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Will india make it – 2016? Big strides in software products

We need products, not services, to be global leaders, and the good news is Druva, Freshdesk, Capillary, Rategain, Savari and Julia are all either global leaders or the primary challengers in their respective categories.

For some months now, electronics has edged out gold, machinery and pearls to become India’s second-largest category of imports (after oil). Our aerospace and defence imports are also growing. We love buying all kinds of gizmos, big and small, from the West. Because of this, aerospace, defence and electronics imports are ticking time-bombs. Electronics alone will become double our oil imports in five years. The big policy question is whether we can develop viable domestic product companies in these sectors without resorting to protectionism. The short answer is: Yes!

The reason for this optimism is software products. In this area, we are holding our own. India’s software product industry is growing at a healthy clip. iSPIRT’s iSPIX (Indian Software Product Industry Index) grew by 26.6% on an annualised basis in 2015. And 80% of this growth has come from companies focussed on global markets. This is fuelled by companies like Druva, Freshdesk, Capillary and Rategain. Each one of them is either a global leader or the primary challenger in its respective category. There is also a long list of promising companies who are replicating the success in newer categories. Team Indus is attacking aerospace. Forus Health is changing preventative blindness testing across the world. Julia, an open-source language out of Bangalore and MIT, is reshaping how IOT will happen. Savari is already a top-3 player worldwide in self-driving cars. All these are new names for most people. In the glare of the Bollywood-ish publicity of our e-commerce companies, we are missing the real revolution.

Yes, like any nascent revolution, this is fragile. In fact, we recently dodged a bullet. In the run-up to prime minister Narendra Modi’s recent US trip, the Indian Patent Office hurriedly issued guidelines on computer-related inventions. Undoubtedly, they were made under pressure from some American MNCs, without realising that they were a death knell for the domestic software product industry. Luckily, good sense prevailed and 115 days later, on December 14, these guidelines were rescinded.

This near-death experience has had a positive fallout. It precipitated a coming together of minds within the government on having a proper policy for software products. As a result, a National Policy for Software Products is on the cards and should be out in a couple of months. It represents a new paradigm of policy making. For starters, it has no sops! Instead, it takes an integrative view of changes that are needed to create an enabling environment. It eliminates FERA-era norms that prevent Indian product companies from going global. It introduces missing concepts in our policy lexicon. For instance, our tax code doesn’t even have a definition for digital goods, and this, as you can imagine, results in misery for software product companies. It also tackles our archaic R&D credit system that harks back to the pre-liberalisation era and favours only large profitable companies. It is a bold policy effort that eschews tax-breaks, big budget outlays and protectionism for creating a modern policy environment for our software product companies.

Indian software products matter. This sector is the opening batsman for a new innings for India. If it runs up a good score, as it is likely it will, it will set the stage for aerospace,defence and electronics products. If India remains bereft of SPADE (i.e. Software Products, Aerospace, Defence and Electronics) product companies, it won’t be a sustainable economy in the future. Keep in mind that Microsoft generates more profit than the profits of the top-20 pure-play global IT services firms. Boeing and Airbus alone generate almost as much profit as all global airlines put together. Cisco’s profits are more than those of all European mobile operators. And Pfizer’s profits, even before its recent acquisition of Allergen, are more than the profits of top 100 hospitals in US. The value nowadays lies in products, not services.

We know how to build the world’s best hospital, airline or IT services company. But no matter how well-run Indigo Airlines is, it will 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 and Juniper do. And TCS will never be a Microsoft. Acknowledging this plain reality is the first step that we must take. Building a world-class product company needs a different mindset. You have to go all-in and bet-the-company on a market or technology shift that is underway. This mindset is new to us in India. We must nurture it so that it becomes a new strength for the country.

The stakes are high, but there is reason to be optimistic. A few smart and light-touch policy moves (in the works) can make India a global software products powerhouse. It is the first step to becoming a product-nation!

By Sharad Sharma  and Vishnu Dusad, MD, Nucleus Software

 

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Nominations are open for MINT MIT Innovators Under 35

If you have been reading Mint lately (and most people who read Product Nation do), you must have come across the Mint/MIT search for the Top 10 Innovators under 35. Organised by Mint in association with the Massachusetts Institute of Technology, the India edition will shortlist India’s top 10 innovators in the technology space to compete for the global awards. This is a prime opportunity for our product people to stake a claim on what will undoubtedly be a very prestigious list.
Mint35Mint has been working silently by helping good startups coming out of our country with some good coverage and quality business journalism, and this is another bit of proof about their involvement with the ecosystem we are trying to build and foster. iSPIRT is also onboard this initiative as a think tank partner. The panel which will select the final ten will include Amit Phadnis, Brian Bergstein, R Sukumar, Raghav Narsalay, Rajesh Janey, Prof. Amitabha Chattopadhyay, Ravi Narayan and Deepti Doshi. They will select a shortlist of 10 individuals from among the people who apply or are nominated, and the shortlisted innovators will present at EmTech India on 18th and 19th March in New Delhi.

Anyone who is under the age of 35 as on 1st October 2016 and has a brilliant idea on technological innovation and applied research is eligible, and can be nominated by others. 

EmTech India will be a multidisciplinary innovation conference with a focus on technology and applied science, and there will soon be an announcement of the line up of speakers, with which Mint is being very secretive. You would be right in expecting some surprises on this front.

Do submit your nomination at emtech.livemint.com, where you’ll find more information on the event and the selection process. If you don’t know who to nominate or are too shy to apply, share this immediately with your friends and colleagues so that at least they might do so. Maybe they’ll nominate you, and save you some embarrassment. Good luck!

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Disruptive Blue Oceans and India to the world!

In this article, we brief on what the architect of disruptive innovation Clayton Christensen explained in his seminal work called disruptive theory. This contains the edited excerpts of ‘What is disruptive innovation’ article published in Harvard Business Review. We also considered the tools, frameworks and concepts from Blue Ocean Strategy developed by W. Chan Kim and Renee Mauborgne, as we feel that the Indian companies adopt the essence of both the Disruptive Innovation and Blue Ocean Strategy ideas.

Clayton clarifies Disruption is a process where by a smaller company with fewer resources is able to successfully challenge established incumbent businesses. Specifically, as incumbents focus on improving their product and services for the most demanding customers, new entrants prove disruptive by successfully targeting those overlooked segments and by delivering more suitable functionality frequently at lower price. And any product or service to be considered as disruptive innovation must actually fit into the two important criteria below.

  1. Low-end footholds
  2. New market footholds

Low-end footholds

Value-InnovationLow-end footholds exist; when an established or large organization focuses only on the prime customers or most profitable customers and overlook their needs and fail to fulfil the needs of the least profitable or low-end customers. New entrants seize the white space by servicing to these low-end segments with ‘good enough’ product. The performances of the new entrants are ever improving when compared to those established incumbents. However, the quality of their offerings increases over the period of time. New entrants create unprecedented value to the customers by adopting Value Innovation. Value Innovation is created in the region where a company’s actions favourably affect both its cost structure and its value proposition to buyers.

 

Cost savings are made by eliminating and reducing the factors industry competes on and buyer value is lifted by raising and creating the elements industry has never offered. Kim and Mauborgne call it ‘4 Action Framework’ in their book titled ‘Blue Ocean Strategy, 2005.’

3nethra capturing Low-end segments through Value Innovation in India.

3nethra, eye pre-screening device, a product of Forus Healthcare, has made a significant impact in the eye care industry, in private clinics as well as in large eye hospitals. A significant contribution of 3nethra to eye care is the fast screening made possible by this device. Quick, yet accurate, screening translates into shorter waiting periods for patients. In a domino effect, quick screening also means that the eye doctor can devote more time to patients that need immediate attention. The simplicity of usage of 3nethra results in minimal training to operate the device. While, most eye pre screening devices cost between Rs 18 and 20 lakh, 3nethra costs just about Rs 5 lakh. 3nethra is also being used in community healthcare services and CSR initiatives. Forus, has conducted over 100 eye check-up camps all over India and screened over 2,50,000 people so far. Additionally, 3nethra can be installed in kiosks in places with high footfalls like airports, railway stations and even malls, where one can walk in and get fast, affordable and accurate screening for common eye diseases for their entire family.

new value curve

New market footholds

In new-market footholds, disruptors get into the uncontested market place and make the competition irrelevant. They find ways to convert non-customers to customer. In Blue Ocean Strategy, Kim and Mauborgne delineate as ‘the three tiers of non customers’ who can be transformed into customers.

First Tier: ‘Soon to be’ noncustomers who are on the edge of your market. They minimally use current market offerings to get by as they search for something better. Upon finding better alternative they will jump ship.

Second Tier: ‘Refusing’ noncustomers who consciously choose against your market because they find the offerings unacceptable or beyond their means.

Third Tier: ‘Unexplored’ noncustomers who are in markets distant from yours. They are the ones who have not been targeted or thought as potential customers by any existing incumbents.

Harboring these noncustomers is an ocean of untapped demand waiting to be released.

