Startups are often projected as harsh battle fields where real hardships are part of everyday life, savings evaporate to zero and turn into huge debts, where there is no margin of error and decisions are often based purely on gut feelings. Does it frighten you? May be it's true for most of the startups. Well some people get excited by all this uncertainty. Really?? Naah! every one wants stability in life but on different terms, consciously or subconsciously.
Assume being in startup as flying a jet plane. If I start describing how a jet plane works and the scenarios that can come up then we might think that none of us can do it. But, hey! when you are in there, it goes with the flow.
Interestingly, the same is true when you are in a startup. It's a very different experience. There is nothing like describing the real scenario from the periphery. Just take a test drive and you will know the rules of the game. In reality, there is always a bigger goal which keeps the startup team moving. There is always a dream which keeps the flame burning in the hearts.
If God shows up some day and say that you won't ever be successful in startup, then most of the entrepreneurs won't like the hardships of startups. No matter how exciting they sound. Since this is an imaginative scenario hence more than half of the entrepreneurs might refute this conclusion. Anyways, the bottom line is that the purpose of being in a startup is very different; it's like achieving stability in life at your own terms.
Travel the less traveled road for more fun and anxiety. Well, we have just got one lives!!
Source: The 7 Habits of Highly Effective People, by Stephen R. Covey
Highly successful people have exactly seven habits according to Stephen R. Covey.
Get involved - Standing on the sidelines does not befit an entrepreneur. Involvement in not just your own business but also the segment you are in will be beneficial. Sitting in your own office and hoping people will seek you out is just wrong. Go to conferences, meet people socialize, and who knows you might just find inspiration or the next best thing a mentor…
Prioritize - Learn to attack your work from a priority point of view. Some things are more necessary than others. Often the curse of success is that you have no idea where to focus because you have so many projects going at the same time. Sit down with your team, find out what needs immediate attention, and get cracking. First priorities first will get you though a mountain of work in a jiffy…
Delegate - For an entrepreneur to handing out responsibilities may seem a very natural thing to do but most of our ilk refuses to give up the reins. The other extreme of no involvement is the perfectionist who tries to do everything… Learn to place trust in people, choose a team that inspires trust and is worthy of it. Delegate responsibilities and free up time for yourself to focus on the matters you are good at. You cannot possible be an expert at everything so DELEGATE…
Inspire - An entrepreneur is the ring master of the circus that is their start up. You have to be the one who gets everyone fired up when the going gets tough. Remember everyone looks to you for leadership so learn to be inspiring. Get to work before others, be the change that you want to see in your employees, set examples and push people to be the best they can be.
Read between the lines - Learning to understand what is not being said is an important quality for an entrepreneur to have. Imagine of you could tell which employee is disgruntled just by reading their body language or tone. Would it not be great if you could gauge the reactions of investors just by glancing at their expressions? Deciphering Body language may not be for everyone but if you stay approachable then people will open up to you be they employees or prospective investors.
Hiring talent - Someone once told me that great idea with a mediocre team will fail but a mediocre idea with a great team will inevitably succeed. The reasons are simple your idea is not a stagnant entity but grows with the inputs that are made to it. The better the caliber of the people who are making the inputs the better the end product will become…Hire smart responsible people, run background checks keep a close eye on your hires and that should do the trick.
Share success -An entrepreneur is only as good as the team that backs them up. Share the limelight with them whenever possible, make your team feel wanted and not as if they are slaving away for you for just a paycheck in a 9 to5. If they believe in your vision give them assurances that they are a part of it. Sharing profits is great but sharing the limelight too is even better.
Most of you who visit my blog are either entrepreneurs or are interested in being part of the startup ecosystem. With this blog post, what I have tried to share is a philosophy that, I believe, differentiates start-ups from one another in a long run.
Every start-up team today starts with a business plan - company vision, mission, problem, solution, revenue projections and how the team plans to tap in the market opportunity. In most of the cases, the business plan changes a lot as startup proceeds and meets the real world. A lot of valuable inputs come from the side of customers, investors and advisors.
Startups face lot of challenges everyday and most of the bandwidth of the management team is taken up in solving these issues. Important tasks, like product roll-out strategy, investor relations, marketing & sales strategy, become the focus of the team. What gets lost in the middle of all these tasks is the vision of the company... the team becomes result oriented, starts focusing on revenues and new business laterals than ensuring that the decisions being taken are in synergy with the vision and philosophy of the company.
At times, when the startup is money crunched, the management team takes detours or takes up tasks which have nothing to do with the vision of the company. Though nothing is wrong in taking the detours while the startup is money crunched, but it is extremely important that the management team gives a serious thought to the problem. At times like these, a quick help can come from the panel of advisors and mentors.
A visionary start-up would know the value of a good advisor panel who could help the management team in preserving the vision of the company. A good mentor ensures that the bigger picture of the company is preserved during tough times. But only being visionary doesn't help in protecting the company vision, it also requires lot of strength and character, as at times, the team needs to fight against challenges of real world like saying 'No' to quick money or project that doesn't gel with the company philosophy. I guess that's where the character of a start-up team is tested.
