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Does India provide a supportive environment for getting value out of innovation?

When we talk about supporting innovation in India, the first things that come to mind are the availability of capital and people with the right skills. But, the efforts and risks involved in innovation don’t make sense unless inventors and firms can get value out of their innovative activity.

When will innovation make money for inventors? That depends on issues like: Are users willing to try out new products and services? Do the capital markets place a premium on companies that are more innovative? Can an inventor protect his innovation from being copied by others, i.e., can he be sure that he (and he alone) will be able to capture the value from the innovation he creates? The right hand side of the framework below captures these “demand-side” factors.

In this article, I will focus on the last question – the issue of value appropriation – and ask a broad question: Does India provide a supportive environment for appropriating value from Innovation?

Appropriating Value from Innovation

To answer this question, I will investigate whether the Indian system for protecting intellectual property provides an effective mechanism for protecting inventor rights. Please remember that there is an exchange relationship at the bottom of the intellectual property system: the State gives an inventor a limited time monopoly to exploit her idea in return for the inventor sharing her knowledge or idea with society. So, a good intellectual property system has to balance the needs of both inventors and society at large.

Of course, I must add that from a firm-strategy perspective, appropriating value does not depend on intellectual property alone. As the graphic below (adapted from VK Narayanan’s book Managing Technology and Innovation for Competitive Advantage) shows, a firm’s ability to appropriate value from innovation also depends on its product market actions as well as its ability to innovate continuously and stay ahead of competitors. But, the intellectual property environment, and IP strategies followed by the firm form an important third prong, and these are the focus of this post.

A Historical Perspective

Independent India started off with a fairly strong intellectual property protection system. This should not surprise us because this was intended to protect the rights of British inventors under the colonial regime. However, there was growing disquiet about this system in the first two decades after independence, particularly in the area of pharmaceuticals where strong patent protection was seen as enabling multinational drug companies to extract monopoly profits from a poor country. As is well known, this culminated in our making important amendments to the Patents Act including removal of provisions to patent new molecules, and providing relatively short periods of patent protection in all cases. The new legislation – the Indian Patents Act of 1970 – is commonly credited with the growth of India’s generic pharmaceutical industry (based on an ability to create new processes for known drugs and scale them up effectively) and some of the lowest priced drugs in the world.

By the 1990s, many things had changed. Globalization was the order of the day, and India had climbed on the globalization bandwagon. International talks were on to provide a supportive environment for global trade. These talks expanded in scope to incorporate intellectual property protection. In 1995, India signed up for the GATT treaty and promised to put in place stronger intellectual property laws by January 1, 2005. India kept its promise, though not everyone is happy about this! But, the timing was right – by 2005, many Indian companies were taking innovation more seriously, and were therefore looking for stronger intellectual property protection for their inventions.

Where do we stand today?

Information

While the law changed, the procedural aspects of patenting have taken time to catch up. One of the important characteristics of a good patent system is easy availability of information about what patents have been issued. For several years this was a major bottleneck in India with such information not available online, and available only through a set of CDs compiled by TIFAC in Delhi. Even now, though there is an online database, it is nowhere as powerful or as comprehensive as the US PTO’s website. I would have thought that with all our software and IT prowess we should have been able to build something better than what the US PTO offers but…

Procedures and Process

Another important procedural issue is the speed with which the Patent Office considers applications, and the quality of the examination process. The importance of this dimension was recognized some years ago and a drive to hire and train patent examiners was launched. But, I saw a recent advertisement of the Controller General of Patents, Designs & Trademarks calling for applications for trademark examiner positions in which they are offering a consolidated salary of Rs. 25,000 per month to people with a degree in law and 3 years experience. I am sure it will be a challenge to get well qualified people at that level of compensation.

In an alternate effort to speed up the process, there was a proposal to involve the CSIR in preliminary screening and evaluation. But this was objected to by many as the CSIR itself is an active player in the intellectual property space and is, in fact, the Indian entity with the largest number of US patents.

While it’s difficult to judge the quality of patent examination, what we do know is that after an initial spurt in the speed of examination and grants, the process has slowed down again at a time when the number of applications is on the increase. Mint newspaper carried a useful graphic recently summarizing the challenge:

The Law Itself

As far as I can make out, there has been reasonably widespread acceptance of the amendments to the Patents Act made in 2004, 2005 and 2006 except for a couple of issues. The first issue is the now infamous Section 3 (d) that seeks to prevent evergreening by pharmaceutical companies by requiring a major inventive step as reflected in enhanced therapeutic value for a molecule to be awarded a patent. This has been a contentious issue almost since Day 1 of the new patents legislation, and a series of refused / cancelled patents to big name pharmaceutical companies has shown that the law has bite.

The second issue has been the issue of compulsory licensing. On March 9, 2012, the Controller General of Patents issued the first post – 2005 compulsory licence to Natco Pharma to manufacture its equivalent of Bayer’s Nexavar, a drug for treatment of kidney cancer. This has raised a hornet’s nest, as it has raised contentious issues like (1) what is a reasonable price for a drug? (2) what constitutes “working” a patent? and (3) what is the appropriate royalty to be paid to the inventor company in the event of compulsory licensing?

It’s fascinating to note that most of the controversies regarding the new patent law in India have centered around the pharmaceutical space. Globally, the big debates on intellectual property in recent times have been in the smart phone space involving companies like Apple, Samsung, and Google (Motorola Mobility). It’s almost as though we live on two separate planets! I suppose the reason for this is that India is still not a big market for high end smartphones and therefore the patent and design wars of this industry have not spilt over into India. But this is also another indication that India has failed to find a place at the high table of the most active innovation domains (see my earlier post on the areas in which India has the most active researchers).

In our obsession with the healthcare domain, we might be missing out on developments in other sectors that call for changes in our intellectual property protection laws. A new generation of software product companies is emerging from India (see my recent article in Outlook Business), and large companies like TCS and Infosys are embracing products and platforms in their quest for “non-linear” growth. But we continue to deny software products patent protection and limit their intellectual property protection to the Copyrights Act.