Paytm transforming noncustomers to customers

marketDigital wallet and mobile commerce marketplace Paytm is creating huge market by enabling more than 80,000 merchants to do the transactions on its platform. Paytm is an Indian e-commerce shopping website launched in 2010, owned by One97 Communications which initially focused on Mobile and DTH Recharging. The company is headquartered in Noida, India. It gradually provided recharging and bill payment of various portals including electricity bills, gas bills, as well as telephone bills. Paytm entered India’s e-commerce market in 2014, providing facilities and products similar to businesses such as Flipkart, Amazon.com, Snapdeal. In 2015, it added booking bus travel. In July 2015, it included industrial supplies such as power tools, safety and security equipment, test & measurement apparatuses, machines, lab supplies, abrasives etc on its platform. Paytm states that the initiative will help SMEs get in touch with different suppliers for different needs. Currently, it claims to have crossed over 100 million users in the country in a very short span. It also declares that more than 75 million transactions are made through their platform. In 2014, the company launched Paytm Wallet, India’s largest mobile payment service platform with over 40 million wallets. The service became the preferred mode of payment across leading consumer internet companies such as Uber, BookMyShow, MakeMyTrip and many more.

Bibliography

  1. What is disruptive innovation by Clayton Christensen, http://hbr.org/2015/12/what-is-disruptive-innovation
  2. Book titled Blue Ocean Strategy, 2005, by W Chan Kim and Renee Mauborgne
  3. Forushealth.com, http://forushealth.com/forus/Implementation.html

Paytm, https://en.wikipedia.org/wiki/Paytm

This writeup is complied and created by R Ragavendra Prasath; volunteer for iSPIRT.

Disclaimer

Disruptive Innovation and Blue Ocean strategy are two distinctive thinking by itself and broad as it is deep. Adopted these thinking together for learning and understanding purposes only.

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Dymystifying Valuations & Investors – an opinion from an entrepreneur!

Valuations often have seemed to be a “Black Art”, but they seem to be crucial in determining your strategy for outside investment!

Are they really? How is the early stage entrepreneur going to decide what is reasonable?

Some other questions that routinely come up in the mind of entrepreneurs:

1. How does the process of creating value effect me, my co-founders, my team & investors?
2. How do I maximize value for everyone?
3. How do I get the best valuation in case of an exit?

Entrepreneurs need to understand how money works and see the world from the investors world.

One of the area VCs in the US once described to me this scene sometime back, just after their firm had decided to invest in the start-up:

“There was a lot of interest in this company, and the founders had a fair amount of leverage. They used every ounce of it to extract a higher valuation,” he said. We kept saying that our firm would bring a lot more to the table than money, and that the mentoring, strategic advice, network resources, and political capital we could offer were almost unmatched.”

“The founders however set all that aside and made it about the money. It left a bad taste in our mouth. The deal was still worth doing—barely. But we have less of an equity stake in the company than we would ordinarily want, and given all the other portfolio companies that need my attention, I don’t feel any obligation or desire to give these guys additional assistance.”

The point is that the founders undervalued the non monetary value resources the VC firm had to offer, or they assumed that mentoring and strategic support would inevitably be available from the firm. Given that the negotiation for money and term-sheets is a high stakes exercise with various emotions and personalities
present in the mix, one should not forget that the document at the end lays out how much equity and control a VC will have in return for its cash is all about assigning rights, carving out protections, and haggling over claims to future returns.

So these negotiations are fundamentally about picking the right long-term partner and forging a relationship that can survive the inevitable disappointments, resolve the unforeseen conflicts, and monetize the mutually earned successes to come.

Now as a management consultant, I have tried to put these dynamics into some of the mistakes and solutions of how to avoid them in this blog.

At the end of the day, term sheets can be difficult to understand, and you may need help determining what the various provisions—liquidation preference, anti-dilution protection, pay to play, drag along rights, vesting schedules, no-shop clauses, and so on—imply for your current and future rights and obligations. At the very least, you should contact other companies in the VC firm’s portfolio to find out what was negotiable, why they made the choices they did, and what terms were the most consequential in the months and years after the deal.

So try to check out various VCs and see who you can work with, who has done investments in your space (target market you address) and what it has been for others to work with them.

“Remember you are looking for a partner for the long term and people who you work with will matter in terms of bringing value to your startup especially

the non monetary type!”

So here are some things to consider –

Understand your leverage

One of the thing is the more alternatives you have which means number of other VCs who are interested in your startup, it gives your more leverage. Try to use this to fight for the terms that are important for you. Sometimes one common problem is running out of cash since its hard to forecast the burn rate, and too little willingness to give up equity. As a result, you may fail to take in enough money during early rounds of funding. So look for someone who is willing to fund subsequent rounds or offer bridge loans without significant dilution of founder equity. Its better to negotiate this during the first round of financing when you have numerous alternatives and could command a better price. Many founders have discovered that doing a slightly bigger first round than seems necessary—or perhaps negotiating an acceptable formula for future bridge loans at the outset—can pay off in the
long run: It’s bad when you have few options, but considerably worse when you are running out of options and out of money!

Its okay to look at the long-term goals of the VC partner and take the time to understand what the other side cares about and hope for from their investment which includes accepting money in installments tied to milestones with no dilution in equity.

“So don’t just focus only on your own options.

Understanding the other party’s interests can give you leverage”.

Strive to maximize thrust for win-win situation

Imagine you are the verge of closing a big financing round at the end of the month. When you pitched
last month, the business was gaining momentum and you are on target for all your financial projections. Since then, a major customer deal you were counting on falls apart, and a key employee is on the verge of leaving. Question would be if you would have any legal obligation to reveal this situation, probably not, but imagine you picked up the phone and revealed it. Maybe you think they may re-negotiate the terms of the deal. But most often than not, VCs would reward you for your honesty since they would like to put a premium on your trust! They would value your upfront gesture of delivering bad news as you would deliver good news to them!

Another thing would be around terms, to comparison shop, and to use whatever leverage you have to renegotiate the deal. Its all okay as VCs expect you to ask for better terms, but not after you have given your word on an agreement. The VC world is small and they all keep cross checking on each others deal flows all the time.

“In VC relationships, as in any long-term partnership,

It’s much easier to build  trust than to rebuild it.”

Focus on value and not valuations

If you’re selling your house, for instance, you might not even meet the buyers, and despite issues such as inspections, financing contingencies, and the closing date, the selling price is far and away the top priority. In this case focusing on a single, top-line number sometimes makes sense!

But in case of accepting someone’s money at a startup, the signed contract is the beginning of the relationship, so its a mistake to focus too narrowly on price and not enough on drivers of long-term value. Its like when negotiating a job offer, for example, people tend to obsess over the starting compensation, but factors such as geography, responsibilities, prospects for learning and advancement, and even length of commute can have a greater impact on their enduring happiness and success.

More than one VC has identified this shortsighted emphasis as founders’ biggest mistake.

“Entrepreneurs focus too much on valuation and not enough on control,” one VC told me. “It’s amazing how much control founders are willing to sacrifice in order to obtain a $4 million valuation instead of $3.5 million. These numbers don’t matter much in the long run, but the impact of diminished control can last forever.” The tendency is especially remarkable when you consider the passion most founders have for what they are trying to create, for their company’s mission, and for their vision of its future. Once founders have sacrificed board control or ceded voting rights on too broad a category of decisions, those decisions are, of course, technically out of their hands. Most VCs are very reluctant to use their control rights to contravene the wishes and objectives of management, but if conflict or a breakdown in trust between management and the board occurs, founders may find themselves severely constrained, if not replaced.None of this means you should ignore valuation—it’s an important consideration. But it’s a mistake to confuse it with value, given that most founders also care a lot about factors such as their role, prestige, self-identity, and autonomy.

“To maximize valuation without regard for non-financial considerations

is to sign something of a Faustian bargain.”

Strive for Understanding not Conflict

Even when control is not the concern, you ought to pay close attention to terms other than valuation; there are additional provisions that can have a huge impact on how much money you’ll eventually see. And if you look at them carefully, the terms a VC firm proposes can help you understand its unspoken concerns and assessments of your start-up’s future.

Well as in any relationship you need to look well beyond the contract and far beyond today. The lessons offered above are targeted toward those who are striving to create strong partnerships with VCs—but they are relevant for anyone negotiating in a world where a signed contract is not the end but merely the beginning.

So folks go develop products & solutions and please don’t forget to connect your wares to a customer persona and a pain-point they may have to resolve and rest will follow!

I will do more posts on understanding terms like liquidation preference vs. participation for example in term-sheets from the perspective of an entrepreneur.

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Software Patents FAQs for Indian Startups

A couple of months ago, you might have noticed press reports where iSPIRT took a strong stance against software patents in India. The global experience with software patents has been that it leads to increased patent litigation, and uncertainty for startups. Thanks to some enlightened policy making, India has been relatively free of the kind of software patent lawsuits that we see in the US, and we would like to keep it that way.