I believe that a start-up is only as good as its team and advisors, and the team can only progress towards excellence if the team is clear about the vision of the company. While there are many factors which make a company successful in a long run, I believe having a clear company vision and preserving it can move a start-up from the list of good start-ups to the list of excellent start-ups.
This post might sound weird to some and 'General Gyaan' to others, but I guess some would like it and I am happy with that proportion. Like they say - it's all common sense once shared.
I have been through some very basic challenges of the start-up life and 'm waiting for many others. Infact, I have been associated with lots of start-ups and I noticed one thing in common with most of them. All of them were chasing some one - some were chasing investors, others were chasing customers /clients and some else were chasing money. I think focusing on the chase makes it a bit easier but there is still a better way to ensure the end result and that is don't chase et al. What would you do then?
Try to focus on longer term perspective of the company. A catch here - most of the start-ups don't have a long term goal and that prevents them from gaining a focus for the company. So, what would you do if you stop chasing - 'Improve yourself till the point people start chasing you - invest in your brand, your people, your product and market it well.'
Here the question comes back to me on the very basic needs of mankind - roti, kapda, makaan .. we can't get these things with the general gyaan and I totally accept the logic, but so does some sensible people around. If you invest your time and money in creating a valuable product and if you have the right focus, then people start getting associated with you. Get investors as part of the team who share your vision, your approach and who stick with you for a longer term. Get people on board who trust you, who trust your approach towards work and your working style, than just the product or solution. Product changes with time, target market changes with time, infact entire ball game in the real world changes with time. For eg. - scooters market is wiped out and bikes are ruling the two-wheeler market now or Toyota is ruling the automobile industry and GM is history now. Did investors of Bajaj Scooter or Toyota plan all that while investing? May be, may be not.
The very basic point I want to share is to stop investing time and energy in the chase and start investing in people, solution and brand. In fact, if investors and customers are not coming for your product then there is something fundamentally wrong with your solution. Think over the same, improve and get them to chase you ... it's not a cake walk, but I guess we are not here for a cake walk.
One more point before I close - it's one out of the many ingredients to create a successful enterprise and not everything. Every successful enterprise today had good people to back them up, some share of luck and immense hard work. It's always company values that make it successful, so stop chasing the world.. Just improve 'n improve and wait for the day when they chase you..The game gets reversed
If this all is weird to you, then I am not writing this blog post for you.
A lot of times we feel stuck at some point in the start-up and then it comes; it seems like we are being pushed by the entire world, but the point is that the world has always remained like that. Really! It has always been like that... It always pushes down the losers. It always had! Don't you remember pushing down the people that you considered losers? That's how it works. And to add to that, people keep pushing more people towards the losers' side who are at the boundary. It sounds like 'Not me story', but trust me we all go through this point of worthlessness someday or the other. When pushed down or aside by all over, the best chance to survive is when you push back, and when you push back hard. It's all in our brains and some people can play mind games really well.
So, how do we know when we are being pushed down or pushed aside? When we start noticing that the work is getting stuck at some point and no calls are being replied even when you try the most, or when negative thoughts are thrown at you when you need them least (though this is like challenging the idea of a critique, but who cares for a critique who pushes you towards the valley of death). Isn't life complex enough to add the words of a critique when it's least needed? When people start coming out with negative thoughts and stories to make you feel like a loser, or when they make you feel that you were so much better before – trust me, it's a mind game or a mental trap. So, when we know that we are being vulnerable for mental traps, how to push it back?
First of all, we all need the right mentors in life and most of us have them as someone, but not having that in life makes you vulnerable for a slicing, and that's the worst when you are at the low. So first thing is to identify a good mentor, a big brother, close friend someone who can hear you out, learn your perspective and then add to your ideas in a constructive way. Secondly, loosen the grip a little and sound positive to even the worst of critiques since it would take them by surprise too, like one of my friend says their life is too pathetic already; you just need to show them a mirror. Anyways, third is to sit with your team and set realistic time lines and identify key bottlenecks, and start keeping track of the bottlenecks. Last but not the least, get your finances right, since no start-up is successful unless people trust you.
Before I close this one I wish all of you happy hunting in the mad world before you get hunted, but it's worth fighting back the world as you are... your attitude reflects it all – push it back!
I wrote a blog post back in 2007 (blog post) where I discussed what's the right time to dive in for a start-up, and to tell you the truth very frankly - no one would have this answer. I didn't have the answer when I was happy with my job and I don't have the answer when I am working with my start-up. You can hear 1000 stories, feel motivated and jump for it - I won't call you stupid, in fact I would help you with whatever you lack and praise you for whatever you have good. On the other hand, you can take 30 years building the perfect ship to sail, and yet you can't board it - I won't call you stupid, I would help you find that courage.
