Christening of a Tribe and Launch of Home Tour Videos

iSPIRT is not a tradebody. It is a think tank focussed on transforming India into a Product Nation. To describe the set of things we do to make this happen, we have created four Home Tour videos. They will give you a good idea of what iSPIRT is doing today through the voices of some of our anchor volunteers.

There was a trigger to create these these Home Tour videos. Recently the tribe of product entrepreneurs touched by one of iSPIRT’s programs swelled to over 1000 people! Many of them told us that they know that there is a lot going on in iSPIRT but don’t have the full picture.

As many of you know, we are believers in deep impact. We would rather touch fewer participants (entrepreneurs, policy makers, buyers) and make a big difference to their lives than go after shallow engagement with many. In light of this, having an iSPIRT tribe of 1000 software product entrepreneurs is a big moment for us. To mark this occasion, we christened this tribe as the Product Nation Founders Tribe(PNFT)! More power to them. They will make India proud.

Here’s how India’s “Product Nation” ambition be achieved and what the Budget can do for that ambition

The Next Google, Made in India

If you look at the Indian business landscape, you will see several successful services companies in fields like airlines (e.g. Jet, Indigo), health care (e.g. Apollo, Manipal), mobile phone services (e.g. Idea, Airtel) and IT Services (e.g. TCS, Infosys). Many of these companies are comparable to global peers, if not potential world beaters. What we don’t have are the corresponding product companies. We don’t have an aircraft maker like Boeing, a pharma company like Pfizer, a network equipment company like Cisco, or a software product company like Microsoft.

Is this is a problem? Yes. Because Boeing and Airbus alone generate almost as much profit as all global airlines put together. Pfizer’s profits are more than the profits of top 100 hospitals in US. Cisco’s profits are more than those of all European mobile operators. Microsoft generates more profit that the profits of top 20 pure-play global IT Services firms. Take a moment to digest that and it becomes clear that if India remains bereft of product companies, it won’t be a sustainable economy in the future.

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Building product companies is hard, to be sure. Despite the fanfare, Tata Motors’ Nano has failed. And, sadly, Bajaj has been humbled by Honda in the last two years. In high-tech, Ittiam, despite its success in developing core intellectual property in online video, hasn’t broken into the main league. And, with our borders open to global competition, is it too far fetched to imagine that in a few years Amazon would have pipped Flipkart and Uber, not Ola, would rule our roads? We may have Indian players serving our digital consumers, but most categories might be dominated by foreign companies. Google already owns our search, Skype owns voice messaging, Facebook owns social media.

Is India destined to lose all these battles? Maybe not! But if we have to win, we have to embrace a new gameplan. Products, especially software products, are a winner-take-all business. Either you win or you are a nobody. Its not a place for the faint hearted.

In fact, tentativeness translates into a loss. It leads to sub-critical investments. We are staring at a costly example of this in the nuclear reactor industry right now. India can build 700 MW reactors. But economies of scale now kick-in at 1600 MW. Since we didn’t invest enough in the last 20 years (despite a wonderful start that Homi Bhabha gave us in 1950s), we are not a player in this large-reactor segment. So we will spend more on buying these bigger reactors from France, Russia and US in the next three years than what we have spent on our entire nuclear industry in the past 50 years! This is a really expensive failure.

If this was a one-off case it would still be okay. It is unfortunately not. In telecom, despite CDOT, CDAC and Sam Pitroda, we have only created one Tejas Networks, a nifty networking start-up from Bangalore. But, guess what? Tejas gets a pidly 1% of the annual telecom capex buys in the country. Rest is imported. We have a big rail network but no rail equipment companies. We are a generic drugs superpower but limp when it comes to new drug discoveries. These failures to create product winners don’t even faze us. We pretend it doesn’t matter.

We don’t even introspect why this is the case. When one sets out to create the world’s best hospital, airline or IT Services company, one builds in layers over years. But building a world class product company needs a different mindset. You have go all-in and bet-the-company on market or technology shift that is underway. This mindset is new to us in India. Our success in building services companies comes in the way. We have to accept this Provenance Effect; it is subtle yet significant.

