity:

1. Team: what are the credentials of the founder and his/her core team? We want to know what kind of a track record of success the team has in the professional and academic level.

2. The addressable market: what is the addressable market for your product? I found that this was not tightly defined by many of the presenting founders. So (for example) if it was gourmet chocolate business for India, the founders were giving stats of the whole world’s chocolate consumption, when instead they should present data on the Indian gourmet chocolate market.

3. The competition: what is the existing and potential competition in your addressable market? This has to be presented with brutal reality.

4. Competitive advantage: what advantage do you have over your competition? Or, why should someone use you and not your competition.

5. Intellectual property: what is the intellectual property that the business will develop, such as brand, technology, processes, exclusive contracts, licenses, etc? A business without Intellectual property may not be able to sustain profitably for very long. On the flip side, especially on technology product you will need to show that you are not violating existing IPs with what you have created.

6. Marketing innovation: what marketing innovations are you undertaking to significantly cut cost of customer acquisition? Often marketing is far more expensive that building a product, and what use is a great product if you can get lots of customers/clients for it. With these in mind, you need to come up with marketing innovations which will significantly cut your marketing cost and carry your limited startup capital further. A few famous marketing innovations: Richard Branson who mastered the photo opp; Sabeer Bhatia who put the “Get your free hotmail” footer on every email; Larry & Sergey with Gmail’s 1GB storage; Kabir Mulchandani with buying out downtime on hoardings (when a hording had no ad on it) to splash AKAI, and paying taxi drivers across India to carry big empty AKAI tv boxes on their carrier to make it appear to people that lots of AKAI tvs were being sold.

7. SWOT: what are the strengths, weaknesses, opportunities and threats of the business? This gives an investor a realistic view of what s/he is getting into.

8. Proof of Concept: what is the proof that the business’ product will be accepted by the market? Are you getting good sales/adoption? Do you have positive testimonials from clients in you addressable market?

If you are presenting to IAN or any investor, please do keep the above in focus and you are sure to get a good response.

Why are we not gaga over Zoho?

Zoho is arguably the ONLY global product to come out of India from ANY company, and its a sweet product. It gives mighty Google Apps a run for their money; and Zoho’s Creator is a path breaking innovative product.

So why is VentureWoods not talking more about Zoho? Is it because of lack of awareness of Zoho? Or is it because of lack of glamor due to being non VC funded?

Questions:
1. Have you used Zoho?
2. Will you consider using any of their products for daily work? Why? Why Not?
3. Do you think Zoho can take on Google Apps or is the Google brand too big and Google quality too good?
4. What is the marketing advise you would give Zoho to gain a fair share of the applications space?

Note: I have nothing to do with Zoho, don’t know anyone there, but do use their products and I think they are brilliant.

21 August: Techcrunch reports Zoho making their services available offline; and check out what poster no. 8 in that thread has to say: http://www.techcrunch.com/2007/08/21/zoho-goes-offline-in-a-good-way/

BigAdda’s billboard bash

Just last week our internal office discussion hovered around how PR heavy strategies don’t really work in India, because PR channels like live events, blogs, niche tv, industry publications are not well developed here. People also don’t seem to talk about new products without seeing some major advertising. To get a brand off the ground in India, BIG advertising is needed.

Yet another issue in India appears to be user get user marketing in the early days of a website. What’s the biggest social network in India? Its Orkut. How did you get on? Did someone invite you? No. You got on because you had a gmail id and simply used that to sign into Orkut and after that you searched and added your friends. If you look at Orkut’s fortunes (as reported by Alexa), they really took off after Gmail id allowed Orkut access.

This week we have an example that substantiates my theory. Minglebox has been struggling for a year to get any major traction and giving it company is Fropper.com. Out of the blue comes BigAdda.com and Reliance style plasters billboards all over town. Suddenly BigAdda’s reach (as ranked by Alexa) is the same that of Minglebox and just shy of Fropper, both of which are good mature products. Click here for Alexa’s graph

India is probably the only country in the world where a social networking site has been launched through big money mass advertising. Does it bring about a drastic change in web 2.0 fundamentals which are anchored on user get user and PR? Yes it does. It also spells trouble for start-ups and good news for big boys, which is quite the opposite in the rest of the world.

However there can be exceptions. We have seen Gmail successful adopt in India to large numbers with no ad spend even in the face of advertising (Hotmail, Yahoo Mail, Indiatimes Mail, Zapak & Rediff all advertise). But then Gmail is an exceptional product, or like my CTO said “its the only damn mail that’s working all the time”.

So there is hope yet, all you gotta do is build the next Gmail ;)