Awards & Enforcement

Consistent with their position in other matters, Indian courts tend to be conservative in penalties and awards for intellectual property violations unlike the multi-million dollar (or even multi-billion dollar) awards of American courts. In a way that’s good because it prevents intellectual property from becoming a separate game of corporate strategy. But the flip side of this is that there is the distinct possibility that an inventor may not receive adequate compensation for infringement of his intellectual property rights.

This become particularly critical in the case of the small inventor who anyway fights a David vs Goliath battle if the infringer is a large company with the ability to exploit all the procedural opportunities for delay available in the Indian legal system. In fact, if I were an inventor in India that would be my main fear – I may be able to obtain a patent and other forms of intellectual property protection, but will I be able to enforce my patent rights in a meaningful and timely way? Even in the US, the inventor of the intermittent windshield wiper, Robert Kearns had to struggle for years in his battle with large US auto companies (see the graphic below); I shudder to think what would happen to an equivalent inventor in India!

As we go forward, there will also be a need to ensure greater consistency in judicial decisions in the intellectual property domain. Without any disrespect meant to our honourable judges, I can see that in some of the recent judgements they have struggled to cope with the technicalities involved. Not too far in the future, when we have a critical mass of intellectual property cases, it will help to have a single court at the appellate level as has been done in the US.

Conclusion

In the 1950s and 1960s, we saw companies like Xerox and Pilkington Glass that established monopolies in their respective industries based on technologies which had strong patent protection. Today, the pace of innovation in most industries has hastened to the extent that companies need to innovate continually to derive maximum benefit from their innovations. But, intellectual property rights continue to provide the first-level protection for innovator companies.

As India develops a modern industrial economy, and more companies depend on innovation for their competitive advantage, our need to provide an appropriate level of legal support to enable innovative companies to capture the benefit of their innovations will grow. In this, our priority should be on improving IPR-related information flows, better processes and procedures, and enforceability, and on shifting our attention beyond the healthcare industry.

Original article can also be accessed here(from Juggad to Systematic Innovation).

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Organize BarCamp and Build a $ 119 Million Idea: The Amazing Story of SlideShare

The first Indian BarCamp was help in 2006. At this unconference, it was the fortuitous breakdown in managing the distribution of speaker presentations that led to the Idea we all know as SlideShare. Today, we hear their story in an interview with the SlideShare Co-Founder – Mr. Amit Ranjan.

ProductNation: Hi Amit, Welcome to ProductNation. We are really looking forward to hear your story. So please share all the excitement and emotion that you have gone through in your journey as a product entrepreneur.

Amit Ranjan: The team got together in 2004. We were three founders including me of which two were based in the US. We built another product before SlideShare.

We were building an online research application called MindCanvas that had a narrow focus on design, user experience and usability. We started building in 2004 and launched it after eighteen months. We were a team of 7 – 8 people then.

Once launched, it started doing very well. But, what we realized that this product was suited to the B2B consulting space and thus would scale with people and not technology. So that was a disconnect. And we asked ourselves if this is what we wanted to do for the rest of our lives? The Answer – No.  So we started looking for other options.

ProductNation: SlideShare, you mean

Amit Ranjan: SlideShare as an idea happened at this juncture. The SlideShare idea was born in Delhi itself.  Avinash is aware of this. The story goes something like this. We were instrumental in organizing the first BarCamp in India. This was in March 2006 at the Adobe office in Noida.

A BarCamp is like an antithesis of a conference where attendees interested in a particular topic come together and put up a show. The SlideShare idea was born at that Bar Camp.

As the organizers we found ourselves sandwiched between two groups – presenters and attendees. The presenters wanted to share the presentations and the attendees wanted to have them. So, pen drives were being exchanged and emails with attachments were flying across the BarCamp. At the same time, there were a bunch of guys who had taken photos and videos of the presentations to put it up on YouTube and Flickr.

So, presentations that formed the Centre stage of the conference, their sharing process itself was broken. So, we started looking around if there was an online tool available to share presentations. And we found that nothing existed. So that was the starting point for SlideShare.

ProductNation: Wow. Amit, would you like to talk about your pre-2004 days? How were you thinking about entrepreneurship? Was it something that you had it in yourself? Would you like to describe that journey?

Amit Ranjan: Entrepreneurship has been accidental. It is not something that I had planned. I am an MBA and a mechanical engineer. Post MBA, I worked in the consumer products sales and marketing space. I worked with Asian Paints for four years in the Sales and Distribution function and then with Pepsi. So, I did not come from a technology background. My six year experience in the Corporate Sector was good, just that I could not see myself doing that for the rest of my life. And there was a lot of exciting stuff happening around. It was not planned that way, but when an opportunity came to try something new, we went for it.

ProductNation: Superb. Please tell us about SlideShare journey, the acquisition by LinkedIn and the future plans.

Amit Ranjan: SlideShare was started in 2006. Thankfully, since then we have seen continuous growth. This meant scaling up in technology, hiring a team, which meant funding. The sheer frenetic pace at which the application was growing taught us all about building a startup.

We had an office in Delhi and in the US Bay area. At the time of the LinkedIn acquisition we had 35 people in Delhi and 13 in the US.  Delhi team was always dominant.

In terms of the acquisition, we had a relationship with LinkedIn since 2008. LinkedIn has an application platform in which they had invited a bunch of companies. SlideShare was one of them. LinkedIn knew the company and the people. So, a relationship already existed and acquisition was a logical next step. LinkedIn is the World’s largest professional network and SlideShare, a large professional sharing community. We all agreed that there was a strong product level fit. So we began acquisition talks in the beginning of 2012.

ProductNation: Would you put the LinkedIn acquisition as your moment of glory?

Amit Ranjan: The acquisition, the way I see it was a logical step in the evolution of the company. For me, the greatest thing is SlideShare itself that we could build something large and useful. The evolution of SlideShare has always been centre stage. After five years of starting up, in 2012 when the LinkedIn opportunity came by, we saw the possibility of having more resources through a large company to grow SlideShare. And we went with it.