To be sure, we are not the only victims of this effect. Taiwan is a victim of this too. It isn’t a player in mobile phones, ironically, because its design services legacy holds it back. Venezuela is not able to crack the chocolate market. El Ray owns the high end cocoa market, a key raw ingredient in chocolate, but comes up a cropper in high chocolates. If you ask the Belgians or Swiss, they tell you that they are a chocolate nation because they don’t have the cocoa mindset. Lack of a services industry legacy helps not just Korea but also Estonia (created Skype) and Finland (land of Nokia and Angry Bird games). It turns out that mindset matters — big time!

We have to jettison two ideas that hold us back from becoming a Product Nation! The first one is rather simple. We have to accept that no matter how well-run Indigo Airlines is it’ll not become a Embraer or Boeing. Similarly, a Narayana Hrudayalaya hospital will never bring a drug to market like a Pfizer does. Airtel or Verizon will never build a router like Cisco or Juniper do. And TCS will never be a Microsoft. Acknowledging this plain reality is the first step that we must take.

Then, we must discard our mentality of unbridled greed and reluctance to make bets — best showcased in our penchant for large Olympics contingents. Nobody cares about how many athletes you send to a sports competition, they only care about the number of medals you won. To improve odds of winning, small focussed efforts produce better results than grandiose schemes. Today, we have four times more new startups than Israel for one-sixth the outcomes. One reason is that the ecosystem enablers are narrowly sector focussed in Israel. The accelerators that help medical device companies don’t work with cyber-security start-ups there. Can’t we have a sector-focussed approach in India aiming at solar energy or medical devices, to name just two promising areas to bet on? If someone needs proof of concept: look at our performance in badminton and wrestling in India in recent years. The enablers in these sports are game-specific. Anything that smells like a generic “startup” program will have a low impact. It quite likely to be a scam!

Software product entrepreneurs when they are successful make a big economic impact in this winner-take-all world. So they are being courted worldwide. US is trying to get the Startup Visas in place for them. Canada already has a working program. Singapore has startup tax exemption. UK is in the game too. In our last budget there was a tantalizing line about “a special focus on software product startups”. Nine months have passed and nothing material has happened yet. Maybe this new budget will bring some well thought-out policies to light. This year 75% of newly funded software product startups will redomicile themselves in Singapore or US (up from 54% last year).

It is time for India to wake up to our Product Nation imperative. It is an opportunity for the NDA government to write history again. In 1998, they introduced a 108 point policy for IT services and we have the benefits around us to see. Now, they must do the same for software products. For the first time in modern India’s history, we have a chance to create world-winning products from India. The decisions we take today to support our flight to become a Product Nation will decide whether tomorrow’s Google, Viagra,Facebook, or Uber come from our nation. Act now.

Jointly written by Mohandas Pai & Sharad Sharma for Economic Times. 

Think Big! Build a Creative Culture or Transform Into It!

I started writing about Thinking Big and it is turning out to be a serial topic! As Indians, technical stuff comes naturally, business thinking comes naturally, but creativity is a touch-feely subject that many of us are not that comfortable with! We usually give it lip service and move on to more important stuff like coding or making sales calls!

You ask most Software Product Entrepreneurs about their products, and the third sentence will descend into technical details, programming languages and feature sets.

But that’s exactly the opposite of what we need to be thinking about if we want to build globally competitive, big, huge companies right there in India.

The usual disclaimers first – If you are already running a profitable software product company that serves the Indian market, good for you! If you are already running a successful software product company that does not innovate but magically keeps finding customers, revenues and profits, this article is not for you! If you think that Indian Software Product companies need to think small and be happy serving some section of the market, Indian or globally, this article may not be for you.

This article is for companies and entrepreneurs that are wondering how to build a creative culture like that of facebook, google, twitter or Pinterest and scale globally, right there in India.

That starts with the complete buy-in of the founders of a creative culture in the company and they  will be successful in as far as they act and do in keeping with that culture. Not all companies are on the same level with respect to this culture but to smaller or greater extents that is something they all must have and do have in common to succeed.