You can look out for the best teammates in the world and yet you can fail - that's the fact of the world that you need to live with everyday, but it's the battle that matters and not the outcome, and yeah fighting with the best knights cuts down the odds of failure. On the other hand, you might have no idea at all when you start and yet you can be the role model of tomorrow. So what is it that differentiates one guy from another, or let's say one start-up from other. What is the golden rule that differentiates the two sides?
People name it as team, idea, market, investors etc., while these all are pillars of a successful enterprise, but are these all? Wait, we haven't yet mentioned passion, drive, intensity, enthusiasm and all other qualities, but are these all? Is this a must to have list or good to have list, since some people say passion comes with idea and market or let's say money, and some say idea and team are secondary, all you need is passion. I don't know the order and I don't want to discuss it, since this list is endless. Did I write leadership, focus, companionship, vision - oh my god! this list is actually endless. :)
Let me put my answer in my simple language for you. I don't claim that I am a genius or Mr. Right of this topic, but this is what I believe, and it works for me, than remembering the endless list (often used by successful entrepreneurs to put their success in words). I rarely write philosophical blogs these days, since it's hard to prove them or quantify them. If you don't find my answer helpful, I apologize in advance.
I believe that we are guided by a power, actually a belief, something that we don't have control over,something way too powerful to be put in a list . I think what differentiates a successful entrepreneur is the power of believing the power of trust. We just need to trust the higher cause ,of the organization, trust the leader, trust our instincts and that's trust, which actually brings in enthusiasm, focus, drive and intensity in the workforce. In fact, that's trust which pushes us to create the best products for our clients., a trust we don't want to break It's the trust and belief of the leaders of the company that drives the course of the company. The power of believing and trust helps in creating a bonding between people, ideas, problems and solutions. Investors, customers, employees are all humans and they all need to trust you to make you successful. For others to trust you, you need to trust yourself and your thoughts, your instincts. Rest all will fall in place.Trust me!
One more thought before I close this blog post, I think there is nothing to win or lose in the world, there is an awesome journey that goes on forever. If you love being part of the cruise, be part of it, love it, enjoy it, live it, else simply jump off. There are thousand others awesome things worth doing than being an entrepreneur who doesn't love what he/she does.. Would love your comments on this one, really, because I trust that feedback works :)
Funny it may sound, but I got inspired to write this blog post while talking to a friend about start-ups, and I realized that its perception seems to work as an oasis in people's life. Well lately, I started noticing that while discussing ideas and dreams, or say being philosophical, people share their dream of doing something on their own terms or having their own company where they can work on a problem as they choose and add to some thing as they please. There seems a different tone to the discussion (almost always) like a very different note in music, a talk coming right from the roots, a dream that comes right from the heart - thirst of an intellectual. It almost sounds like an assurance coming from within that I want to work on a problem as I please and I would work on it some day. Most of these talks end with the tag line - "Some day but not today... a little later dude!"
I used the word oasis in the last paragraph, since it does the same task of keeping the thirst of entrepreneurship alive amongst potential entrepreneurs and encourages them to keep moving towards it. Only difference being that it exists for real, but remains an oasis for >95% of us. All of us want to reach it but are stuck with lots of problems, questions and confusions. It's not important when we start or how we start, it's important that we know we want to start some day, even if it means we know - "A little later dude!"
We learn lot of lessons along the paths of our lives and become better prepared to fulfill our dreams in future. Well it might not be the right time for some of us to start the journey but it always help to ensure that we collect the right stones along the path.
Remain in touch with start-ups and entrepreneurs to understand the problems they face every day and to appreciate the start-up life better
Save money for the dependents and rainy days, as start-up life is full of surprises
Start noticing market trends by tracking new ideas and businesses to understand the future market better
Last but not the least - make good friends who would help you cruise the start-up life
But whatever happens, never ever give up on the thought of reaching oasis, even if it means to have a cup of coffee and say - "A little later dude"
Joker is considered as a wild card in the arena of gamblingand is often used to complete a sequence of cards filling the 'required' gap. Role played by a joker, in the game of cards, resembles a lot with the role played by perfect startup employees. Most startups don't have huge pockets and hence can't afford the perfect employee for all the roles. Instead what they hunt for and prefer is a parallel figure of 'Joker' in the real world. Joker can prove to be a real bargain for limited startup funds and, in a long run, can prove to be a real asset to the company. How else do you expect a startup to compete agianst giants sitting out there in the market?
Real problem that exists with jokers, is their scarcity added with their career expectations and hence, finding a joker with a long term perspective, is the most difficult problem for a startup. Once you get hold of some jokers then other cards start making sense and hence over all chances of winning increase by multiple folds.
Even the business tycoons get confused about the next steps at times. No one is an exception, even Yahoo and Microsoft have seen bad times (seeing bad times) and the basic tactic of winning in long run is surviving the tough times - keeping your nostrils out of the water. Nothing is perfectly defined or nothing wins on day one, even though I believe in the philosophy - "Every battle is won before it's ever fought", but dialogues look good in movies and when said by Gordon Geeko. Being practical, every one remains scared of losing.