At the same time, we cannot wish away the fact that software patents are a reality in countries like the US, and every company needs to have a software patents strategy in place. We therefore set out to understand the most frequently asked questions (FAQs) and answer them. In talking to various stakeholders, we found that even veteran entrepreneurs would often confuse copyrights and software patents. We also found that there is very little awareness of what software patents actually are. Therefore, we curated a set of FAQs and answered them in very simple layman terms. Our goal is that even entrepreneurs who are beginning their startup journey should be able to get an understanding of this topic. Even if you are a veteran in the IT industry, these FAQs might help you avoid some common misconceptions.

We therefore invite all entrepreneurs to put this one their, “Must Read” lists. We also invite you to submit your questions and feedback to these FAQs. We view this document as a first step in understanding this topic, and look forward to your feedback to make this FAQ more useful to you.

Venkatesh Hariharan, Samuel Mani and Mishi Chowdhary
Software Patents Expert Team

Software Patents FAQs for Indian Startups

Executive Summary

As India’s product startup ecosystem grows and becomes global, the issue of software patents becomes increasingly important. Most startups work extremely hard to grow their marketshare, but do not realize the importance of a software patents strategy for protecting their interests. This document answers some of the most common questions that startups have around software patents. It outlines the importance of a software patents strategy, clarifies some of the common misconceptions around software patents, and proposes a software patents strategy for Indian startups to consider.

Note: This set of FAQs includes information about legal issues and legal developments. These are for informational purposes only. These are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact a lawyer for advice on specific legal issues. We don’t accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained in these materials.This document is intended for startup founders and executives. It aims to be a starting point for discussions around software patents, and not the last word on this subject.

1. Why do I need a software patents strategy?

Every IT company, and especially one that aims to go global, has to have a software patents strategy in place. This is one area where the old saying, “A stitch in time saves nine,” holds true. A proactive strategy can help many software startups improve their valuations and prevent a lot of grief. Some Venture Capitalists (VCs) tend to assign a higher valuation to startups that have software patents, though this depends from VC to VC.

Patents can also help startups from a defensive perspective. When a startup is flying under the radar, software patents might not be much of an issue. However, when a startup grows big, starts hitting the headlines, or goes global,[1] that is the time when the risk of patent litigation shoots up. Apart from being an expensive business, patent litigation can create a cloud of uncertainity over your business, and potentially scare away clients.[2] Startups that plan to take their products and services to markets like the US, that allow software patents, should be especially careful about software patents.

2. What is a patent?

A patent is a state granted monopoly to an inventor, in return for disclosure of the details of the invention. This monopoly is granted for a limited period of time. The classical test of whether something is an invention or not is novelty, usefulness, and non-obviousness. The word patent originates from the Latin word, patere, which means “to lay open” (i.e., to make available for public inspection).

3. India does not allow software patents. Therefore, why should I be worried?

Section 3 of the Indian Patent Act deals with things that are not considered to be inventions within the meaning of this Act. Section 3(k) of the act says that, “A mathematical or business method or a computer programme per se or algorithms are not patentable.” However, the definition of “per se “ has proven to be controversial. The recent guidelines from the Indian Patent Office on Computer Related Inventions would have the effect of making software a patentable subject matter, as long as it has technical effects. Many, including, iSPIRT have argued that this is against the will of the Indian Parliament, which had rejected a move to grant patents on technical effects of software.

Despite the controversy over how “software per se” should be defined, the number of patent applications that are being filed at the the Indian Patent Office is multiplying, and there is a sharp surge in the number of patents granted by the Indian Patent Office every year. A large number of these patent applications cover software in some form or the other. The legal validity of such patent grants is in question, but if these patent owners begin suing for infringment, it can cast a cloud of uncertainity over startups.

Startups that aim to go global will have to have a software patent strategy in place, when they enter markets like the US, where software patents are granted. This is because software patent litigation is an expensive business and a defensive mechanism needs to be in place. It would be advisable for such startups to hire a patent lawyer and check if they might be infringing on any software patents. If they are indeed infringing, they might have to either obtain a licence to use those patents or rewite their code, to ensure they are not infringing.

If your startup has an app (or builds apps for others), it has to be kept in mind that the jurisdiction of the app store is the US, since the major app stores are owned by companies based in the US[3].

Therefore, being proactive, and putting a software patent strategy in place, will help your organization in the long run.

4. If I cannot use patents to protect my software, how else can I protect it?

Software is algorithms for computers in human readable terms. Software can be protected through copyrights and trade secrets. Trade secrets offer certain advantages over software patents.

  1. Patent protection does not cover “abstract ideas” whereas trade secret protection can. Trade secret protection can cover almost any information (including code) which is secret and which provides an economic advantage over others.
  2. Patent protection is for a limited period of time (depending upon jurisdiction) but trade secret protection is available indefinitely.
  3. Patent protection is expensive and time consuming to obtain. In India, trade secret protection can be obtained simply by way of confidentiality and non-disclosure agreements. It is quicker and cheaper.

5. What is the harm if we also use patents, in addition to copyrights and trade secrets to protect software?

Protecting software with patents add another layer that complicates the lives of software developers. Under copyright law, if software developers write code that is similar to that of another, they can defend themselves on the grounds of independent invention because copyright protects the expression of an idea. However, the same defense is not possible under a software patent regime because a patent is a monopoly on the idea itself. Thus, even if software developers independently create a program, they may be liable for infringement, in countries that allow for software patenting.

Even end-users who use software for routine, everyday activities may be liable for infringement. For example, in the US, which has the most permissive software patenting regime, McDonalds and 400 other entities were served notices for violating DataCard’s patent on “Method for processing debit purchase transactions using a counter-top terminal system.” In another case, a company called Beneficial Innovations, sued the New York Times, You Tube and many other media organizations for allegedly violating its patent on “Method and system for playing games on a network.” Therefore the problem of software patents is not one that is confined to the software development industry alone and ends up increasing the cost of software for society as a whole.

6. What are the defensive strategies that I can adopt?

You could join a patent non-agression network like the Open Invention Network (OIN), which is the largest patent non-agression community with 1,700 members as on August 2015. Membership to OIN is free, and members have to agree that they will not sue other members of OIN around the Linux System, a list of 2,300 packages of core infrastructure technology in Linux and open source. Members also get a royalty free license to 1000 software patents owned by OIN, worth around $90 million. OIN was formed to protect Linux and Open Source users from patent litigation.

Startups that are not in the business of licensing patents to others should consider filing defensive patents. This can be an expensive business costing around $15,000 per patent (Rs 9.45 lakhs approximately).

Startups that have a unique idea, but do not want to go to the expense of filing a patent can consider submitting their ideas to www.defensivepublications.org that will review ideas and take care of patenting selected ideas. Defensive publications, which are endorsed by the US Patents and Trademarks Office (USPTO) as an Intellectual Property Rights management tool, are documents that provide descriptions and artwork of a product, device or method so that it enters the public domain and becomes prior art. This powerful preemptive disclosure prevents other parties from obtaining a patent on the product, device or method. It enables the original inventor to ensure that they have access to their invention by preventing others from later making patent claims on it. It also means that they do not have to shoulder the cost of patent applications.

7. What are the different forms of IP and can you offer a comparison between them?

Different forms of IP1Different-Forms of IP2Different Forms of IP3Different forms of IP4

 

8. How are patents granted? Do the norms vary from country to country?

The procedure for granting patents, the requirements placed on the patentee, and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a granted patent application must include one or more claims that define the invention. A patent may include many claims, each of which defines a specific property right. These claims must meet relevantpatentability requirements, such as novelty, usefulness, and non-obviousness. The exclusive right granted to a patentee in most countries is the right to prevent others, or at least to try to prevent others, from commercially making, using, selling, importing, or distributing a patented invention without permission.


9. If patents are granted by a sovereign state, does it mean that I have to file for the same patent in multiple geographies?

The procedure for granting patents, the requirements placed on the patentee, and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a granted patent application must include one or more claims that define the invention. A patent may include many claims, each of which defines a specific property right. These claims must meet relevantpatentability requirements, such as novelty, usefulness, and non-obviousness. The exclusive right granted to a patentee in most countries is the right to prevent others, or at least to try to prevent others, from commercially making, using, selling, importing, or distributing a patented invention without permission.

Under the World Trade Organization‘s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights, patents should be available in WTO member states for any invention, in all fields of technology,]and the term of protection available should be a minimum of twenty years. Nevertheless, there are variations on what is patentable subject matter from country to country. New Zealand, for instance, has taken a stance that software is not an invention and therefore, does not grant software patents.

10. What are patent trolls or Non Practicing Entities (NPEs)?

Patent trolls or Non Practicing Entities (NPEs) are organizations that exist solely for suing as a rent seeking or economic activity. Patent trolls usually strike when a startup is being acquired, is going public, or it announces the acquisition of large clients.

11. How difficult is it to file for a software patent, in jurisdictions that allow it?

Filing patents is a tedious process. Each step in the process of patent grant including filing, examination and closure is an expensive one. Companies with limited resources should in fact, give very careful consideration to a decision to file for patents. Many companies including huge market players file patents as a defensive measure rather than an offensive one. Therefore, it is important to focus on only high quality patents because only those provide a reliable and secure defensive cover. If a company has decided to invest huge sums of money in patenting activity, it would be prudent to have one good quality patent (for instance) rather than several patents of questionable merit and quality. What constitutes a good quality patent is dependent on the specific facts.