Being creative does not mean thinking up whole new products overnight, but providing and encouraging creativity in whatever function someone performs in your organization. It can be as simple telling your junior-most engineer, “here’s a problem that I want you to solve. I don’t care how you solve it. But come up with something new”, rather than telling them how to solve it, which programming language and tools to use. If they struggle, you can always jump in and guide them but the key question is “Do you give them the chance to attempt something on their own first?” And do you do this every day?

Do not underestimate the influence of Indian Culture in preventing the creative culture from forming in your company. We act in many subtle, unconscious, hierarchical ways in our companies that can snuff the creative instincts in a jiffy. The first time you quickly overrule something creative your engineer has proposed, is the time when the whole thing is dead. People revert back to a subservient mode and wait for instructions, having learned a painful lesson! Others watch this and have learned the same lesson too.

Building a creative culture is hard. Transforming into one is even harder!

It starts with hiring – are you hiring creative people? How would you know? Classic resumes and classic interviewing techniques systematically eliminate the hiring of creative people! When Microsoft or Google or facebook have “strange” interviewing techniques that pose problems that do not have a single solution or involve coming up with creative solutions, they are looking for those people who can think differently and creatively!

I am not suggesting that you forego looking for basic competencies, qualifications and experience. But what are you doing beyond that? If you have one position and you have 25 very qualified, technically vetted people, nothing prevents an Indian start-up from following the same interviewing and testing strategies that some of these companies follow to unearth the creative five among those 25! And hire across India if you could.

Diversity is the essence of creativity. People with different life experiences approach problems differently and you will be all the richer for it since creative juices start flowing when you have people in the same room approaching problems differently!

Once you have hired the creative people, building a creative culture starts at the top and has to be reflected in everything you say and do. Otherwise people get the wrong signals and clam up quickly. How many times have you NOT decided on something technical for your entire engineering team but instead called for a Brainstorming Session? How are you sure that the solution you have thought of is the better one than something any of your engineering team members may come up with on their own? It is worth going through the whole exercise anyway, even if your idea prevails in the end in the interest of your company. But you have sent a subtle message that ideas are welcome, will be considered and evaluated fairly!

In a start-up company it is very hard to do these things with all the time pressures but is certainly worth those extra hours since it will pay off for you in unexpected ways down the road. In a start-up, just remember that you are really grooming a set of leaders that are trained in this creative culture and when they lead groups of people, hopefully they would follow the same lead.

Flex time, brainstorming sessions, ping pong in the cafeteria, team building sessions with humour thrown in for good measure, are all small building blocks that build a creative culture. But they are only the icing on the cake. The cake is you and the management team’s thinking and acting around the company. Does it say – we value creativity and your ideas are welcome?

Transforming an existing culture is even more painful than building one, but it can be done. Unfortunately, not every employee is suitable for that kind of transformation. You will have to do some weeding first. You may have to get rid of people and leaders that don’t buy into this kind of approach and replace them with those that do. Then all the approaches that are recommended for a start-up apply to a mature company also.

To those who say it cannot be done in India and these are high-falutin ideas from out-of-touch expats, I could not carry more disappointing news! I have personally done it in our start-up company in Chennai. We hired people from the North and threw them in with others from the South. Creative cultures are about TRUST and there is nothing more appealing and motivating to a technically qualified, creative fresher than to be trusted with some big task! Not only did we find creative solutions even though our experienced leaders or me could have suggested the way on day 1, you would be surprised how quickly these people trained themselves on the basics, and solved problems. And in unexpected creative ways!

So before you expect BIG things out of your company, ask yourselves the question – Have I built a creative culture? Have I transformed my existing culture into a creative one or at least on the way there?

Creative cultures ask constantly the question “What If we do or have….” and out of that comes big products and big companies. It’s not just a nice-to-have. It is everything! Not Java or Python, iPhone or Android, not nicer offices and a well stocked cafeteria.

Do you trust your employees enough to be creative? Do you give them the chance?

The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. – F. Scott Fitzgerald