ProductNation: What are the future plans for SlideShare at this moment, Amit?

Amit Ranjan: SlideShare will continue as a LinkedIn subsidiary. Going forward, you will see more integrations being offered to users.

ProductNation: What has been your key learning’s while building SlideShare?

Amit Ranjan: Sharp focus on Design, Engineering and Product Management. The web is changing furiously. Applications are being launched at the drop of a hat. Most die in days. So, if you are in the products space, you have to get on top with Design, Engineering and Product Management. No doubt about that.

ProductNation: Do you have a Top 3 for a budding product entrepreneur? Top 3 things you would like product entrepreneurs to register when approaching a products business.

Amit Ranjan: An engineering culture. In the long run, you need to have a strong engineering oriented culture in the company. Because culture would define a lot of things. It defines the organization itself, the people who join, the way you work, the way you tackle competition and the way you tackle markets.

The product and technology should be built for speed and not initially for scalability. This way you can focus on acquiring users, initially. There are cases where products optimize for scalability but struggle with the initial traction.

Thirdly, access to strong mentors. At SlideShare, we had some great advisors and mentors who really helped us think clearly. Having a bunch of good advisors really helps.

ProductNation: Amit, can you please explain this tradeoff between speed and scalability with an example, if possible?

Amit Ranjan: Technical example – Databases. Relational databases hit a wall when hitting a certain number of users. But, it is easy to find talent for relational databases. So, when starting off why bother optimizing with some other database. Scalability is a Rich Man’s problem.

ProductNation: Superbly put and aptly summarized. Amit, you have been in the products space for a while. Do you see entrepreneurs committing mistakes and it’s too late before they even realize it?

Amit Ranjan: Difficult to generalize. If you ask me personally, if I start again, would I do things differently. The answer is YES. And it would be Time Management. When building a startup, there is a lot riding on the entrepreneur. Looking back, I reckon if I had hired senior / specialized people for a few functions, I could have focused time on the product. That is one area, where I could have really done better.

ProductNation: Amit, how much did the US presence, being in the valley help SlideShare?

Amit Ranjan: I wish I could make a claim that SlideShare is completely an Indian company. Unfortunately that’s not correct. Our origin has a mix on India and US. The product was born in India, two of the three founders are Indian, the majority of the team is in India, but the company was headquartered in the US as the business was more US centric. Having a presence in the Bay Area and being connected to the early adopter crowd there is a great advantage. But unlike our times, now in 2012, an environment is now available in India.

We had Dave McClure as a mentor and there was no way we could have accessed him in India in 2006. But now Dave McClure’s fund is extremely active in India. They are looking at opportunities. So entrepreneurs in India now have the opportunity.

ProductNation: Before we let you go, you have to take this one. Name Top five hot products from India.

Amit Ranjan: Oh gosh. While a lot depends on how you define a product, but I would like to mention Zoho, InMobi, SlideShare. There are some smaller startups that are creating a global impact like Fusion Charts, Visual Website Optimizer.

ProductNation: Last question. What is next for Amit Ranjan on the professional front?

Amit Ranjan: I am part of LinkedIn. I continue to head the Delhi office of SlideShare. With the LinkedIn angle, we want to take SlideShare to the Next Level. That goal stays and I work as hard as before. Being part of LinkedIn, we have a better chance with access to resources and talent. So I am busy.

Product Nation

Amit, thank you for talking to ProductNation. Good luck to you and your team

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Microsoft Accelerator Research on Starts and Closures in Indian tech startups

We are planning to release research findings every month week as part of our startup support program at the Microsoft Accelerator in India. There are about 50 different topics that we are curious about and are consistently doing research to find out ways to help our accelerator companies perform market research, target early adopters and focus on getting more customer traction.

This series is part of our accelerator database on engagement with startups, investors, mentors & entrepreneurship. Last week we did a report on Smartphone usage in India.

This week our focus is on the rate of companies starting and closing in the technology product space. Over the last few years Microsoft has been tracking new companies as part of its Bizspark program. Besides this we have access to several databases from multiple sources which has allowed us to consolidate all these into a single system to track startup activity. While we currently track over 73 different elements including founders, starts, closures, funding, etc. our focus is on trying to find patterns that can give us more clues to remove the roadblocks that reduce entrepreneurial failure early in the system.

We track over 6200+ entities – which includes services companies with a “product” they are building and also many viable side-projects, where the founder is generating some traction or revenue and 3900+ companies that are solely focused on building products (includes SaaS, eCommerce, traditional software, consumer Internet, etc.) in India.

On average there are about 450+ starts annually over the last 3 years, which has grown dramatically thanks to eCommerce.

While Bangalore has the most number of technology product startups overall, at neary 40%, Delhi/NCR came a close second in 2011, only to return to normalcy in 2012.

In terms of closure, 26% of companies still close within a year of them starting (either the founders giving up and moving on, or the company going dormant).

The biggest issue for closure (given that nearly 80%+ of all companies are bootstrapped) is collecting money from customers who have committed to paying for their usage of the product.

While not being able to raise funds is really #1, that seems to be a generic reason enough and a motherhood-and-apple-pie situation.

Unlike the valley (anecdotal information alone) most failed entrepreneurs dont go on to start another company or join a startup, but instead go to work at a much larger company (over 60%). Most reasons given were because of loans to payoff or pressure from parents (surprisingly not from any others).

Our recommendations are for new entrepreneurs to have a “cushion” of nearly 18 months in funds in their personal capacity before they delve into a new venture as opposed to 6 months.

We also recommend asking new customers for an advance in payment as part of the Proof of Concept instead of payment after the fact to aid in managing cash-flow more effectively.

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India has a drought – not of Investors, but Customers

I came across this rather misleading article by a New Investor in town, that India has a Series A drought. I think its a bit sensationalist and misleading and drinks a bit of his own coolaid and shifts blames on others, but I’d agree with the article on one count – Yes there is a drought.

