First AI/ML Playbook Roundtable – Playing With the New Electricity

This is a Guest post by Krupesh Bhat (LegalDesk) and Ujjwal Trivedi (Artoo).

AI is seen as the new electricity that will power the future. How do we make the best of the opportunity that advancements in AI technology brings about? With this thought in mind iSPIRT conducted a symposium roundtable at the Accel Partners premises in Bengaluru on March 10th. Accel’s Sattva room was a comfortable space for 20+ participants from 11 startups. There were deep discussions and a lot of learning happened through subject matter experts as well as peers discussion. Here’s a quick collection of some pearls, that some of us could pick, from the ocean of the deep discussions that happened there.

Products that do not use AI will die soon. Products that use AI without natural intelligence (read common sense) will die sooner.

– Manish Singhal, Pi Ventures

Starting with that pretext, it isn’t hard to gather that AI is not just a promising technology, it is going to be an integral part of our lives in near future. So, what does it mean for existing products? Should everyone start focusing on how they can use AI? Are you an AI-first company? If not, do you need to be one? After all, it does not make sense to build the tech just because it appears to be the next cool thing to do. If you are building AI, can you tell your value proposition without mentioning the word AI or ML? have you figured out your data strategy? Is the need driven by the market or the product?

Before we seek answers we must clarify that there are two types of products/startups in the AI world:

First, an AI-first startup – a startup which cannot exist without AI. Their solution and business model is completely dependent on use of Artificial intelligence (or Machine Learning at least). Some examples of such startups in local ecosystem are Artifacia and

Second, AI-enabled startup – startups with existing products or new products which can leverage AI to enhance their offering by a significant amount (5x/10x anyone?). Manish has a very nifty way of showing the AI maturity of such companies.

The session was facilitated by several AI experts including Manish Singhal of pi Ventures, Nishith Rastogi of, Shrikanth Jagannathan of PipeCandy, Deepak Vincchi of Julia Computing.

Maturity Levels of AI Startups

After a brief introduction by Chintan to set the direction and general agenda for the afternoon, Manish took over and talked about the various stages of AI based companies. Based on his interactions with many startups in the space, he said there are roughly four growth stages where different companies fall into:

Level 1No Data, No AI: An entity that solves a business problem and is yet to collect sufficient data to build a sustainable AI business. The AI idea will die down if the company fails to move to state 2 quickly. Business may be capturing data but not storing it.
Level 2Dark data, No AI: The company holds data but is yet to build solid AI/ML capabilities to become an AI company. There is a huge upside for such companies but the data strategy needs to be developed and AI capabilities are not mature enough to be considered as an AI/ML company.
Level 3Higher automation driven by data and AI: These are the companies that have built AI to make sense out of data and provide valuable insights into the data using AI/ML, possibly with some kind of human assistance.
Level 4Fully autonomous AI companies: These are the companies at the matured stage where they possess AI products that can run autonomously with no human intervention.

Manish also noted that most companies they meet as a VC are in level 1 and 2, while the ideal level would be 3 and 4. He noted that AI comprises of three important components: Data, Algorithm & the Rest of the System that includes UI, API & other software to support the entire system. While it is important to work on all three components, oftentimes, the data part doesn’t get enough importance.

Do You Really Need Artificial Intelligence?

A whole bunch of solutions are smart because they are able to provide additional value based on past data. These are not AI solutions. They are merely rule based insights. Nishith from Locus added that there is nothing really wrong with rule based systems and in a lot of cases AI is actually an overkill. However, there are two cases where it seems apt for startups to look at AI for their predicament:

  1. Data is incomplete: An example of this is Locus who gets limited mapping for gps coordinates and addresses.
  2. Data is changing constantly: A typical case was of ShieldSquare where bots are continuously evolving and improving and the system deployed to identify them also needs to learn new patterns and evolve with them.

It is important to have clarity on your AI model especially when you communicate with your internal teams. Figure out what is the core component of your product – AI, ML, Deep Learning or Computer Vision.

What’s Driving Your AI Approach?

There are two major driving forces that can help one in deciding whether to AI or not to AI.

  1. PUSH: The internal force when decision can largely be taken if your business is sitting on a lot of useful data, may be as a side effect of your key proposition.
  2. PULL: The external market driven force where clients expect or ask for it e.g chatbots. We are already observing that AI can be a great pricing mechanism.

However, take great caution when using Customer data or Derived data, it depends on legal agreement with clients and can get you into legal troubles if it violates any terms.

Is Your Data Acquisition Strategy in Place?

Anyone interested in AI should have a data acquisition strategy in place. Here are a few points that can help you get one in place:

    • What data do you collect, How do you validate it, Clean it and store it for further analysis?
    • Surveys and chatbots can provide a steady stream of data if built correctly
    • Think of data as a separate entity (has its own lifecycle), it may help to think of it as a currency and plan how you would earn, store and utilise it
    • Capturing location, user interaction data can be insightful. This may include the interactions user has committed and the ones they have not committed (deleted/skipped/hidden)
    • It makes sense to invest time, resources and people to gather data properly
    • Have a unified warehouse (can start with economical options like Google Analytics and AWS)

It is also important to give some thoughts on how you are using aggregate data across the platform. In case, if your AI model uses a combination of customer specific data and the sanitised aggregate data available in the platform (“Derived Work”), then you should make sure that you have the permission to use such data. Without such clarity, you may run into legal issues.