It is important to remember that patents are granted on a country by country basis and its prosecution is also on a country by country basis. Not all countries consider software a patentable subject matter. While patent applicants may file applications in various countries (which are signatories of the Patent Cooperation Treaty) with an advantage of the same priority date (i.e. the date on which the application was first filed in any country), a PCT application is helpful only to the extent of locking in on priority date. It does not however, ensure smooth patent grant procedures in all jurisdictions and the same is subject to local laws relating to patentable subject matter and examination rules. Several patent applications lose out in the examination stage in jurisdictions which have strict examination procedures and a tighter filtering mechanism for quality.

Given the above, there are obvious disadvantages to disclosure of technology a company may have spent a great deal of money and resources creating/developing. First of all, it makes otherwise confidential information public and makes the company more vulnerable to patent infringement suits. Secondly, it exposes the company’s business strategy or core technology asset to be accessed by entities in other jurisdictions who may have easy access to a patent in their country. There is no telling who may actually become privy to the company’s valuable technology assets and the company would not even be in the know if a potential competitor in a different country may use it to its advantage, especially in countries where software is not patentable. A lot of time, resources and money may therefore get wasted on waiting for a patent grant which may be well spent on actual innovation by the company.

Many high-tech companies, especially in the software product space, use trade secrets to protect their truly innovative and valuable assets (including business strategy forming the ‘secret sauce’ of their business, so to speak) because it is considered a much more effective mechanism to protect their IP without giving away or disclosing any part of their confidential information. Trade secret protection is much less complicated, much more economical and also quite effective in protecting a company’s IP assets compared to the complicated, tenuous and confounding patenting system. While there are specific trade secret laws in the US, in India we have to rely on implicit protections under the Contract Act.

[1]               See “How Life360 won its patent war,” at http://arstechnica.com/tech-policy/2015/03/how-life360-won-its-patent-war/

[2]                For an example see http://www.feld.com/archives/2012/08/a-software-entrepreneur-on-the-madness-of-software-patents-and-trolls.html

[3]               “More app developers sued over patent claims,” at http://www.theguardian.com/technology/2011/may/18/app-developers-sued-over-patent-claims

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India is a closed source community or am I missing something here?

Open source software has been a constant buzz among few of the iSPIRT volunteers over last few months. How does India rate on OSS contribution? Does OSS seriously matter in the success of a software / software services business? Is it important enough to build an OSS ecosystem for the India based startups?

My own perception has been that the OSS engagement in India is low and as a result the contribution is low. I have often wondered why has not a single Indian OSS product featured in the top 50 global lists. Why India has not given an OSS product, foundation or a community like the LINUX, Apache, Mozilla or Hadoop. Why has no Indian voluntary OSS community ever achieved critical mass? Why even there are no OSS services companies of the likes of Cloudera or Hortonworks from the mecca of IT services companies?

There were many other questions and I am sure you the reader also have some questions, assumptions and answers to share. So I talked to few leading OSS lights around besides doing a quick research at LinkedIn. I am sharing some insights and findings in this post with more to follow in the next post soon. I might be way off the mark here, so please have patience and share your views.

Some market stats

Global OSS acceptance by end-users has grown at a healthy pace. Blackduck’s 2015 Future of Open Source survey reports 78% of the respondents’ companies ran operations partly or completely on open source. As per the report, in 2-3 years, 88% of the companies are expected to increase their OSS contribution.

RedHat (Linux) has been the lone poster boy of OSS industry for a long time. Today it has revenues touching USD 2 billion and a market valuation of USD 14.5 billion. OSS has gained VC interest as reflected in growing VC funding in OSS space and rising valuations of OSS companies. Tracing back fifteen years, gross VC funding in OSS companies works out to roughly USD 7.5 billion; averaging USD 750 million annually in recent years. Recent OSS successes include (figures are revenues / valuation / funding raised) –

Cloudera (Hadoop):  $200M / $5B / $100 M

MongoDB:                  N.A. / $1.6B / $311M

Hortonworks:             $60M / $1.1B / N.A.

Global market size of OSS based products is estimated at about USD 50 billion. Though it seems improbable OSS market will any time soon reach the size of proprietary software (USD 50 billion vs. USD 320 billion in 2015), its double-digit growth rate (compared to 3%-5% for proprietary software) presents an attractive opportunity to tap into.

What does it all means for India and Indian OSS companies?

India and OSS

Gartner estimates that by 2017, about 90 per cent of Indian IT organizations will have open source software (OSS) embedded in their mission critical platforms. The user companies hope to lower TCO and increase ROI with OSS use. The industries with significant OSS adoption include education, banking, financial services and insurance and government. Education is the leader here – majority of public and private educational institutions using OSS for library automation, and several research organizations applying it to drug discovery space. Indian small or mid-size businesses use OSS as client facing service portals. The large IT companies such as Wipro, Infosys and Tech Mahindra are already using OSS to test software for clients.

The majority of Indian government offices are directing new initiatives that involve use of open-source software and solutions. Some of the prominent government initiatives include NRCFOSS (by DEITy), FOSSEE (at IIT Mumbai), BOSS (at CDAC) and whole lot of state government initiatives.

OSS contributors – Indian companies

As anywhere in the world, OSS engagement in India happens in two ways – (Paid) Employees at software product and services companies and IT employees in plethora of other businesses contribute OSS code either as their own product or to existing OSS projects like Linux, Hadoop etc. I am not including OSS contributions from the likes of IBMs in this study.

A lot of this contribution happens on repositories and forges like GitHub and Source Forge. It is heartening to note that registered users and projects from India on these destinations are steadily growing. For example InMobi contributed OSS code to Hadoop project and Flipkart has opened source of few of its projects including a more popular project phantom. In last couple of years, largest Indian OSS contributions (though tiny by global standards) came from ShepHertz, Hasgeek, Practo and Freshdesk. Code for India is another large volunteer based tech community that develops OSS solutions for Elections, City Governance, Women Safety, Education etc.

Overall, contribution from India is tiny compared to the top contributors across the globe and does not generate healthy interest from OSS communities around the globe. For example, the most popular Indian origin repository on GitHub has 232 stars placing it at rank 5376 on a list of 219,071 JavaScript projects.

Is it a good achievement? Can it be bettered? If yes how?

OSS – individual contributors

Then, a lot of individuals contribute to OSS project outside of their day-jobs. This is unpaid voluntary contribution driven by individual passion. Some leading lights in this category include – Hackerearth developer Sayan Chowdhury who is on Mozilla’s roster for contributions to Mozilla Kuma and Rust projects, Eucalyptus Systems’ Kushal Das who was nominated to Director of Python Software Foundation, Anand Chithipotu with big contribution to web.py, and Siddhesh Payarekar (Glibe). More recently, two developers getting into limelight are – Prakhar Shrivastav (102 repositories on Github with some having 1000 – 12000 stars), Karan Goel (113 repositories on Github with several having 500 – 8000 stars).

FOSS activities in India

FOSS related activities are mushrooming in India. For example, there are more than 150 Linux User Groups. Annual FOSS events on campuses and outside like OSI Days are growing. There is greater Indian participation in global FOSS events like Google Summer of Code, Code Jam, etc.

What drives low OSS contribution from India?

I asked a few OSS contributors around, Range of answers I got fell into three buckets – individual behaviors, employer policy and process, ecosystem issues.

Individual behaviors: Maslow’s hierarchy of needs seems to at play here. The respondents were unequivocal that Indian programmers write code for a living not for passion. “We focus on daily work and do not enjoy programming as a hobby.” Other factors that came out were – fear of being judged and ridiculed, poor communication skills resulting in lack of confidence and plain ignorance of OSS – What is Open Source? Can I even contribute? What are the legal issues?

Employer policy and processes: Other set of issues related to the employers. I found that programmers were motivated to contribute but the employer either did not encourage OSS contributions or were just confused about OSS policy and process. One respondent told us – “We would like to promote OSS contribution but we are hindered by the lack of a sophisticated OSS policy (as community participation requires a set of standard guidelines throughout the company).”

Another respondent told us – “We do it more on an adhoc basis and usually during low activity periods (which are rare).” An OSS evangelist reported – “I think developers are enthusiastic about it but the companies and managers do not focus on it. If they give enough time for developers to do OSS (initially it needs extra efforts and time but slowly developing like that becomes a habit), it should improve. “

Finally, it appears that IT services companies do not encourage open source contributions and elsewhere there was focus on exploiting OSS code rather than contributing back.

Ecosystem issues

The third major bucket of issues can be aptly labelled eco-system issues. These include educational and legal.

A common feedback across respondents was – “If India, like developed economies, too has strong IP Law and enforcement, we would see many software producers and consumers shift to OSS paradigm.” A feeling prevalent was that others consume OSS without giving credit and the law either does not protect of the legal process is lengthy and expensive.

Another important feedback was – lack of awareness of OSS licenses led to indecisiveness about OSS contribution even when the intention was all there.