I am going to start this off on the right foot. This whole venture funding phenomenon is about at the best 15 years old in India. Whenever i sit with the guys who really understand business and even remotely talk about the things we talk about – they give me a dazed and confused look. You know why? Venture capital is nothing more than a bank – a bank which specializes in lending to private companies. I cant think of a single self-respecting business man who built his business based around what the money lender thinks he should do. If Startups today are talking about funding – as their only big milestone – there is no one to blame but the loud-mouthed investors who have positioned themselves to be the focus point for these early stage entrepreneurs.

Now coming back to the topic. We see the following happening in India:

1. Compared to 7 years ago, everyone knows what a Startup is.

2. Mainstream media has accepted Starting up as a perfectly acceptable choice of career – they are dedicated shows and show hosts who think they are celebrities.

3. Almost every well known Investor (Startup Bank) has an office in India.

4. Angel Investment is on the rise and its raising angels in the country right now. I seem to be bumping into more angels than Entrepreneurs sometimes – its scary.

5. The Govt causes a fuss from time to time but predominantly has stayed out of what they dont understand.

So What’s missing?

Are there great ideas? Yes

Are there great teams? Yes

Are there great products getting built with world class UI? Yes Yes Yes, andYes

Are teams bootstrapping/saving up/ getting a bit of money to get off the ground? Yes

Is there ample Series A happening? Yes, but Not Yet at scale

Are there exits happening? Not Nearly

Read the Complete post here

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ProductNation and SandHill team up to bring industry best practices to the Software Product Industry

ProductNation, a portal dedicated to the cause of the Indian software product industry and Sandhill, a portal that offers business strategy for the software, cloud and mobile ecosystem have tied-up to share industry best practices with companies that are emerging and growing in India. This is an important development in the Indian software product landscape as it brings to the table pragmatic views from Silicon Valley and from India, which has grown to be recognized globally for its software prowess.

ProductNation was launched earlier this year in India to be the one stop resource for companies who need solutions and advice even as they conceptualize, incubate and grow their businesses. The portal is run by industry veterans who act as catalysts to bring in content from around the world and real life examples of companies who are in the software product space. The portal is run in a democratic fashion and anyone who has material to contribute from various domains is encouraged to participate.

Sandhill is run by industry leader M.R. Rangaswami from Silicon Valley, the hotbed of the software industry. Over the years, Sandhill has grown with the software industry and today is an important destination for the newer technologies and developments that must be understood by entrepreneurs who run or are contemplating to run their own enterprises.

Given that more than 400 companies start their businesses each year in India in the software product industry, it is important that an ecosystem support this endeavour to ensure that companies make a success of themselves and provide value to their customers. Today, it is estimated by Zinnov that there are more than 3,400 software product companies in the country alone with 51% located in Bangalore and the National Capital Region (NCR) around Delhi.

ProductNation encourages entrepreneurs, venture capitals, angel investors, advisors and the ecosystem in general to contribute their thoughts for the benefit of this nascent industry which has the potential to accelerate even further in the coming years.

 

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Platform Play Versus Product Play in an Indian Scenario-Part 1

From the beginning, we at Ozonetel had always wanted to build a platform. Initially, we did a VXML platform with off the shelf hardware. But VXML was not sexy enough and there were not a lot of takers. So in 2010, we did a pivot and built our own custom hardware( PRI cards) and built KooKoo and top of it. KooKoo was our attempt at Telephony Platform as a Service play. Once KooKoo was opened to the developers it took off and we got good traction. A lot of innovative telephony apps were built on top of KooKoo and telephony became cool again.
After 6-8 months, we started to think about building products and do a product play. A couple of things influenced our decision to do a product play. First was that though innovative telephony apps like connecting experts, water alerts, appointment reminders etc were being built on KooKoo, core telephony apps like PBX systems and call centers were not being built and there was a huge market opportunity. Second was that, being a bootstrapped company, market forces made us to look at alternative sources of revenue as the customer turnaround time in a platform play is longer. They have to first build their apps, market them, make money and then only they pay us 🙂
So with that, we separated out a product team in Ozonetel who would go on to build two core telephony products, a PBX on the cloud called asBizPhone and a full featured cloud call center product called as Cloudagent. So now that I have seen both the scenarios of a platform play and a product play, I thought I would share some pointers in both(no particular order).
Platform Play:
  1. Patience: You should have a lot of patience. Developers will take their own sweet time in building the application and marketing it. Many times, you will want to get in and help them develop. But that is not scalable. Though it will take time, it is better for them to figure out the solutions on their own as in the long run that will mean lesser support.
  2. Documentation: This is the most important part. You wont believe the amount of support calls that are reduced by having some decent documentation. Unfortunately, this is one area where we still have to improve and thats why we still get support calls.
  3. Logging: Your platform should explain what is happening behind the scenes to the developer through logs. It will help them in debugging the issue themselves before they reach out to support.
  4. API: Think through what and how you want to expose your API. Because, once you open it to the public and they start using it, it will be really hard to take back and you will end up supporting multiple versions.
  5. Evangelize: You should have a team of evangelists who should go to events, do live coding, help hacking communities etc to drive adoption. This is the hardest part, convincing developers to invest their time in learning your platform. It is much harder in India as the hacker community is in a nascent stage(though growing very very well).
  6. Star products: Every platform should have some star performers. They are the ones which will help in people believing in your product. Identify your star products and put all your efforts in making sure they succeed.
  7. Mashups and Blog: Build mashups on your platform yourself to showcase the capabilities. You know your platform best, so you will have to build very innovative and fun apps. After building mashups, blog about them and spread the word. Again, in India, its hard to build mashups with content from an Indian context. Till last year, we did not have a lot of APIs for Indian content. But now a lot of companies like Zomato have started opening up APIs and phone mashups can easily be built.
  8. Support: This will make or break your platform. Developers have very little patience. If they send a mail to support, they better get a response within 5-10 minutes. Otherwise, they will end up Googling for another platform which will solve their platform. Luckily, so far at least we have been able to keep our developers happy with our support. Support does not just mean technical support. Many times we have actually had to mentor a lot of startups building on our platform. You should be willing to listen to their problems and suggest advice if you have any.
  9. Developer events: You should conduct developer events and hackathons so that the new developers get to know about your platform. Unfortunately, being bootstrapped, we have not yet had funds to do this 🙂
  10. Sponsor events: In addition to conducting events, another way of getting mindshare of developers is to sponsor events. We are continuous sponsors of Startup Weekend events in India and have also sponsored hackathons in colleges like BITS where students have built very innovative applications.
In the next part I will discuss my observations on the product play.
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Start the revolution in Healthcare at StartupWeekend, New Delhi

