Author Archive for Vamsi

Project Management tools for SMB IT services firms

Published by Vamsi on April 18, 2008 in General.
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Project Management is the life for IT services firms. Without strong project management processes and good enterprise project management tools, delivery will suffer. I have seen that major outsourcing firms such as TCS, Infosys, CTS and others have their internal project management tools to manage delivery. However for smaller IT services firms (75-150 ppl) developing internal tools is quite expensive. Nor can they go with established 3rd party tools (again expensive). Are there any open sources alternatives for this? Are there any enterprise open source project management tools that are conducive for IT/ professional services? (I have seen many tools that are desktop based). It would be great if someone can shed light on this.

regards,
Vamsi.

Stock compensation in early stage start-ups: Shares or Stock options?

Published by Vamsi on February 17, 2008 in General.
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I have a question regarding compensation for key employees in early stage start-ups. From an employee and company standpoint which one is better? Shares or stock options? For example: Consider an early stage venture that has total share capital of say Rs.5Cr (50L shares at Rs.10 par value) post first round funding. They would like to hire a senior professional as the CEO. The CEO will take a huge pay cut in lieu of 10% equity (with a 4 yr vesting period) in the company. I can think of two ways to implement this:

1. Allotting shares to the CEO: 10% equity would amount to about 5.5L newly issued shares and new share capital of Rs.55L. However this would be a huge expense on the company’s books (even though there is no cash exchange. The company gives 55L to the executive and he/she gives it back by purchasing 5.5L shares). Is there any way the company can allot shares without incurring the expense on the books? Can shares be transferred from existing shareholders to the executive?
2. Stock options: The company can issue 5.5L stock options with a strike price of Rs.10. In this case what are the rights of option holders (ie the executive)? Is he/she eligible for dividends, bonus share grants, voting rights etc?

I am sure people in venturewoods must have faced this issue. Which is a better option?

Compensation in early stage ventures

Published by Vamsi on October 26, 2007 in General.
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Folks, I am not sure if this has been discussed before. If so, can you pls direct me to the relevant posting?

I would like to know about the standard practices to decide compensation for early stage employees. Consider this example: I am planning to hire a person at the CxO level. My company is about 15-20 people. Of these say 4-5 ppl are the Sr Mgmt. The Sr Mgmt have equity stake and the remaining employees as low level guys hired at market salary. Now if I have to add another person at the CXO level, are there any thumb rules for compensation? Say mkt salary for this guy is over 20L. How can I estimate a fair salary/stock package? Pls let me know in both cases - 1. the company has a valuation 2. The company has never been valued.

regards,
Vamsi.

Online and offline classifieds - Disconnect in traditional media

Published by Vamsi on September 12, 2007 in Ideas & Companies.
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Folks, I have been thinking about this for sometime: All of us know, classifieds is big business. Both online and offline. In the offline world traditional media like newspapers are the big gorillas - they basically built the classifieds industry. In the online world we of have craigslist, networks such as google adwords, vertical classifieds such as magicbricks, trulia etc. Though newspapers have gone online and online classifieds are proving to be successful businesses, I feel that there a distinct disconnect between the offline and online worlds. Why aren’t newspapers (or any other traditional media) integrating their offline classifieds with their websites? Online classifieds of all newspapers (thehindu, timesofindia, local papers like deccan chronicle, eenaadu) suck big time - they have minimal/obsolete content, search/usability features are non-existent. What could be the reason for this?

I feel newspapers have everything going for them 1. They have a captive customer set (who give them offline classifieds). So content (and revenues) is not an issue. Pricing could be different for online. 2. They have a decent online reader base. So integrating the online and offline worlds should be the most obvious thing to do. But this definitely is not happening. Even newspapers in US (NY Times etc) dont seem have integrated their online and offline worlds. Only google (who buys a lot of print ad slots) seems to be bridging this.

I would like to understand the reasons for this disconnect. Are they purely cultural - sticking to the existing cash cow and under estimating the online effect? Or is it more than that?
Are there any traditional media which have successfully embraced the online classifieds model - can anyone point some examples? It would be great if someone can throw some numbers - typical revenues made through offline classifieds. How much can online classifieds effect the overall revenues for the business etc.

I strongly feel there is a business opportunity here - enabling traditional media to broaden their pie. If you want to collaborate on this pls comment or directly contact me.

regards,
Vamsi vvkrishna1@gmail.com

Content Aggregation sites in India: Legal problems ?

Published by Vamsi on July 11, 2007 in Ideas & Companies.
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There have been quite a few content aggregation sites that have cropped up in the recent past - both in India and US. ixigo.com, Yahoo Farechase, zoomtra for travel, Yahoo Jobsearch, bixee etc for jobs, spoteazy for electronics and there are many others in US in this space. My question is: What are the legality issues w.r.t content aggregation? Can the host websites sue the content aggregator for using their content for “commercial purposes”?

For example: I build a car portal aggregator from carwale.com, carzoo.com, carsalesindia.com etc. When a user searches on my website, he/she is presented results from any of these websites (with a brief summary) and when he/she clicks the link, they are taken to the host website. My revenue stream is sponsored ads. Once I get sufficient traffic, I may also open up the site to take listings directly.

Can carwale.com etc sue me on the basis “I am using their information for commercial purposes” or “I am using copyrighted content” etc – and yes, its written in the terms and conditions of all the content websites that their content cannot be used for commercial use without their explicit approval.

Atleast with travel, jobs the main revenue stream for the host web sites is not ad based (they are getting paid for subscription or when a transaction takes place). So content aggregators may not be perceived as direct competitors. But for free listing providers such as directory services, car listings, yellow pages, real estate websites where their primary revenue stream is also ad-based, content aggregators can be perceived as direct competitors (even though they drive traffic to the host site).

Do you think the host websites would actively sue the content aggregators. btw, CAN they sue? What about the “fair use” clauses – can they protect the content aggregators (in India)?

First of all, is this a big issue? How are the current content aggregators (in India) dealing with this issue? And should start-ups be worried about this? And how should they deal with this?

I would appreciate if anyone can shed more light on this.

regards
Vamsi (http://vamsikv.wordpress.com)