A comment on the Government of India’s OSS policy said – “the policy is great but implementation leaves lot to be desired.”

Folks, I ask you if these issues sync with you. Please write back to take this conversation forward.

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Indian Regulators: Let start-up founders and investors worry about Silicon Valley; you try and deliver Delaware. Please.

Indian regulators have, in recent times, been talking a lot about creating a conducive environment for businesses, specifically startups, given the recent exodus of some renowned startups to foreign shores to take advantage of friendlier business policies and regulations.

In order to create a thriving ecosystem, they are taking inspiration from places like Silicon Valley, considered globally to be the Mecca of technology entrepreneurship. I am often asked by budding Indian entrepreneurs and even the successful ones –will Indian regulators be able to give the Indian startups an ecosystem similar to what Silicon Valley has provided?

My answer to this oft-asked question is – Why just look at Silicon Valley when there’s so much more that the Delaware framework can teach us? And trust me, they often get confused.

It is Delaware where most businesses are registered in the US and not Silicon Valley. Reason: the flexible governance framework that allows for ease of doing business, which is all the more crucial for startups.

The first and foremost reason behind this is that the Delaware General Corporation Law, by design, is a simple yet dynamic one. Although it was written in the last decade of the 19th century, it has been constantly fine-tuned since then to suit the ever-changing business environment. Moreover, it has managed to strike the perfect balance by treating both, regulators and business entities at par, with no bias towards either, which is rare to see in other countries. Even the statute permits companies and their shareholders to work with maximum flexibility to ensure they work smoothly.

Then there’s the Delaware legislature that not only gives high priority to corporation law but also has a good expertise over these matters. The state legislature also has an understanding with the bar and it is clear that when proposing corporate legislation, the bar will deal candidly on any matter that involves Corporation Law.

Lawyers too, swear by their courts. The Court of Chancery has developed an exemplary expertise over matters related to Corporation Law. Not only do you see some of the best lawyers practicing in Delaware, you will be pleasantly surprised to see how familiar the judges are with complex business transactions and the kind of insights they have about the inner workings of corporations. Since the court has already dealt with cases that cover almost all aspects of businesses, it more or less has answers to most questions that haunt businesses. This offers them a greater sense of security.

Another feather in the cap is the ultra-modern, user-friendly and absolutely pro-business Delaware Secretary of State Office, which facilitates businesses in the true sense rather than following a bureaucratic approach.

It is difficult to find any other ecosystem that has so much to offer to startups or even half of what Delaware offers. The kind of philosophy, processes and above all, mindset to run businesses there is enviable for even Silicon Valley. If a similar framework can be replicated in India, there will be no looking back for the dreamers in India who are trying to take baby steps in the world of business.

What are your thoughts?

Guest Post contributed by Ravi Kiran.

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How “born globals” dance with gorillas to punch above their weight

For over a decade now I have been studying “born globals” i.e. new ventures that internationalize rapidly, and in particular how these firms leverage relationships with large multinationals to facilitate this process. My studies on this topic span China, India, UK and USA.

I recently published a book targeted at other academics, based on this research, titled Born Globals, Networks and the Large Multinational Enterprise, which was released during the Academy of International Business conference in Bangalore.


The insights for entrepreneurs from this research include the following:

Be proactive in recognizing the opportunity to harness globalization. More than at any point in history, multinationals are genuinely interested to engage with start-ups. It wasn’t always like this. When I started my research in 2002 I could barely find any multinational with a structured partnering program targeted at young companies at home or abroad. This changed over the next few years as multinationals recognized that they could not be self-sufficient in generating novel ideas, and that start-ups were great at doing this. Today many multinationals offer a range of start-up engagement mechanisms from mass partner programs to selective incubators.

Be discerning in order to leverage the right opportunity. Just because an opportunity exists does not mean that it is guaranteed to work out. Entrepreneurs have to be discerning in how they engage with multinationals. In one sense, discernment in this context entails figuring out which partner is most appropriate to its strategic intent. Another facet is ensuring that its interests are protected, which may call for clever cooptation of local allies (e.g. mentors from respected incubators or VC firms). Yet another aspect of this is learning as much about the partner as possible to have a realistic understanding of what is and isn’t likely to be feasible.

Be reflective to learn from, and become better at dancing with, gorillas. Gorillas i.e. large multinationals can be an effective source of new business opportunities and revenues – but typically there are limits to how helpful they can be in this way. In the long term, new ventures will accrue important benefits if they adopt a learning mindset and seek to learn new capabilities through observation of, and joint activity with, large multinationals. Also, partnering with multinationals is a skill, and ventures can become better at this over time – if they consciously make the effort to reflect on their partnering experiences and talk to mentors periodically.

Thus partnering with multinationals involves considerable skill and effort – but the payoff can be considerable for new ventures if they can pull it off. Such start-ups harness globalization to punch above their weight. It’s a worthy goal for ventures with high aspirations in terms of innovation and internationalization

“Dancing with gorillas” – what is it?

Dancing with gorillas refers to start-ups partnering with large companies, in particular multinational corporations. I have been studying how these very different types of companies engage with each other in both the West (especially the US and UK) and East (especially China and India) for about a decade now. At the early stages of my research, I once asked the late Professor C K Prahalad what he thought about the scope for start-ups to engage with large multinationals, and his immediate response was: “Many of these small companies have no choice but to learn to dance with big gorillas”. I immediately latched on to that phrase!

Source: An interview with Dr Shameen Prashantham available here

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Julia – The Future of Numerical Computing and Data Science

First things first, we are really excited to announce our first JuliaCon India at Bangalore on Oct 9th and 10th. Julia Computing has partnered with Hasgeek for this event. For details and for registration, please visit http://www.juliacon.in/2015.

JuliaConJulia is the future of data science and analytics. Julia is open source, and its research and development have been anchored at MIT since 2009. Julia can easily be orders of magnitude faster than comparable solutions in interpreted dynamic languages such as R and Python, and is almost as fast as C (see http://julialang.org/benchmarks/). This makes it possible to deploy Julia in production.

Valentine’s day of 2012 was a special day for Julia. Our Why Julia blog post went viral and the Julia website has since been visited by over a million people. Today, Julia is a vibrant community with over 400 contributors. Over 700 packages are available in Julia today, in addition to the thousands of other open source packages in R and Python that can also be called from Julia.

Based on hundreds of discussions with CXO level leaders worldwide over the last 12 months or so, we now have deep insights into the nature of technical and business problems that enterprises are grappling with, and how Julia is already playing a key role in helping solve such problems.

Many companies depend on cutting edge computing technologies to create a market differentiator. Over the years, such companies would have developed in-house languages and/or databases or other technologies that they use to create their business solutions. Examples of such companies are large and small financial services firms on Wall Street, banks, investment banks, hedge funds and others who use such technologies in their trading platforms, asset management, risk management, portfolio management and other kinds of applications. Other examples of such firms are e-commerce companies that need pricing algorithms, search algorithms, and other compute intensive code that uses large amounts of data and complex algorithms. Such companies have either started looking at or started using Julia for their next generation platforms.

Similarly, CIOs’ offices in large enterprises in retail, distribution, telecom, manufacturing and many other verticals wrangle with high performance data analytics using their big data stacks. Julia is an ideal computational companion for such big data analytics applications.

CTOs’ organizations that undertake product design in engineering firms that are using tools in computer aided engineering, CAD, finite element analysis, computational fluid dynamics and other kinds of simulations are looking at Julia to replace the older mathematical computation packages that are slow, unwieldy and expensive. Examples of such organizations are found in automotive, aerospace, government labs, space research, and many others.

Regulators around the world are increasingly worrying about safety. Financial regulators want algorithms that are auditable and don’t crash markets. Regulators who keep our cars and planes safe and our environment clean are increasingly worried about the software that runs on these devices. Health regulators want devices that monitor our health to have reliable software. Regulators worldwide are now thinking about open source as the only viable approach to safety. Languages such as Julia that are mathematically sound and safe, make it easier for businesses to write software and for regulators to inspect it. We invite the reader to watch this fascinating video on the use of Julia in avionics.

In the nascent world of the Internet of Things, Julia provides a common language for analytics on the device and the server where algorithms can seamlessly and automatically move back and forth, given the constraints of bandwidth, power, and processing. Do see this video on the use of Julia in 3d printing.

Julia Computing, Inc. is a company formed by all the creators of Julia. Julia Computing provides professional development and deployment tools for Julia, consisting of open source as well as proprietary components. Our customers love having a common language for development and deployment of analytics solutions. Their gains are easily quantified by the elimination of program rewrites for deployment, and the significantly faster time to market.

Again, we are really excited to announce our first JuliaCon India at Bangalore on Oct 9th and 10th. Julia Computing has partnered with hasgeek for this event. For details and for registration, please visit http://www.juliacon.in/2015.

Guest Post by Viral Shah & Deepak Vinchhi for Julia Computing.

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India Innovation Session with Jeff Immelt, CEO, GE

GE

Every sector has a long period of evolutionary change that is only occasionally interrupted by a short (5-10 year) period of intense non-linear change. Global corporates like GE are able to position themselves to successfully embrace the evolutionary change. However, to leverage the period of non-linear change, a new kind of partnering model is needed.