Until the dawn of this decade not many people would have thought of transforming the way dismal healthcare system works in India let alone doing it over the course of 2 days but this is about to change as the Startup Weekend comes to Delhi on 7 Dec with a sole focus of encouraging entrepreneurs who are passionate about revolutionizing the healthcare system in India. The event will provide an excellent platform where business people, doctors, designers and awesome developers can come together and take first steps towards developing the next big thing in healthcare!

The agenda for the weekend is jam packed with keynote addresses from eminent speakers, exciting pitch sessions, intensive coaching from renowned mentors and enjoyable networking sessions. The event will be attended by leaders from health and start-up fraternity including Chavvi Gupta (Co-founder YoPharma), Subinder Khurana (Mentor, NASSCOM Emerge Forum), Paul Singh (Partner, 500 Startups), Maniraj Singh Juneja (Co-founder of MadeInHealth), Zachary Jones (CEO of Portea Medical) and Maninder Singh Grewal (MD at Religare Technologies).

Here’s an idea of what Start-up Weekend Delhi Health is going to look like from 7th December to 9th December 2012 at the American Center on KG Marg. All attendees will have an opportunity to pitch at least one idea in 60 seconds.

Please make your arrangements to be at the venue late into the night on Friday and Saturday. If you need a couch to crash on, start talking to other participants when you get to the venue. We will provide dinner on Friday evening, Breakfast/Lunch/Dinner on Saturday and Breakfast/Lunch/Snacks on Sunday.

Whether entrepreneurs found companies, find a cofounder, meet someone new, or learn a skill far outside their usual 9-to-5, everyone is guaranteed to leave the event better prepared to navigate the chaotic but fun world of start-ups. If you want to put yourself in the shoes of an entrepreneur, register now for the best weekend of your life!

Post Contributed by Abhimanyu Godara 

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Back to the Future: Software Moves as Catalysts for Driving Change

Several events in the software world during 2012 will have a notable impact on the industry for years to come, according to SandHill’s industry observers. Some are striking enough that our panelists think they deserve an award.

What software event that happened in 2012 will have the most impact over the next two to three years?

Lincoln Murphy, founder and managing director, Sixteen Ventures:  From a purely commercial standpoint — software innovation aside — there was one event that should have the attention of everyone from freemium startups to the biggest, entrenched enterprise software vendors: Microsoft’s acquisition of Yammer. Microsoft bought Yammer, a four-year-old company, for $1.2 billion not just to expand their market or for their “Cloud DNA,” but because Yammer was, quite simply, beating them in the market. This should make legacy enterprise software and ISV incumbents open their eyes to the reality of cloud startups in their market.

As an industry, enterprise software companies should have learned from Salesforce.com sneaking up on CRM vendors — including Microsoft — and taking market share. But it was brushed off as an anomaly. In 2012, 2013, and beyond, cloud-native companies disrupting and displacing entrenched, on-premises software vendors is no longer an anomaly; it’s rapidly becoming the norm.

Yammer, a cloud-native company, was winning deals against Microsoft SharePoint; and Microsoft didn’t see it as (or perhaps admit it was) a threat until it was so late that the option of buying Yammer was only available at a premium. If you’re the incumbent on-premises software company being threatened by cloud-native vendors and FUD doesn’t work anymore, what’s your move?

Kevin Cox, vice president corporate marketing, Actian Corporation: The thin client or mobile device or smartphone established itself as the most consumer-desired platform for software consumption and a dramatic extension of cloud as the new most desired platform of software. This will play out over the next three years as a disruptive reshuffling of middleware, applications and service provider markets.

Guy Smith, chief consultant, Silicon Strategies Marketing: The utter domination of Android for smartphones is a shift that cannot be discounted. Android came from nowhere to market dominance in less than two years, which changed everything. There appears to be no slowing its growth save for market saturation. If Apple releases anything like Apple Maps again, their halo sales will drop and Android will own it all.

Read the complete story at Sandhill.com

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The Battle Heats Up: Predictions on Winning Software Startups in 2013

Who will be the young software players and startups to watch in 2013, and why? We recently asked this question of our industry observers and received a variety of predictions.

Big Data, business intelligence, and analytics space

Guy Smith, chief consultant, Silicon Strategies Marketing: Without naming specific companies or founders, the players to watch will be the Big Data geeks. Advanced analytics are the next phase in wealth generation via info tech, and the Big Data folks that bridge petabytes and BI will make some good coin.

Peter Auditore, principal researcher at Asterias Research:  New agile database vendors such as Cloudera, Actian and others will provide fast, affordable solutions that address the demands of Big Data.

Jeff Kaplan, managing director of THINKstrategies and founder of the Cloud Computing Showplace: There are many, but one worth watching is SiSense in the analytics market and Apprenaissance in the mobile environment.

Howard Dresner, president, founder and chief research officer, Dresner Advisory Services, LLC: As the business increases their influence in the purchasing process, vendors that emphasize ease of purchase, deployment, use — and time to action — will be the winners in 2013.

Joe Cordo, CMO, Extraprise: A player to watch is Appature as they have already built unstructured capabilities into their campaign management platform.

Dave Peterson, Chris Lochhead, Al Ramadan; co-founders and partners at Play Bigger Advisors: Andreesen Horowitz-funded Good Data is changing the agenda from business intelligence to monetizing business data. They are fully charged and ready to bash the legacy BI market and deliver a new way for CEOs to monetize their data.(Full disclosure: they are a Play Bigger portfolio company.)

Read the complete post at Sandhill.com

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Do Your Bit – Become a Customer

What does a tech-product start-up need initially? It is not money, not more people to join the team according to me.