Darr Sabko lagta hai... Gala sabka sukhta hai, and if one considers himself winner on day one, then he is slowly turning into a sleeping giant like GM or Microsoft. You can't stop giving the extra effort - 100+20% and that's the extra push, which keeps you ahead in business, backed by a good strategy. Every company is tested at times and most of the companies collapse one day or the other. The trick to survive longer is to survive the tough times.
During tough times, smart companies keep themselves busy, either in R&D or in Sales and Marketing efforts... Doing the work is definitely better than not doing it..
Million Dollar Idea - Most of the would-be entrepreneurs in India wait for it to take the plunge in the wild start-up world. I have talked to many passionate individuals to verify this assumption and found it only partially true. Other reasons mentioned by most of them was a lack of great team and a missing ecosystem where entrepreneurship is supported.
Though I partially agree that a decent idea is some thing worth waiting for, but am not sure whether it necessarily needs to be a starting point. It can come with healthy discussions with the people you consider your core team. Great team is not some thing that we are born with. It can follow once you decide to take the plunge and start talking to people about your dreams -there are many people like us living around sharing the same vision.
Other reason which pulls the thought of entrepreneurship down - the current Indian ecosystem, is something that I found alarming since we need support from the industry veterans to change that. Everything said in newspapers seem like a marketing gimmick; we know the hard facts that the ecosystem to nurture entrepreneurs still don't exist in the country. There are VC/PE firms to infuse money in the start-up world but there are hardly any Angel investors/seed investors.
I had a chat with a VC some time back and his logic was that it's easy for us to invest 10 million dollars 5 times than 1 million dollars 50 times since it saves energy in hunting down the potential companies and later managing them. My immediate question was who needs 10 million dollars as a seed fund and he said "that's why we are not a seed fund" :)
Interesting, I guess management of time and energy of the VC firm is determining who needs to be funded today and at what stage. I am not saying that phase B or C funding is not required et al. All I am trying to mention here is that we need to nurture talent right from the start to make a Google come out of India. The very fact that most of the start-ups in India look out for $100k to $500k seed fund is because, in India, it's huge money and is good enough for a service company to sustain in the initial phase, but since the fund managers are interested in giving more money, they neglect these applications considering them trash or 'good but not interested' category.
We are missing the Indianized version of VCs - local money lenders or sahukars, who understand the Indian mentality and who could help in evolving talent right from the start. Narayan Murthy has taken a nice step in this direction though I am not sure about his targeted token amount.
We hope to see some Indianized VCs in the coming times who would help in cultivating the talent in more Indianized way. I hope we would get an answer to the 'No-Google from 1 Billion' syndrome, provided we get the right ecosystem.
Often times, people look at my smiling face and ask me whether I am enjoying this new life. I am not sure about the answer though as I am not through the tough days yet, but ya I have heard lot of success stories where people justify that they thoroughly enjoyed the journey. All said and done, I doubt whether anyone loves this state of uncertainty in the startup life when it is happening.
Obviously! when I am through this, I would justify that there was a lot of uncertainty and I would love to dive in that life again, but to answer the question from my experience so far - No, it's not a cake walk till now and I am not perfectly happy to live in this state. I, like many other entrepreneurs, clarify lot of my doubts using my faith and commitment. So, if you are waiting for my answer that I thoroughly enjoyed the ride then I can answer only when I am through it, but if you ask me whether it's a cake walk, I would say.. nice joke buddy!
Professor Nandini Vaidyanathan, an alumni of Delhi [ Images ] School of Economics, has spent 20 years in the corporate sector, working in a cross-section of industries -- security, media, pharmaceuticals, gas, office automation, equity market and animation -- all over the world.
She has been teaching entrepreneurship in premier business schools in India (IIMB), US (Princeton), Singapore (NUS) and UK (LSE) for the last four years. In 2008 alone, she taught over 2,300 students around the world.
She has been working in India, Afghanistan and the Sub-Saharan Africa. She is a mentor with New Ventures India, a joint initiative between World Resources Institute, Washington, CII Godrej [ Get Quote ] green building, Hyderabad and MentorPartners, an on-line enterprise support and mentoring platform for entrepreneurs.
She is also the mentor-promoter of a company called Startups that mentors young entrepreneurs.
Startups is actively involved with micro finance institutions in facilitating business models that transcend poverty lines and loan recovery.
She was in Hyderabad to speak at the TiE-ISB Connect 2009 on Incubation Centres and Mentors at the 'Start Up Your Venture' workshop. Soon after her speech, she was surrounded by young entrepreneurs for advice.
She took some time off from the young future entrepreneurs to speak to rediff.com.
You have spoken to many entrepreneurs all over the world. Is there any difference in the way Indians approach an idea?
I see two big differences. Entrepreneurs in India are more intelligent and better educated. That is the positive difference. But the negative difference is that there is no ecosystem in India that encourages them to be entrepreneurs.