Keeping in mind this theme, iSPIRT, India’s software product think tank, spent an hour with Jeff Immelt, CEO of General Electric, and his team, to discuss the implications of such non-linear change to GE and the larger global ecosystem. To drive home the point, six inspiring startups showcased their respective cutting-edge innovations that are helping drive change in their individual sectors. Their stories are captured, in brief, below.

Team IndusTeamIndus

Infrastructure for NextGen Apps

Team Indus, a highly qualified group of ex-ISRO scientists and systems engineers, spoke to GE of two moonshots they are attempting. Literally. The first is landing a privately funded spacecraft on the moon by 2017. As part of this mission, they India’s only entry, and top 3 of 16 global teams, in the Google Lunar XPrize Competition.

The second is a derivative of the first, where they aim to put up a high-altitude long-endurance platform to deliver payload to stratospheric orbits. In laymen’s terms, they are enabling wide-area connectivity for terrestrial applications, essentially disrupting satellites as they’ve been known and used. And at the current pace of progress, they are on track to be the leader in Asia by 2021.

Nimble WirelessNimble

Cold Chain Monitoring

Nimble Wireless’ pioneering IoT solution is built on top of the future of pervasive connectivity that TeamIndus is working towards. Their platform helps enterprises connect, control and manage their business critical assets to enable greater efficiencies and savings. A great use case is in helping leading food/cold chain companies ensure food safety and reduce wastage, especially important in a country that has 33% malnourished children but wastes nearly a third of its dairy products. Here, Nimble deploys real time temperature monitoring and alert management systems to help ensure food safety, eliminate wastages and attain visible RoI for food and logistics companies.

SavariSavari

V2X: Connecting Vehicles to Everything

Moving beyond the world of cold chain to the world of automobiles is Savari’s technology that connects vehicles to everything – each other, smartphones and road infrastructure. There is a battle ensuing between Silicon Valley’s revolutionary approach in favor of self-driving cars and the auto industry’s evolutionary approach in favor of connected cars. Savari’s patented middleware software is enabling the auto industry to realize the gradual, incremental change they believe is the way forward in connecting vehicles. Their technology is pushing forward safety, fuel savings and automation and ensuring auto companies don’t become ‘the Foxconn of Apple’.

Julia ComputingJulia

An Open Platform for Brilliant Machines

The consistent theme emerging is that machines are all going to be connected in not too distant a future. All well and good, but there’s a small problem. Today the programming language for machines (iron) is different from that of the cloud (silicon), where software and analytics reside. That means large time and cost investments are needed in translating algorithms between the languages to connect the machines.

Which is where Julia, an open-source language being built out of MIT, fits in. Their solution, a language with a strong mathematical foundation, serves as a common language for machines and the cloud, so the same engineers can write analytics that run on sensors and scale to the cloud. The language has visible use cases across machines (air collision avoidance algorithms, 3D printing) and cloud applications (predictive analytics, pricing algorithms), enabling immense savings in time and complexity. The industrial world until now only had proprietary platforms to choose from but now Julia provides an alternative that is open and neutral, where firms can retain strategic control of their products.

LogistimoLogistimo

Open-source supply chain

Continuing with the theme of improved efficiency is Logistimo, an open-source supply chain software enabling manufacturers, distributors and after-sales partners to better reach and serve frontier markets.  There are unique challenges of implementing such systems in low-resource settings of rural India, where nearly 70% of Indians live. But Logistimo’s nuanced methodologies to manage this low-resource context is what has helped reduce infant mortality, electrify villages, and improve the overall quality of life for citizens of the hinterland.

India StackiSPIRT

Impact on Service Delivery

Tying this all together was the final session about a pioneering initiative, the first of its kind globally, being spearheaded in India towards a cashless, paperless and presence-less service delivery. The India Stack ties together the Identity Layer (Adhaar), a Paperless Layer (eSign, eKYC), a frictionless Payments Layer, a Transaction Layer (GSTn) and finally a privacy/data-sharing Consent Layer to revolutionize the Indian landscape in not too distant a future.

 

Lots going on, lots more to come. And this is just the beginning of the excitement for India and the non-linear change that the startup ecosystem is enabling.

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What you need to know while hiring an Image consultant?

Every startup originates with a dream and a vision to make their ideas come to life and be instrumental in providing real life solutions; addressing critical problems, bringing innovation and delivering better user experience. A startup boost of entrepreneurial spirit with great zeal and enthusiasm coupled with determination, commitment and challenges.

Growing a business in today’s fast evolving environment is an overwhelming experience.

Rise- fall -Rise of startups:

Entrepreneurs know that a good idea can perish if it is lacking or not aligned with the current requirement of the market. While they have the passion and commitment, they are not able to reach to the right market and the target audience whereas, their competitors are prospering and gorging the limelight, and this is one of the main reasons, some Entrepreneurs are unsuccessful or doomed to failure.

Having said that, no matter how innovative and new your product line is, if you are not able to position your product in the market right and stay ahead of your competitors, The chances are quite bleak that your business will sustain over a period of uncertainty.

“If you don’t tell your story, someone else will.” – Unknown

Thankfully, that scenario is slowly changing as new entrepreneurs now understand the importance of building the Image and brand of their organization by adopting uniformed methods of communication. This creates a niche for themselves. However, even though more and more startups are aware about the need for ‘to be seen and heard’, they are not very clear about right channels, timings and people to address for attaining the ultimate outcome.

So, before a startup plans to hire an Image consultant, they need to seriously consider the following aspects, after all, engaging any form of communication, be it marketing, social or digital media or Public Relations services; will be an expense that requires an investment not only monetarily, but in terms of time and readiness to be present in the market

Answering the unanswered: The sole objective of Image creation of a startup

Most of the successful brands have recognition and therefore are continuously in the news. This plays a vital role as they thrive on attention, which a startup might not have, therefore it is imperative to outline a strategy that will not only keep the emerging brand in the media spotlight but also maintaining the level of consistency.

Keeping a tab on what competitors are doing and recognize the current trends in the respective segment will assist in structuring the goals and accomplish the desired results.

An Image consultant who is constantly in touch with the media and understands your product domain will help differentiate the brand from its competitors.

Identifying your market and your needs:

In this age of fast paced communication, when opinions & feedbacks are exchanged freely using various social and media channels like Twitter, Facebook, LinkedIn, TV etc… Image and reputation management plays indisputably an important role and requires a new level of engagement on the part of companies and entrepreneurs. While aiming for the moon and stars is good in the long run –it is not advisable to do so during an early stage of a startup, instead adopting a focused approach will reap benefits for entrepreneurs. A smart and coherent consultant understands this and help create a lasting impact on your target audience by telling compelling stories about your business thereby building strong relationships with your audience.

Identifying leads and converting them into relationships

A good Image consultant or consulting agency knows that “communications is an art” and they are the catalyst between the brand and the media to reach out to the consumers. So, when hiring a communications specialist evaluate them on the basis of their ability to tell you succinctly, who they have worked with and notice how well they summarize each company and what they did. Having existing relationships, their ability to create new ones and identify potential consumers to resonate with the brand.

People do not buy goods and services. They buy relations, stories and magic. – Seth Godin

Invest not in what comes cheap but what will add value

Speaking of brands and building up a recognizable brand identity is perhaps one of the most significant responsibility, so it might as well be shouldered by someone who will be able to manage it well. The value of an experienced Image consultant or a team shows in its ability to bring your message to target audiences in the areas most important to your business.

While there are many more measures a startup or an entrepreneur can evaluate the image consultants or consultancies they plan to work with, these above listed tools will help you in finalizing the most suitable consultant or consultancy to manage your brand. However, there is always this thing you would need to consider when deciding between your options, it’s important to realize that the practice of a solid Image building campaign will take few months before you see results.

Guest Post by Juhee Bagri

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Can e-commerce be price competitive…always?

While everyone is talking about the lower price points on online stores, people in the business understand that a lot of that price competitiveness is coming due to venture capital (VC) money, which is being used to offer further discounts on the purchase price of the e-tailers. The question to ask is – whether e-tailing, which is based on a marketplace model, can be truly price competitive vis-a-vis physical retail.

By the very nature of the marketplace model, which is being driven due to regulatory conditions, etailers can’t directly buy the goods from the manufacturers’ store and sell them. So, they have adopted the marketplace model, wherein, some wholesalers or retailers are the actual sellers using etail portal to complete the transaction with the buyer. In the accounting books, the goods stay under the individual sellers name, until the transaction is completed; while the etailer may provide logistic support in terms of warehousing, delivery and payment collection.

So you could have a situation, wherein, you ordered something on Amazon/Flipkart, which is actually being shipped by your neighbourhood retailer! The products do the round trip from retailer to some remote warehouse and back to you. This is like catching your nose by placing your arm around the neck!! How can this chain of product delivery be more price-competitive than you visiting the shop and buying the goods directly from the local seller!!