It needs validation, feedback, users, inputs and all of this comes from Real Customers like you & me. If a product start-up gets real users, customers who engage in day-day usage of the product, they automatically become the following:

The Product Manager, The Well-wisher, The Marketer, The Adviser, The First Investor, and Friend.

Then can come re-iteration, product tweaking, more sales, more customers, more tweaking, more code, more tweaking, more selling and once you have a little bit of traction, then can come the People to join the team (Who will be excited by progress) and the Investors (who could now see Traction).

If the First Customers can do so much for a start-up, then why not the eco-system get stronger by becoming early adopters and customers of more Indian Product companies ?

At Exotel we have been very very progressive on this front as much as we can be and there are limitations as we are a B2B company in India, but we do our bit.

We signed up initially with these companies – HireRabbit (now in TechCrunch) ,MuHive (Social Media Engagement Tool), are looking at Pacebale right now and are always willing to experiment and try new products. We have been very lucky ourselves, there have been companies in the ecosystem who signed up with us though they might have had a more “Known” brand to take, but the entrepreneurs and teams in those young fast growing companies decided to go with us. Carwale, Olacabs, Babajob, CA Club India, Practo, Akosha and more here.

A very small thing I try and do every time on Twitter, is keep connecting people who might have a use of each others products. Prominently I push all Start-up folks on Twitter to use some of the new Cab/Auto aggregators like Olacabs,  Taxiforsure, Cabs4Hire, Autowale, Savaari, Yourcabs instead of a Meru or Easy as it helps these young companies get more business and test their mettle. Another thing to do is keep connecting folks looking for Maids/Peon-clerk jobs to Chachii/Mypeon type services or help E-Commerce service/product providers get in touch with E-Commerce companies. There are in-numerable examples of what people already do and we should participate in it.

At the end of the day, if the product/service is good and adds value, the customer will stay and be all of the above.

If you were not given a shot once in your company or by your bosses, employers, customers would you be in this position today? Think about that, and help make the eco-system stronger. You have less to lose and lots to give.

If you think I can help you get connected to someone who could use your product/service, feel free to reach out.

 

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10 reasons why I spend a lot of time in the product ecosystem

As product entrepreneurs, every hour of our time is important. We run businesses that can succeed or fail depending on our choices. One of those choices is the time we spend on the eco-system.  Yet I have chosen to spend a lot of time on the ecosystem. Here is why.

1)      Learn from mistakes and successes: How much ever you say that you are doing something unique, you will be surprised to see that there is someone else doing something similar. They have made mistakes and they have had successes. Learning not to do their mistakes and learning to emulate their success is vital for your success. Learn every day.

2)      Networking  is exponential:  At first glance networking seems one to one. But if you are genuine, you would be surprised to find that networking can be exponential. Talk to someone, that person talks about you to someone else and soon its viral in a social sort of way. You never know how the stone that goes out comes back positively.

3)      Sharpen your knife for free: Get that UI feedback, or sharpen that go to market strategy. What you thought was the best based on your own thinking may turn out to be second best before you got that good opinion.

4)      Proactive helping gives joy: I find joy in sharing something to someone, which would save that person from huge mistakes or a lot of effort. Along the way if someone helps me back the same way, I will be happy, but not expect it.

5)      Winning awards is much more than being egoistical:  Your customers are looking for third party endorsements from reputed organizations. They may not ask you, but seeing one on your site gives them comfort. Win some for you and your company

6)      Collaborate to win the market: Many of us attack the same market. How often do you get an inquiry that you cannot use. Share it with someone who need it. You will get one back some day. If we organize ourselves well we can even create a market.

7)      Big brother isn’t so difficult with an ecosystem: Learn how to deal with the government. Taxes, banking, laws and much more can be handled much more easily by working with others in similar situations. It is not just learning how to handle a situation, but also acting jointly for getting something done.

8)      Mentor or be mentored: You will be surprised at the number of senior people willing to spend their time with you without expecting anything back. Years of experience, yet ready to help you with your problem. Remember to give back why you are ready to mentor too.

9)      Get Funded, find a partner, or even find a solution: The ecosystem is a magnet for all kinds of people  – investors, solution partners, suppliers and everything in between. Mingle around, be open and gain from it.

10)   Make friends along the way: The moment someone realizes that you are helping not for monetary gain, but because you just want to help, you make a friend. Business acquaintances are aplenty, but a friend is rare. I’d love to nurture them.

I’ve met many people who have inspired me along the way. Surprisingly most of the people who inspired me are not ones who speak from podiums, but people who open their hearts out with their passion. Cheers to the software product ecosystem – whatever shape or form it is!!

Guest Post Contributed by George Vettath, Kallos Solutions. Image Courtesy – NPC, Zinnov, Martecker

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Destination Vs. Distribution: Why your Product should be where your users are!

User acquisition is a prerequisite to startup success. Startups often see user acquisition as an act of sourcing traffic to a destination and converting traffic to users.

Almost every web business has a destination: a website, an app etc. The destination is often seen as the product in its entirety. Talk to a startup about their product and they will often think of it as a website or an app that the user goes to.

However, the destination is just one manifestation of the product.

DESTINATION VS. DISTRIBUTION

An internet service can be delivered to users in two broad ways. It’s often important to think through both the routes to figure out how your user will best interact with your service. The two modes are characterized as follows:

Destination: How do the users get to where the product is?

Distribution: How does the product get to where the users are?

Any service can be delivered as a combination of these two.

DESTINATIONS

What are they? 

Destinations are the online address of the product that users remember and visit.

Manifestations?

Most common forms of destinations are websites, mobile apps and downloaded software (that syncs with the cloud).

Important because…

This is the go-to place for users to interact with the product. Whenever you think of Facebook, you have a site or an app to go to to use the product.

But…

  • Destinations are not always available in the context of the users. For example, Flickr is a great photo hosting service but it wasn’t available at the point of photo capture for a long time. A user had to click a picture and then undertake another series of actions to upload the picture on to Flickr.com. In contrast, Instagram’s service could be accessed right at the time of photo capture.
  • Destinations, by definition, require users to come to where the product is and this brings with it the challenge of user acquisition.