In other parts of the world, when you say you want to be an entrepreneur, nobody raises an eyebrow. In India, if you say you have done your engineering and want to be an entrepreneur, the first thing parents ask is 'Have you gone mad? Why do you want to do that?'
Everybody will tell you that the opportunity cost of becoming an entrepreneur is very high and after you finish your MBA, you are offered fancy salaries and why would you want to give up that? I had a student in IIM Bangalore who told me, 'Ma'am, I have an offer of Rs 26 lakh (Rs 2.6 million). If I become an entrepreneur, I may not make Rs 26 lakh in my lifetime'!
This is the case with educated people. What about the not-so-educated people who start various businesses in their little space?
I work with women in the micro-enterprise space in India, Addis Ababa, Rwanda, Kabul, etc. Kabul is very difficult for women entrepreneurs.
Are these people bigger risk-takers?
They don't look at it as risk-taking. For them there is no other option to come out of poverty and build a meaningful quality life. So, they see entrepreneurship as the only option for a better life. This is how it should be.
I feel this should be the attitude of all. I was saying the same thing to some youngsters who said, 'We are engineers, how do we go about as entrepreneurs?' I said, first, you don't go for placement, be an entrepreneur. That is the only way you do it.
How does being an entrepreneur enhance the quality of life of an individual?
If you are an employee, it will take about ten years to learn all the aspects of business. If you are entrepreneur, you pretty much learn it in one year.
The downside of it is that you get grey hair faster when you are an entrepreneur! The upside is, the learning compression is phenomenal. And that makes you a better person. If you are working for somebody, you may be a marketing person or a finance person or a technology person but if you are an entrepreneur, you are all rolled into one.
The kind of exposure across functions and the ability to think on your feet, the ability to take risks, the ability to visualise tomorrow, the ability to plan for tomorrow -- I think those are skill sets you are able to acquire literally overnight. It's a hard knock. I am not saying it is easy. But you do it the hard way and you learn them at the end of it. That makes you a better person.
How should an entrepreneur look at becoming an entrepreneur -- as a wealth creator or creating something more for society?
Primarily, the motive of an entrepreneur should be creating meaning in life, enhancing the quality of life around him. It is not about making money. He wants to be an entrepreneur because he wants to create meaning for other people and himself. He is creating a better quality of life, the way it can be done.
The unintended consequence of that is wealth creation and wealth distribution, but that can't be the primary motive. Having said that, I don't mean he does it for charity; not at all. Every entrepreneur, every enterprise has to have wealth creation in the agenda. He can't keep making losses for the rest of his life because he can't sustain it. But that is an unintended consequence.
The primary reason why you become an entrepreneur is because you want to create meaning and you want to leave a footprint! That is the only way you can do it.
You said 'they leave a footprint'. In the last few years, can you name a few entrepreneurs who have impressed you?
There are many. In the last three years, I worked with over 300 entrepreneurs. Each one of them is unique. To me, every one of them is a hero. They are doing something phenomenally out there.
What will you tell those young people out there who have a desire to be entrepreneurs?
Go ahead and be an entrepreneur! Don't keep saying, 'I want to be an entrepreneur' and 'One day I will be one'. There is no 'some day'; just go out and chase your dreams!
This theory states that"the day you move from the supplier side of the value chain in the world to the needy side, you see people (friends, well wishers) approaching you dropping drastically in number and there comes a moment in life when your perception of yourself is challenged from within. While most people surrender to this moment of perception shift admitting that they can't live in this aloof arena, there remains some who evolve with a golden glow, with their characters grown multi fold. This moment of perception shift can either make or break you in life - it all depends on your understanding of the existence of this moment and how well you can handle it. People that stand by you during this time are the people that would be with you forever."
Few example for correlation of existence of this moment:
The day you lose your job, the number of people calling you drop drastically. Suddenly no one in the world is bothered about you and you meet the moment of perception shift questioning everything about yourself.
The day you are caught by cops for some thing wrong, boom! people gone and you meet the moment.
The day you are bankrupt, boom!
The day you move to the startup life, boom!
I have a strange feeling from the day I started working on my start-up. Earlier, people had a different way of discussing stuff but now the equation seems skewed. I can clearly see the theory being applicable in my life and hence I am better prepared for it. I don't think that we can really change.. I truly believe that attitude matters in life and just screw it, don't give a damn to the suckers.. Let's see the world truly believing in who we are!
This blog is written and owned by Saurabh Gupta Its been quite a ride since I decided to work full time with WKI Solutions in May 2009. I was working with ZS Associates before that and had to make a decision between settled NYC life in near future or struggler's life in start-up and I chose the later one (since you are reading the blog you must know the reason why). Few things that I have learned from my experience and I hope would help people jumping from a well settled job life to startup life:
Do check out the team potential - Team is every thing for a successful venture and you can only fight limited battles in life, hence validating team strength is a must
Do some primary research about the idea - It's not cool at all to re-invent the wheel, hence it's worth checking out the market for the idea
Do continue focusing on social-networking - It's friends & family who help you during the tough times, hence social circle helps a lot in making you succeed in start-up world
Don't over-heat yourself - Things in the outer world have a tendency to run at a slower than expected pace, so over-heating is not an option for start-ups
Don't plan a lot - Nothing rolls out the way they are planned initially, so don't get demoralized by feedbacks and changes. Remember "Rome was not built in a day"
And here's an insider tip:
Financial planning for some extra time - Things around have a hidden tendency to test you when you jump in for a start-up, so keep some extra bucks in bank for these rough patches
These are some of my dos and don'ts that might help you make the move. I have moved to Mumbai and would love to catch up for any help. Thanks for your time and feedback.