People will argue that it is the wholesalers/distributors that are selling online and, thereby, cutting out the local retailer margins and passing the cost savings to the end consumer. While it sounds convincing on paper, but the reality is very different. In the evening, if you visit the local market area in any city, you can see the courier boys of the e-tailers picking up goods from retailers in the same market. I see this regularly when visiting my local market once or twice a week. These are the very same shops from where I buy that are now selling on e-tail portals.

Also, the current effort from the likes of Flipkart, Snapdeal, Paytm, and Shopclues etc., to increase their seller base, clearly shows that they want to engage all mom-and-pop stores (and not just wholesalers/distributors) to sell online. If they were to work on the model of selling by wholesalers only and passing the cost benefit to the end consumer by cutting out the end retailer, simple maths will show you that their seller count can’t exceed 40k-50k sellers.

If the end product is coming from a retailer in your local city market, where are the additional margins to pay for the logistics of product pick-up, delivery, payment collection, payouts and handle returns? Who is coughing up that money? The retailer can do it partially, incentivised by increased volumes and being able to ship to remote corners of the country. But factually, even they don’t know where they are shipping! Also, a small cut in retailer margins can’t lead to the steep double digit discounting, which we see on almost all etail portals.

Fundamentally, the marketplace model works for shipping into remote areas, where physical stores for many brands don’t even exist, but there is a definite demand. However, for such services, the etailers should ideally be charging a premium and not discounts. In the metropolitan cities, the numbers just don’t up. And, buying from a local retailer will always be more cost-effective than buying from e-tailers, especially after the VC money-based subsidizing phase is over.

Our view has been validated by PriceMap customers, who are able to find local retailers offering the same product at lesser prices, which they were contemplating buying online.

This is a healthy debate and I look forward to your comments and views.

Guest Post by Suresh Kabra, Founder of PriceMap

Image Courtesy.

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InMobi’s Miip May Be More Important to India than Pichai

The emergence of an IP and technology-based leader from India will have a bigger long-term impact than a few Indians heading major global corporations

Isn’t it strange that we were obsessed with happenings at Google while the really momentous news of the coming of age of a serious desi challenger got lost in the noise?

Sundar Pichai and Google

News of Sundar Pichai’s ascension to the Google throne hogged media headlines for almost a week.

While I could understand the excitement instigated by the front page of Dainik Bhaskar in a young tier-2 and tier-3 city audience for whom a compensation of Rs 300+ crore would seem out of this world (however misleading that figure is since Pichai’s actual compensation in his new role is not known, and conversion from dollars to rupees doesn’t make sense anyway), the hoopla in the metro-based English language press was surely misplaced.

After all, what’s surprising? Indians including Ajay Banga (MasterCard), Victor Menezes (Citibank), Indra Nooyi (PepsiCo) and Anshu Jain (Deutsche Bank) have been CEOs of global corporations. And it’s now more than 20 years since Rajat Gupta became the CEO of the world’s bluest blue management consulting firm—McKinsey!

Indians are smart, ambitious and can communicate well. Once they have studied at a top US university and worked there for a while, they fit well into American corporate life, capable of discussing football and technology, and being politically correct. Most importantly, they can be quite conformist and refrain from rocking the boat. Clearly a good choice if you are a culturally diverse company like Google.

And, mind you, this may not really be the throne anyway as Larry Page and Sergey Brin are just one degree of separation away.

I have nothing against Pichai who appears to be a perfectly competent technical manager with the right credentials. But for me there were more interesting and promising events happening recently that didn’t get the attention they deserve.

What We Should Have Focused On…

For years now, we have bemoaned the absence of a Google-like company from India. Yes, we have had successful tech enterprises from India but these have been in the difficult-to-relate-to business-to-business (B2B) IT services space. The real big news of the last few weeks is that we now see some green shoots pointing to the emergence of an IP and technology-based leader from India.

On August 5, in a virtuoso performance that had a clear Steve Jobs touch to it, the CEO of InMobi, Naveen Tewari, introduced his company’s new advertising platform, Miip, to a gathering of who’s who in the technology world at Bangalore.

For the technological cognoscenti, InMobi is not a new company. It calls itself the “world’s largest independent mobile advertising platform”. Funded by Softbank, Kleiner Perkins Caufield and Byers and Sherpalo to the tune of $220 million, InMobi reportedly served 2.2 trillion advertisement requests in 2014. Its revenues are not in the public domain though some reports suggest that they could be as high as $500 million.

So, What Is Miip and Why Is It Significant?

Firstly, mobile advertising is huge and growing rapidly. With the shift of the internet to the mobile, most dramatically underlined by some Indian e-commerce giants’ decision to be “mobile-only”, the clear trend is for advertising on mobile.

Secondly, the whole promise of internet-based advertising (and now mobile-based advertising) is better targeting and customization. But this promise has to a large extent been belied. I am repeatedly amused by the fact that after I have purchased a ticket from, say, Indore to Delhi, I see online advertisements offering me low-priced Indore-Delhi tickets. These are completely wasted on me.

And, as InMobi keeps reminding us, many users see advertising as a distraction and an intrusion rather than something they find useful or enjoy.

Most extant internet or mobile-based advertising is intent-driven. You search for something you want to buy by entering it in a dialog box, and the search engine helps you by displaying related advertisements in addition to the search results. Once you have done such a search, related advertisements keep popping up even though the purchase may have been completed or you no longer have the requirement.

Such advertising makes limited use of analytics and doesn’t prompt you to check on other things you may be interested in. The range of products or services offered is also very narrow even though we know that there are hundreds if not thousands of companies that may be offering other products or services that may be of interest.

InMobi’s Miip is a mobile-based discovery platform that not only uses advanced analytics to overcome this problem, but also features a cute mascot that enters into a dialogue with the user to make suggestions and elicit user feedback. Along the way, the user can consult her friends before making a purchase choice using social media. All of this is done with high-quality visual content that exploits the superior graphics of today’s smartphone screens. Together, these enable an enjoyable and comprehensive shopping experience.

What’s significant in this case is that the company is already a strong player in the mobile advertising space, having entered at the right time about seven years ago. This gives it the muscle and the connections to capitalize on a big bet like Miip .

I particularly liked the launch of Miip in San Francisco, Bangalore and Beijing in quick succession, as these could very well represent loci of technological advancement and economic growth for the next decade. Unlike the earlier generation of Indian companies that shunned collaboration, it was good to see InMobi sharing space with important partners like Paytm and Walmart at the launch event itself.

I have only one regret about InMobi: I wish it wasn’t into push-based advertising that will promote even more consumerism.

India as a Product Nation

India’s success in services came from our ability to write high-quality software at low cost, without the need to make large irreversible upfront investments in technology or products. Companies like InMobi represent a new frontier where we are taking large bets and investing in platforms and new technologies.

This article is not only about InMobi, but about this new generation of companies that’s changing the way we do business. If sustained, this trend could help India become a Product Nation. In the long run, that would have much more impact than a few Indians heading major global corporations.

Reblogged from FoundingFuel

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Making the Future

What we see in theMaker addiction, is that a relatively small amount of people can have a big impact. You don’t necessarily need the world’s largest company behind you. – Dale Dougherty- Founder, Make Magazine

4 years ago, I walked out of the elevator onto the 4th floor of NYU’s TISCH building, home to the Interactive Telecommunications program that brought together some of the most diverse bunch of brilliant misfits from around the world to learn, teach, collaborate and make. The arriving Masters candidates, were an eclectic bunch, which included engineers, designers, lawyers, journalists, artists, architects, a masseur, filmmakers, dancers, fashion buyer, and a former drag queen. I was an actress and TV host, who didn’t know a soldering iron from a glue gun, and who, like many in my incoming class, had never written a line of code in her life. Yet, only a month later, I would strip down an old computer for spare parts to make my own galvanic skin resistor from scratch, and program video outputs to visualize the incoming data. My first wearable prototype –the mood gauge, had involved experimenting with different materials, soldering, electronics, programming, designing, user experience and video, all of which I’d known nothing of when I stepped off the elevator that first day of school. When my first device ‘talked’, I was hooked. The Maker addiction had begun.

The maker era, enabled by the Internet, DIY 3D printing, low cost chips/boards, open-source prototyping platforms like the Arduino, shifting business models and payment options have erased barriers to creation and expression and leveled the playing field. Today, if you want to express an idea, you can choose whether you want to employ sensors or film, an android app, performance or interactive sculpture. The Maker movement is sometimes perceived to be synonymous with geek culture, robotics and gadgets. And there is truth to this. Engineers, with their deep knowledge and a love of taking things apart are no doubt the movement’s most ardent mascots. However, making is more than just about the technology. It is about a cross pollination of ideas, the merging of the boundaries between disciplines and philosophies. At it’s core, the maker ideology is about moving from being a mere consumer to participating, influencing and changing the world you interact with- be it objects, people or experiences. It is also about pushing boundaries and experimenting for the sheer fun of it. And to achieve this, we need a variety of backgrounds and perspectives all playing with each other. Making/tinkering encompasses a dazzling variety of creations- including DIY quadcopters controlled by brainwaves, cloned fig trees, bamboo bicycles, environment-reactive clothing, 3D bio-printed organs. It touches every area of our lives and encompasses many different fields- arts and crafts, engineering, urban planning, architecture, theatre, film, storytelling, psychology, education, gastronomy, relationships, health & medicine.