DISTRIBUTION

What are they? 

Distribution delivers product functionalities in the context of the user making it easy for the user to interact with the product.

Manifestations?

Most common forms of distribution include widgets (Yelp), code embeds (Quora, YouTube), API provisioning , browser extensions as well as apps (especially apps that deliver you a feed from a product, for consumption).

Important because…

  • The product is available where the users are. Hence, it helps direct traffic back to the destination. Yelp used widgets very effectively to gain users by allowing users to showcase widgets on their blog. YouTube gained traction by allowing users to embed videos on their MySpace profile and directing traffic back to the destination. Flickr, similarly, gained traction by allowing users to embed pictures in their blog posts.
  • The product is available in the context of the user. This is especially true in the case of ‘curation as creation’ tools like ScoopIt. ScoopIt allows anyone to create a magazine by combining a set of links. The creator can either create the magazine by visiting the ScoopIt destination and manually adding all the links to the magazine or she can install a browser extension that plucks the web page she is visiting and adds it to the magazine. In the second case, the user never needs to leave her context to use the product. Evernote uses a similar extension. Social sharing buttons work on a similar dynamic and allow the user to share content without having to visit the actual social media destination.
  • Distribution helps engage the user and encourage repeat visits. Email updates have been used since the early days of the web to bring back users to the destination. In recent times, this tactic worked especially well for Groupon.

But…

More often than not, distribution is limited to certain functionalities. A news feed delivered to the user or a browser extension to capture a web page exhibit only a slice of the functionality that the product offers. However, that is the exact slice of functionality that is needed in the context of the user.

THE OVERLAP

Ultimately, destination and distribution are determined not by their physical manifestations (although that helps understand the difference) but by the use case.

Destination requires the user to move into the context of the product. Distribution enables the user to use the product in his active context.

While the two are different, there is an overlap between the two as well. For example, the Instagram app acts as a destination in consumption mode where a user can view photos and participate in discussions but it also fits into the context of the user (using the phone as a camera) in production mode. An offline downloaded software (e.g. Dropbox, Evernote)  that syncs with the cloud serves as a destination (user specifically opens a software and uses the product within that context) as well as distribution (the native context of the product is geared towards online usage but the offline piece fits into the user context who might not have access to the internet at that point.

As shown by these examples, the manifestations overlap but the use cases are different. Hence, it is important to think through possible use cases and identify usage contexts where a destination makes more sense than distribution or vice versa.

In summary, when planning an internet product, it is important to consider the mix of Distribution and Destination that it requires:

  1. List out the use cases. How will the user use it in production mode? How will she use it in consumption mode? It helps to separate the production and consumption modes because user contexts are very different in the two modes.
  2. Are any of the use cases best satisfied in the existing context of the user?
  3. For every action, are you making the user do extra work by coming to a destination?
  4. Can Distribution direct traffic to Destination?

Often, distribution can be the difference between a product that is convenient and engaging and a product that is difficult to use.

How have you split your product across distribution and destination? If you haven’t do you feel some distribution touch points could help improve product usage?

The post first appeared on platformed.info
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8 Perspectives on Software Vendors to Watch in 2013

SandHill’s questions on predictions as to how the software vendor landscape will change in 2013 found agreement among industry observers about the changes facing legacy software powerhouses. The questions also sparked tirades about Microsoft. Dive into their perspectives on the difficult challenges and necessary “rebooting” ahead.

Q: Which three to five software vendors will face the most dramatic change to their business in 2013?

Peter AuditorePeter Auditore, principal researcher at Asterias Research:  SAP, Oracle and Microsoft will face the greatest challenge to their business models as the disruptive SaaS and cloud vendors begin eating their installed base with new and innovative licensing models that completely change the enterprise software space.

SAP in particular is in an extremely weak position as it has been unable to bring one single SaaS or cloud product to market. Business By Design, Streamworks, Sales On Demand and Sourcing on Demand along with the massive push on sustainability have missed the mark and completely failed.

IBM and Oracle will gain tremendous competitive advantage with hardware software offerings at price performance levels other vendors can’t meet.

Paul Ressler, principal, The Cirrostratus Group:

  • Cisco, who we often don’t think of as a software vendor, will make significant product changes to address the software-controlled network business.
  • VMware will make some sort of major acquisition that will put them into the network infrastructure business, giving them the opportunity to dominate the software-controlled network space.
  • HP will try to develop a more focused enterprise software strategy. This will result in continued upheaval in their business including niche acquisitions and significant layoffs. Unfortunately it will not be clear by the end of 2013 whether this strategy will be successful.
  • BYOD (bring your own device) and increased use of mobile enterprise applications will put tremendous pressure on managing mobile security. Symantec will be well positioned to provide mobile security solutions and will provide many new offerings in this space and go through lots of growth. Other major software providers will make acquisitions in the security space to compete.

Read the complete article at Sandhill.com

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The Challenge of “Reverse Innovation”

MNC Structures can impede innovation flows….

In the mid-1970s, the Xerox Corporation faced the first real threat to its domination of the photocopying industry. This threat did not come from IBM or Kodak, the large American companies that had entered the industry. Instead it came from Canon and Ricoh, at that time relatively small Japanese companies.

Xerox had fortified the technological lead it enjoyed due to its patent-protected technology with strong customer relationships, a renowned service network, and a business model built around leasing large and fast copiers to central photocopying facilities within company locations. Realizing that they couldn’t possibly beat Xerox in head-on competition, Canon and Ricoh chose to change the rules of the game. They sold small, relatively slow copiers with limited functionality yet high reliability to individual managers within companies who were looking for options to meet their own copying needs.

Xerox was caught on the wrong foot. With a large base of machines leased out to customers, it was difficult for the company to shift to a model of outright sales. Further, within the US operations, they lacked a small copier product that could compete with what the Japanese were offering.