India has been the hot new place for United States venture investors for a couple of years now, attracting billions of dollars in venture capital. Are there enough promising companies to use all that cash? Yes, said Parag Saxena, who runs the biggest venture fund on the Indian subcontinent. In an interview in his New York office, he said that the opportunities in India and Southeast Asia had improved greatly over the last year. Mr. Saxena is chief executive of New Silk Route, a $1.4 billion, one-year-old fund dedicated to investments in India, Pakistan, Dubai and Southeast Asia. He raised the fund after leaving Invesco Private Capital in 2006. He is also a co-founder of Vedanta Capital, which invests in companies in the United States. Many top venture firms in the United States are looking to Asia as well. Sequoia Capital announced this month it had raised a $725 million fund for investments in Indian start-ups. Accel, New Enterprise Associates and the Mayfield Fund are also investing there. The investment opportunities for all that money flowing east have become “very attractive,” Mr. Saxena said, but he said he didn’t feel the same way a year ago. Then, he said, the sums that entrepreneurs wanted for a stake in their companies were too high. He attributed the change to tightening credit markets worldwide, not just in the last two weeks but over the course of the year, and to Indian government policies to tighten interest rates and fight inflation. “There is less money around, and less stupid money around, which leads to an improvement in prices” for venture investors, he said. For the most part, the companies seeking venture financing in India have been middle- to late-stage companies, not true start-ups like those that get financed in the United States. There are simply not enough start-ups to absorb the capital, so investors have focused on older companies. That is slowly changing, Mr. Saxena said, as “a little trickle of start-up money is coming in.” Many venture-backed companies in Asia are not technology-focused. Those that are mostly produce products that use technology that has already been perfected in the United States, like digital cable and high-definition television. But that is changing too, Mr. Saxena said. Tech companies will start leapfrogging the United States, he said, producing cutting-edge instead of copycat technologies. He has already seen this happen with technologies like L.E.D.’s. Clean technology has the potential to be even hotter in India and China than it is in the United States, he said, but not for the same reasons. “It is not because it is cheap or noble — it is driven by necessity,” he said. For example, one of the biggest users of solar panels he has seen is in a group of primary schools he started in Indian villages, where they have no alternative form of electricity. In terms of clean technology, he predicted, “the cutting-edge stuff will still be done in Silicon Valley, but after that, big manufacturing plants will open in India and there will be greater utilization there.”
India might be better known as a software services outsourcing giant to most but if you look internally, there is a new revolution brewing–the product revolution. There are hundreds of startups in the software products space, which are throwing up some very interesting products in the market.
While i-flex, Tally and Subex might still be the most recognizable Indian IT product companies, there is a whole new breed of firms that is all set to conquer the domestic market as well as dent the international markets soon. According to a recently released Nasscom-Zinnov Software Product Study, Indian software product businesses are approaching an inflection point in their evolution.
“MNCs have created product development setups in India, which have spawned a new breed of product development professionals over the last few years,” says Sudhir Sethi, chairman & managing director, IDG Ventures India. These are the entrepreneurs of the new world today who are putting down their ideas to create product-driven businesses. In the last 22 months, the team at IDG has looked at over a 1,000 new startups of which 60-70% are product startups in the areas of security, digital consumer electronics, telecom, semiconductor, Internet, and mobile VAS. In 2004, this figure would have been less than 40%. IDG has invested in eight startups of which five are IT product companies.
While India’s role in global technology
IP creation has grown steadily, several challenges have constrained the growth of homegrown software product businesses. The domestic market was small and there was a lack of experienced product development talent. The venture capital firms were skeptical of funding product startups and of course the entrepreneurs who were launching these new companies lacked adequate exposure to international markets.
These are things of the past, it seems. Today, a lot of the local technology entrepreneurs have a better perspective on IT products and their demand, having worked on key technologies at large Indian IT companies. Others who have worked in global markets have a better understanding still. They comprehend the gaps, are a lot more networked, and hence sales and marketing is not such a tough nut to crack for them today.
“The domestic market is also developing, and with the Indian economy growing so is the size of the domestic business,” says Saurabh Srivastava, chairman, Indian Venture Capital Association. A number of products designed for the local market to cater to call centres, mobile companies, BPOs are coming out of product startups. Srivastava feels that most foreign VCs actually prefer product startups (product or IP based) because they know that model best. It also helped that in the last 7-8 years, lots of Indian startups in the US because successful. “This helped local Indian startups. VCs now understand that Indian product companies today are serious,” he says.