“Technology is a means to an end; the end is people” – Red Burns, Founder, ITP, NYU

The industrial revolution concentrated the means and power of production in the hands of a few. Even the entertainment and news industry was a one-way street, with a clear delineation between producers and consumers. There was no way of “talking back” or dissenting on a scale that had any sort of impact. The internet and the subsequent democratization of tools and access changed that. Today, a lone individual with a You Tube channel can command more viewers than a major news channel. As an example, PewDiePie’s, a Swedish gamer’s You Tube channel has 32 million subscribers and more than 2 billion views. All he needed for that was a video camera and a subject he was passionate about. The rise of cheap 3D printers means many more people can create physical objects designed by them quickly and cheaply. The most exciting aspect about the maker culture is that it endows the maker with personal power. Where once, we grumbled about the lack of government initiative in solving certain problems, today, we have the means of creating our own solutions.

This is where makerspaces and Maker Faire comes in. Around the world, maker culture has emerged, founded on the ideas of collaboration and learning to learn. Innovation is a happy byproduct of this culture. From the Bay Area to Bogota, Istanbul to Nairobi, maker cultures are blossoming, driven by a spirit of collaboration and learning to learn. In India, Bangalore, Mumbai, Delhi, Ahmedabad and Kolkata have their own makerspaces, driven by a global sensibility, but also grounded in locally relevant approaches. One of these spaces, Bangalore’s Workbench Projects, operating out of an inspiring space in the Halasuru metro station, has been at the forefront of some exciting maker initiatives, one of which is the Bengaluru Mini Maker Faire, which it is hosting in collaboration with Nasscom.

Maker Faire describes itself as “the greatest show and tell on earth”. People from all walks of life come to show what they’ve made and to learn from each other. The open, playful nature of these events are deeply conducive to cross-collaborative projects and innovation.

“The Walls between art and engineering exist only in our minds” – Theo Jansen, Dutch artist, creator of kinetic sculptures.

“Maker Faire is primarily designed to be forward-looking, showcasing makers who are exploring new forms and new technologies. But it’s not just for the novel in technical fields; Maker Faire features innovation and experimentation across the spectrum of science, engineering, art, performance and craft” – Maker Faire website

The First Maker Faire was held in 2006 at San Mateo and attracted 20,000 people. Today, Maker Faires are held all over the world, with 151 events taking place in 2015 alone. Aware of the global shifts towards a maker driven economy, and eager to maintain their innovative edge, bigger corporations are now increasingly part of the Maker Faires. Companies like General Electric, Autodesk sponsor and, as in the case of Motorola, even collaborate with hardware startups like Makerbot.

The Bangalore Mini Maker Faire aims to be a community based learning event celebrating the Indian maker culture, with it’s unique perspectives, aesthetics and challenges. Be it robotics, games, gastronomical innovation, sustainability, textiles, apps or video, the Mini Maker Faire is a chance to climb aboard the Indian maker bandwagon and be a part of a global movement, one that Kevin Kelley has dubbed the “Third Industrial Revolution”.

If previous industrial movements were about creating silos and competition, the maker movement emphasizes and engenders collaboration. A fashion designer collaborates with an engineer to create a responsive dress, a homemaker and a 12 year old biology enthusiast work on bio-fabrication projects, the local police team up with security specialists, designers and android developers to create apps and devices for a safer city. The possibilities are endless.

If you’re a maker or think you might like to try your hand at being one, apply to participate before the 15th of September by sending an email to info(at)workbenchpojects.com

If you would like to support the maker community as a volunteer, sponsor (be it individual/ organization) feel free to email to info(at)workbenchprojects.com.

The Bengaluru Mini Maker Faire will take place on the 15th of October 2015 at the Taj Vivanta, Yeshwantpur.

Guest Post by Suvarchala Narayanan

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Getting The Funding Piece Right

Creative inventors with creative ideas need creative capital

“As a first-gen entrepreneur and professional by training, I have become contemptuous of the local investor community—it uses a cookie cutter approach with very limited imagination. They would rather blow their cash on an app (without proof of concept) than on a good service model that has growth potential. We pretend in India to be like the Silicon Valley guys, but we don’t really have the b****s!”

This was the explosive start to a mail I received recently from an obviously frustrated entrepreneur. The irony is apparent. As Govind (not his real name) struggles to raise a few crores to scale up his business, thousands of crores have been pouring into e-commerce and asset-light technology-driven businesses patterned on an Uber or an Airbnb. While it is possible that some of these new models will become big in India, the fact is that many of the individual companies funded will crash as each model is likely to witness only two or three big winners.

Govind is not alone. Other types of new ventures are facing similar problems. A recent article in Mint points out that dozens of innovation-driven tech start-ups are struggling to raise money to take their businesses to the next level.

The Funding Challenge

Over the years, at the aggregate level, there has been a substantial increase in the funds available to Indian businesses from private equity and venture capital. Today, large international funds have an Indian presence. Though there are frequent murmurs about the vagaries of the Indian taxation system, billions of dollars of venture capital/private equity investment have been pouring into India.

But I wonder whether these are the only type of investors we should be seeking. The classical venture capital model is predicated on seven-eight of every 10 investments tanking, one-two having some moderate success, but huge returns on one in 10 investments that make up for the poor returns on the others. Recent reports speak about blurring of lines between private equity (which typically comes in at a later stage) and venture capital as everyone wants to be at the party.

Govind ended his mail with:

“I think investors must look at roping in domain experts (beyond their own borders) so that they develop in-depth understanding of these sectors. I think the challenge in India is that the people facilitating investments are not themselves entrepreneurs (or led by entrepreneurs) in many instances—so they are risk averse (a bean counter mindset) and exhibit a herd mentality (apps are the new sunshine).”

How do we catalyze such investments by domain experts? Here the role of seed capital for new funds comes in. Israel’s famous Yozma model which brought into that country highly accomplished tech investors with substantial operating experience has been around as a role model for a couple of decades. It’s good to see that we have finally realized the value of Yozma.

In its quest for growth and employment, the current government has actively embraced a pro-start-up stance. One of its initiatives is the recently announced India Aspiration Fund (IAF) built on the Yozma concept. IAF is conceptualized as a “fund of funds” and will invest in venture capital firms, not directly in enterprises. I am hoping that the government will ensure that its 2,000 crores is well-distributed across investments in different sectors and business models.

But even the IAF will not be able to meet the needs of all types of firms. I often come across business ideas that have moderate risks with moderate returns that don’t fit the profile a typical venture capitalist is looking for. Unfortunately, these firms lack the assets that could be offered as collateral security. Our already risk-averse banks are now focused on addressing a huge problem of non-performing assets (NPAs), so it’s unlikely that they would be very enthused to fund such businesses anytime soon.

From Creative Confidence to Investment Confidence

Much has been written and debated about the recent criticism by Infosys founder NR Narayana Murthy that India has not been the source of major inventions in the decades since independence. While there has been a tendency to blame our scientists and engineers or the government, I would lay some of the blame on our financial system as well. Creative inventors with creative ideas need creative capital!

Herd behaviour or what organization theorists would call isomorphism is not uncommon as a risk mitigation strategy. But, as a student of strategy, I would back distinctiveness any day. Doing whatever everyone else is doing can’t create a distinctive competitive advantage and that is true for investment firms as well.

In our work on building innovation capabilities, we emphasize the importance of building creative confidence. This is not a term we coined, in fact it comes from the Kelley brothers of the iconic design firm, Ideo. Creative confidence has a special resonance in India where over a couple of hundred years we lost our faith in our own creative abilities. But successful innovation requires not only the creative confidence of the inventor but the confidence of the investor to back new ideas.

What kind of an investor is likely to have that confidence? Probably one who has the experience of doing it himself. As Govind wrote in his mail, an investor with a primarily financial background is unlikely to have the confidence to back a radically new idea.

And, finally, some Bigger Questions

Sometimes, I wonder whether there is a fallacy in basic economic theory. For, Economics tells us that in an efficient market, investments will go into the most productive applications. But, is driving consumerism or bringing more taxis onto India’s already jam-packed roads the best use of money?

In the adoption of technology or new business models, India tends to imitate the West with a lag. But, given that our needs are so different, does that really make sense?

Not so long ago, there was a lot of interest in innovation at the bottom of the pyramid, and so-called frugal innovation. These were seen as critical to solving the myriad social problems that India faces. But now these have been displaced, at least from media glare, by the stratospheric valuations of online food or grocery stores. It would be a mistake to lose sight of the importance of these innovations and we need to find ways of continuing to support and nurture enterprises built around them.

In many cases, these enterprises are social enterprises with positive societal externalities. The National Innovation Council under the previous government had a plan to create an India Inclusive Innovation Fund to support such enterprises. I hope this idea is not lost in the noise and excitement that we are seeing today.

Reblogged from FoundingFuel