India Innovation Forum

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IBM Venture Group is organizing a Forum for Venture Capitalists, Technologists and Entrepreneurs in Bangalore for two days on the dates of May 8th and 9th of this month.

I was sent an invite – rather was nominated – and will be attending it, as the topic of discussion is quite relevant and interesting to say the least: “How do you foster Innovation in India”. I did go through the Agenda, and there is a fair bit of campers from IBM who are going to be talking, but there are also a fair bit of round-table discussions which should have a neutral bias and should have some very interesting thoughts to share – atleast that is my hope.

If you are going to be there, or are in bangalore and would like to meet, just ping me and let’s catch up. I should be relatively free on the 8th.

 
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Indian Entrepreneurs. Western Ideologies.

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I had quite a long conversation with Josh of Footprint ventures yesterday. It is a conversation I much enjoyed, partly cause we, for some reason, started asking all the big questions as to what was lacking in the Indian startup ecosystem. Right from, “force fitted ideas”, to “lack of seasoned entrepreneurs” to “lack of funds for really early stage companies”, it was all laid out and discussed upon.

In some way it was quite surprising and comforting, cause Proto.in is actually trying to address all these issues. Most of these issues can be solved when the involved parties come together and atleast speak their heart out. Proto.in certainly makes way for that.

Here’s one train of discussion that went on:

What is the biggest problem with Indian startups today?

You have gotten it right, if your answer is “The ability to scale”. It is certainly just one of the problems, but it is also a big one.

In most cases the basic issue comes down to this: Someone takes a radical idea from the west or somewhere far off, makes the tweak and makes it work here in India. When it comes to the matter of scaling, we do come to realize that everything that this model is based upon, is on a lot of concrete numbers that are from the west and shaking them might collapse the entire business itself. It has happened and unfortunately will go on for sometime – unless we realize the error in our ways.

There are two factors which are contributing to this issue: Most of the VC firms that are based here in India are from the west. They are much more familiar with business models that work there and arent quite familiar with the mass numbers that india presents, or working with low margin profits. What seems attractive to most firms, is the same – or familiar model of the west, twisted to fit the indian ecosystem. The other issue is the return of the entrepreneurs from the west. Most of them also are so drenched in the lifestyle of the west, that they sometimes forget that inorder to build a durable business model, it takes a fresh ground up approach.

But all in all, I dont think this is a bad thing. We all live to learn and learn to live. There is much that we can learn from the proven business models of the west. We don’t have to rewrite investment principles, and the basics that go with running any business – but we also need to realize and acknowledge that we need to define our own elements, principles and business models.

Much of this is going to require an indepth analysis of our own market segment. It is very hard – almost impossible – to get any statistics about the market segment that we are targetting – if you are building a product for India. To cite an example, I can hardly get any statistics about bloggers in India, and we still keep quoting the global figures that everybody is running with. We need initiatives like that to be kicked off.

We do have our setbacks, but I am positive that when we get back on our feet, we are definitely a force to be reckoned with. Numbers definitely don’t lie.

 
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I Mean a Service, Not a Website Silly!

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lately there is a confusion that is running rampant and not helping anyone, I see. Everyone who has ever anything to do with a web server, or some Javascript code seems to claim to be a web 2.0 company – Even worse is that those who are doing nothing more than a information portal, are claiming to run “services”. Perhaps its time to clarify something.

So what is MY definition between a Web Service and a [Information] Portal? Well, a service is essentially a tool. It is on the web, anyone can use it and in most cases it is free – but at the end of the day whats crucial is to know that it is a tool. It is built with a specific purpose in mind and a pain-point that it addresses. Just as a hammer is meant for driving nails, and a shovel for digging, a web ‘service’ clearly is built for a purpose with all the elements to make that functionality a pleasing experience.

Portals, and information portals on the other hand are like Encyclopedias. They dont require an action nor a problem to solve. It’s pretty much like one reading the enclyclopedia, where they can choose to do something about the information, but thats pretty much upto them. Contrast that to a person standing with a hammer in his hand doing nothing and you’ll see that there is a stark difference between the two.

The problem with perception is that, both of these two are valued on eye-balls and they both use usage statistics to measure the impact that they’ve created – which translates to value, and there is no clear differentiation. Which is where the problem begins.

All that said, when someone says that they are building a web 2.0 service, I really do hope that those I interact with hitherto, really mean what they say.

 
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About India: The Red Pill

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India is a fast growing super economy and all that. Yah Sure. But there is a bit of horror attached to that reality.

A recent report that was published makes some pretty scary predictions about India in 2020.

“India is going to create 120 million new jobs in the organized sector in the next fifteen years”. Most of it will be coming from the rural masses. Atleast that’s what is said.

Manish Sabharwal makes a mention in Knowledge@wharton that “In Five Years, 25% of the world’s workers will be indian”

All that is being painted rosy so far. Then it begins:

Ajit Balakrishnan, the founder and CEO of of Rediff.com, in a convocation speech made the statement, closely-following reports coming from various sources that:

“….and this part is often overlooked, is that in 2040, India’s per capita GDP will be just 15% of that of the United States and a third of that of even Russia.

Another way of putting it is that even thirty five years from now, the average Indian will earn just Rs 5,000 a month. On this income he will have to feed and educate his children, look after their healthcare needs, afford entertainment and life insurance.

This means he must have a place to stay with clean water supply at, say, Rs 200 per month, uninterrupted electric power, perhaps at 50 paise per unit at the consumer level, medical insurance at, say, Rs 10 per person per month and life insurance perhaps at Rs 5 per person per month. ”

I am not sure what you feel, but that is pretty scary numbers there. The economics, when broken down do stare blankly at you and begging, actually threatening you for an answer.

We are really going to have to re-look at the very core of how we do things – right from building businesses that are not focused on the dollar signs, but inclusive and can in return capitalize more on the returns and involve more human resources and such – but such initiatives require a much united front and someone to lead them – which will be the government’s role, but sadly that is a role that the government has failed to play time and time again in the past.

Coming back to the report on India 2020, and if we were to let out a sigh of relief that the prophecy of doom shall withhold till 2040, it is not so. We will be seeing signs of our economy fluctuating and struggling to adapt very soon. In 2020, it is said that – as per projections – the indian ruppee will strenghten and will equate to a dollar in 14 ruppees. The complications of that will be all over the place – from changing valuations, right to the price of commodity goods and edibles in the market, to the instability of the currency – which is predicted to drive 50% of this country below the poverty line. This is probably one of the most rapid growing economies that the world has seen and this is a challenge that China and India both will face, in this rapid global economy – simply to adapt, and do it fast – lest we should fall and find no more a time to stand up to the world.

 
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