Interestingly, building a services company in India is hard today because of the kind of competition prevalent in the market. Unless you find your niche, which fits well, it is difficult to scale. As competition intensifies, the profitability and growth of services-based small companies is much lower than their larger counterparts. It is that much more difficult for a small services company to scale, though they can still survive.
In the product space though, things are a little different. There might not be great competition in that segment but the economics of product startups are challenging. While one needs scale to survive, it takes a lot more capital too. “The product play requires one to spend a lot more on R&D to keep it going,” says Srivastava. And that is where the VCs come in. Adds a Mumbai-based analyst, “A software service company requires scale and more employees unlike a software product company. If a product is good even a small company has great future.”
“The Indian market will demand more of intellectual property (IP) and start-ups and emerging companies can tap that. The next decade belongs to companies, which can create scalable IP, which has strong market adaptability,” says Gautam Patel, partner, Battery Ventures, a US-based VC fund, which has been investing mainly in IT companies. The fund plans to invest close to $200 million within two years. Patel says they would be investing in companies that have developed an IP, which has or can have an addressable market, a good management team and has the capacity to scale if need be.
Many companies in the IT sector are already preparing to take the opportunities that are being created in India as well as in other markets. Enterprise communication solutions company, Avaya Global Connect, is looking at introducing more products in its portfolio for Internet Protocol based telephony that caters to SMEs.
Last year, IT product companies received a total VC investment of $156 million, according to data released by Zinnov.
“Product startups are always more interesting higher multiple businesses to look at compared to services. We have looked at many Indian products but are waiting for the right venture investible deal to come our way,” says Mukul Singhal at Canaan Advisors.
Lalit Bhise, CEO, Mobisy, a startup that has developed a platform for Internet applications to work on mobiles feels that one thing that helped many Indian product startups is the lowering of entry barriers. His company is focusing on the Indian market as they know it the best. “When we started we had no clue. We thought of going to international markets but realized we had a chance to sell in India,” says Bhise. Today Mobisy already has a few large Indian clients, and the next jump would be to the international markets.
For Devang Raiyani, co-founder of Blink, the scenario is a little different. The retail market that Blink, which developed an intelligent interactive shopping cart, operates in is not mature enough in India. The firm plans to tap more mature retail destinations initially where the trends are fairly settled and retailers are looking at maximising their returns.
As lot of SMEs are trying to upgrade their systems or becoming more IT savvy, the domestic space for product-based companies is expanding. Kunal Upadhyay, CEO of Ahmedabad-based CIIE (Centre for Innovation, Incubation and Entrepreneurship) is very positive about the role product startups will play by offering unique solutions for SMEs. “There is going to be huge spurt in mobile and value-added products in near future. Collaborating technologies with value-addition has been growing in many SMBs due to globalisation. This increases the business opportunity for startups,” says Upadhyay.
At CIIE, startups get to work closely with specific industries combined with getting regular inputs from a strong mentoring team to help them in refining their thought-process and ideas. CIIE has nearly 15 start-ups in its kitty at various stages of their development. Across India, there are 38 incubation centres today, which are helping product startups refine their business model and develop their product prototypes.
Sangeeta Gupta, vice president at Nasscom feels that with the domestic market growing rapidly, startups today have an option of testing their products in the Indian market before launching internationally. It is like a large beta site to test your IPs. “As the domestic market is booming and IT penetration is growing among the SMBs in India, a large number of companies are starting to develop products to cater to this market,” says Pari Natarajan, CEO, Zinnov Management Consulting.
There are an estimated 35 million SMBs in India and the PC penetration in these is growing at a fast pace. The Nasscom-Zinnov report also says that by 2015, Indian software product business revenues would be more evenly balanced between domestic and export based sales and share of revenues from the domestic market would increase from 32% in 2008 to an average of 41% by 2015 to reach $4-5 billion.
“Key parameters such as proximity of Indian software product businesses to the local market requirements, excellent understanding on localisation requirements, and ease of adopting customised and targeted sales approach would fuel this growth,” says Natarajan.
(Ravi Teja Sharma with inputs from Anirvan Ghosh, Sachin Dave & Tapash Talukdar)
This blog is written and owned by Saurabh Gupta India has 1/6th of world's population, best technology institutes and biggest democracy in the world. We have lots of other things to feel good about and we are in the direction to make this country best of the places to live in the world. There has been numerous preachers, thinkers and philosophers existing for thousands of years who have given directions to the countries.
What have we got today? We have got the work force, the energy and the zeal, not to compete or think relative w.r.t. other countries, but to evolve at an absolute level, at a level much higher than any other level existing, much broader than anyone can imagine. What we truly need today, is a leader and its not anymore the ancient Roman empire where everything can be governed by a Church.We truly need first generation entrepreneurs, who have the vision and appetite to eat the world.