Ironically though, Xerox’s Japanese affiliate – Fuji Xerox, a joint venture with Fuji Photo Film – had developed small copiers of its own that were particularly suited to the Japanese market. Yet, in a typical case of one-way information flows that often seems to characterize MNCs, Xerox failed to immediately recognize or exploit the products created by Fuji Xerox to compete more effectively with Canon and Ricoh in the US market. By the time they did it was too late.

…But subsidiary initiative can at least deal with local competitive challenges

Innovation by MNC subsidiaries and affiliates has happened in the past when subsidiaries have had to be locally responsive to competitive challenges. In India, we saw the celebrated case of how Hindustan Lever launched Wheel to combat Nirma in the detergent marketplace. In the process, Hindustan Lever had to “borrow” several aspects of its business model from its local Indian competitors. But, such innovations often remained restricted to the host country market, and in the past were seen more as aberrations than an integral part of the company’s strategy.

In several MNCs, subsidiaries still struggle to get the authority to create new products for specific needs of their markets. Subsidiary leaders often have to display entrepreneurship or initiative to overcome the dominant logic that products and technologies flow from the headquarters to the subsidiary and not vice versa.

Govindarajan & Trimble argue for a new logic

In Reverse Innovation (Harvard Business Review Press, 2012), Vijay Govindarajan (VG) and Chris Trimble argue that multinationals need to change this perspective of innovation. And they go one step further – MNCs should not only encourage subsidiaries in large emerging markets to develop “lower cost + lower performance” products for their markets, but should actively create structures and processes to support such innovation.

The rationale for this is simple. Emerging markets are the growth markets of the future, but existing products and services are often not well-suited to these markets – they are over-designed, have too many unnecessary features, and are hence too expensive. If MNCs fail to develop products for emerging markets, they will not only lose out on important growth opportunities, but could potentially create well endowed competitors from these markets who could ultimately threaten them in their home markets.

Reverse Innovation contains some insightful case studies of companies like GE, P&G and Logitech that strategically created products for emerging markets, some of which have subsequently found markets in the developed world as well. The authors call this phenomenon “reverse innovation” because of this latter phenomenon. This constitutes a flow of innovation in a direction opposite to that of what we traditionally saw in MNCs (like in the Xerox story with which I started this post). And, the authors believe that this reverse flow may well be important for the developed world as they face declining growth, lower disposable incomes, and increasing ecological concerns.

The Challenges of Reverse Innovation

I have some reservations about the use of the term “reverse innovation.” It seems somewhat patronizing to the developing world. Notwithstanding this, it appears to be sticking, thanks in no small measure to the Harvard Business Review article by the authors of this book, and GE chairman Jeff Immelt.

But, more importantly, there are some fundamental issues with this phenomenon itself. The first issue is whether MNCs, whose competitive advantage comes traditionally from superior technology and features, can really compete in a price-sensitive, cost-driven market. Anecdotal evidence from the Indian market suggests that GE (the focal company of this book – one of the authors, VG, was a consultant and Professor in Residence at the company) has been struggling to make a commercial success of its reverse-innovated ECG machines and associated products because local competitors have been undercutting GE’s prices. This raises the question of whether, given their overhead structures, MNCs can ever hope to compete on cost with frugal local competitors.

 

 

 

 

This doubt is reinforced by one of the case studies in the book about a P&G sanitary napkin product specially developed for the Mexican market which suggests that this product enjoys less intellectual property protection than a typical P&G product does, presumably because it doesn’t have such a high degree of proprietary technology in it. At least in India, if it’s a competition for better adaptation and cost efficiency, I would be inclined to put my money on local companies to prevail.

Successful innovation often involves innovating on multiple dimensions. Studies by Doblin, an innovation consulting firm now owned by the Monitor Group, suggest that innovations are more likely to be successful if they incorporate innovation in at least 6 of the 10 dimensions of innovation they have identified. This suggests that MNCs will have to innovate on supply chain, distribution and a host of other business dimensions if they are to make reverse innovation work. (This is reinforced by Hindustan Lever’s success with Wheel where they did exactly that). But, it will be difficult for MNC subsidiaries to make that many changes unless they are really determined to do so. It’s tough to imagine the average GE channel partner selling high ticket price medical equipment being interested in selling low-priced scanners, and the challenge of setting up alternate distribution channels (which the authors say GE is doing) shouldn’t be underestimated.

While the authors should be congratulated for taking the bull by its horns in asking MNCs to embrace complete bottom-up product design if they want to be relevant in emerging markets, they should in my view put greater emphasis on the criticality of fundamental changes in business models that will be required for these newly designed products to be successful in these markets.

And, finally, I wonder whether Clayton Christensen’s theory of disruptive innovation (see my earlier post comparing disruptive and radical innovation) isn’t adequate to describe the nature of innovation VG and Trimble advocate. If so, the major contribution of this book is the emphasis on the changes needed in MNC structures and processes to facilitate such innovation by MNC subsidiaries in emerging markets.

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Product Conclave: Why I Love It

I really loved being there because:

  1. You meet and get to know some really cool people (Sharad, Avinash, Mukund, MR were just a few cool people I met at these events first). There is a bigger list but this will give you some idea of what I am talking about)
  2. The quality of conversations is one of the best in the industry. I have been to several conferences in US and India. This one beats them all.
  3. You get to hear some outstanding plenary sessions (Guy Kawasaki, Vinod Khosla in the past Neil Patel this year)
  4. There is a strong sense of community and a great feeling that you are among some of the smartest entrepreneurs in the country.
  5. It is a place where I love to experiment. The Unconference sessions were one such experiment. I really enjoyed them. I was thrilled to the core when some people showed up in all 4 of them. I was thrilled even more when I heard a few comment  ”we come here because we can discuss our problems”.
  6. If you volunteer for the event (hint, hint) you get to rub shoulders with some of the most dedicated and successful people who are interested in growing the product eco-system. And you get to wear a cool T-shirt that says that “I Put This Together”.
  7. Every one seems so approachable and helpful. This is something I heard over and over again from many of the participants.

I can make a bigger  list, but you get the drift.