If I ask the honorable Prime Minister of India that where is our country heading, he will very humbly say 'to the future', but he can only provide us the means and show us the direction. What we truly need is a thought, a virus (keeda) which can lit up millions of souls in this country to create business and to sell it through out the world. Its not because it would solve the employment, infrastructure, literacy and growth problems of the country; but it would provide a platform for innovation and excellence to cultivate. Innovation that can take us to the next millennium, to the next level.
I have always believed that we live not in our times but in our dreams. If we can dream the future and help thousands of other people do the same then we, the country of India, can contribute a ton, for the growth of the society.
Whose responsibility is it at the first place to redefine what is already defined? Or, let me reframe the question, who is expected by the common man to redefine what is defined? India invests crores of rupees on the Technical institutes, Management institutes (IITs/IIMs/NITs) and its our responsibility to not crib about the system but deliver and preach what we have learned.
I have heard thousands of people all over the world cribbing about the social conditions, economic policies, infrastructural issues etc existing in India. If its a way to justify yourselves that you don't want to contribute in the corrupt system, then you were never destined to do that anyway. But if you have slightest doubt that you will feel sorry for not paying this debt back, then its not worth a life.Thousands of IITians and IIM grads move out for everything that they curse don't exist here. Who would the government look up to solve these problems?
It has happened forever that some people crib about the system in their entire lives, while others go out and solve the problems. We are born in a time when we have the freedom to choose and think about our futures. At least use it to contribute and not to crib and plug in negative energy in the system. If you can't do anything about it, then at least support the people who are willing to do the same. That would be better than sitting in your balcony and cribbing.
Remember one thing, if you choose this or ignore this, don't mean a thing to anyone. Its bound to happen in the coming time, you would feel good in the end if you work for it.
This blog is written and owned by Saurabh Gupta
Nano (Lakhtakia) has remained in the news channels, summits and discussion forums worldwide for various reasons; be it the cheapest car tag, car for poor tag, India's technology showcase tag, Tata's promise to poor tag or the dispute over the farmer's land.
This story brings in the foreground the other side of the emerging Brand India, where some States are not ready for the change or atleast the political leaders are not ready for the change. It's the beauty of democracy which gives us the right to get the public cooperation and turn around things, and India is a living example of this concept. I would also like to bring up that if we really want things to move as planned by the government then we should move to the concept of Communism like China, but do we really want that? I would vote for 'No' as we cherish Freedom - freedom of words, thoughts, ideas and we believe in the same. I am sure that Tatas would have done great job for the future of Bengal, no doubt about it but is it only Future that we should invest in? I want to quote an example out here to give a lateral picture of what I am thinking - I always used to curse people who steal National property but never thought why they do the same. Some do it for fun and I still curse them, but there are some who are hungry and hunger comes before National identity; they steal because they are struggling with their Present. They laugh at these speeches because they are not sure about their Present and leaders are busy planning for Future. The leaders are putting money for Future but are they fulfilling the dreams of the Present? I don't know the answer to this question because all of this is politically driven but I think its a good mathematical problem as to what proportion of the national funds should be used for Future and what for Present?
Let's discuss Singur plant story, Tatas are finally planning to move out of Bengal and Singur plant is shut. Somewhere over the net, I read that its a black day for Bengal and India, and I will say Yes & I might support No too. Ratan Tata said it right that if Bengal doesn't need them then they will go away and they stood by their words. It's the decision taken by the State of Bengal to not support Tatas and they will see impact of the same in coming years, but who knows they might be happy with it. Mamata might get people's support and become CM, people would feel happier with no industrialization in the State and Tatas would get a better deal in other State. So, in the end everyone might feel happy, except the current CM who wanted the change but didn't check whether the time is right or not. You can't bring a change until the time is right. Among all of this chaos ,what will happen to the youth of Bengal. What about their Future? No issues, people move to other places if there are gaps in the system. IITians used to move to US in 80s & 90s for the same reason. People from all over the country come to Maharashtra for the same reason. We might see the Bengal government after 15 years cribbing about brain drain problem. But what should a good leader do in between all this bullshit?
Some weeks back I was given a brain teaser, when this whole Singur issue was connected to Indian partition issue in 1947. Jinnah's role was assumed to be played by Ratan Tata who is interested in Nano project only, Nehru's role was assumed to be played by Mamata Banerjee who is interested in West Bengal only, Nano plant was assumed to be Pakistan which either stays with Bengal or go away (with Ratan Tata), West Bengal now was assumed to be India and Mahatma Gandhi's role was assumed to be played by Buddhadeb Bhattacharjee. I didn't know that answer then as I wasn't sure whether moving out of Bengal (or parallely having a separate country) was a better solution or not, but in the end its about safety of our people and in democracy people come first. So, Bengal people decided against Singur and Tatas are out. People call 14th August 1947 as a black day for India and we are still fighting because of that one decision. Gandhi in 1947 was looking for peaceful lands which didn't turn out as planned. Same might exist over here too, but living in the same land and fighting is not the solution. I don't know whether it is right or not but I am sure that there exists many dimensions to this whole story.
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