Deepak Vincchi explained how Julia Computing is emerging as the programming language of choice for data scientists. The platform can process 1.3 million threads in parallel and is used by large organizations to crunch data problems.

In all this was an extremely engaging 3 hours without break. Guiding the session with real examples by Nishith, Shrikanth and also shared learnings from Navneet and others really helped bring to life Why AI and How AI. This symposium is part of an AI playbooks track was aimed at kickstarting cohorts of startups ready to jump with AI and help them get traction with AI, more will emerge on this shortly.

10 startups attended this mini-roundtable session – Acebot, Artifacia, Artoo, FusionCharts, InstaSafe, Klove, LegalDesk, Rocketium, Rubique, ShieldSquare.

Thanks to volunteers Rinka Singh and Adam Walker for their notes from the session and Ankit Singh (Mypoolin/Wibmo) for helping coordinate the blog post & note

* All iSPIRT playbooks are pro-bono, closed room, founder-level, invite-only sessions. The only thing we require is a strong commitment to attend all sessions completely, to come prepared, to be open to learning & unlearning, and to share your context within a trusted environment. All key learnings are public goods & the sessions are governed by the Chatham House Rule.

Featured photo by Matan Segev from Pexels

Playing with the new Electricity – AI/ML Playbook Sessions [March Update]

[Update 29-Mar] New April Session Dates – Symposium RT is being scheduled for Bangalore & Chennai (21st & 28th April). 

“Tectonic” market shifts happen every few years creating a change in landscape, market and opportunity. The most recent “tectonic” shift is the emergence of the Artificial Intelligence era. In just the same way electrification in the early 1900s transformed major industries globally, AI, Machine Learning & Deep Learning are poised to transform a multitude of industries, services & products.

It took 100 years from the discovery of electrical generator to electrification of industries. AI is doing this in a span of 70 years (from the time of the Turing Test).

AI/ML has gone through many winters and is now in its eternal spring. It portents a new framework for startups to navigate and evolve from an internet era startup into an AI era startup.

Every new era shift begins with a lot of smoke and hype before it is well understood. iSPIRT ProductNation & Julia are launching a set of AI/ML playbook roundtable & workshop sessions to dispel the hype around AI, and help bring a pragmatic mindset & process change necessary for product startups to leverage AI/ML. We believe AI is not just a technology shift. It is a combination of product, business, and technology shift. Adapting to it requires a new paradigm of thinking to build a viable value strategy. This needs to be done mindfully and in context of the value you offer to the customer, do not rush in with the AI hype.

These multi-step playbooks are for all categories of startups regardless whether they are AI-First or SaaS, and MarTech, FinTech, HealthTech or any other <Domain>Tech category, startups who are looking to deliver a higher order value to their customers by leveraging and applying AI models with their data.

Since AI/ML is still in its early years there aren’t any proven success playbooks. Hence these deep sessions will bring together AI experts, AI Mavens (entrepreneurs who are more ahead in their AI journey), iSPIRT Mavens, and selected startups, to discuss & share their insights, challenges & learnings on the mindset shifts outlined above and best practices adopted. The 2-step playbook roundtable sessions focused on founders (+1 typically CXO) and a hands-on lab workshop are a sequence of:

    • AI/ML Symposium RT (step 1) – An invite-only 3 hour mini-symposium playbook with AI/ML experts, first mover AI leaders & Mavens from our startup community and 10-15 invited startups, focusing on Why AI/ML? What was the higher order value being created? How to identify the opportunities to leverage AI? What do you need to get started with AI (if not already running)? Data needs for AI/ML investments… The shared awareness created in this session, combined with the commitment by startups to articulate their AI/ML opportunity, and detail their approach will lead to the next AI/ML roundtable.
    • AI/ML Playbook RT (step 2) – Startups at similar AI readiness from the Symposium will be invited for a 5-hour deep-dive roundtable discussion on the AI/ML challenges in the context of the startup domain, effectively going through their AI/ML readiness & approach (a review & teardown). Topics would emerge from the Symposium RT and could cover data collection & modeling strategy, AI transformation algorithms, Business model innovation, Success metrics… This session is restricted to 5-6 startups (having similar AI needs) per roundtable and an AI Maven to facilitate the topics & discussion. Possible outcomes for each startup would be to develop an action plan/checklist for next few months of execution. Additionally, startups can identify a tiger tech team to go to the AI/ML Training Lab to get traction for their checklist…
    • AI/ML Training Lab with Julia Sandbox (optional) – A 3+ day workshop intended for the 3-4 person tiger tech teams (CTO, Engg, Data guy, PM…) from each startup. The workshop will help focus on building competency, getting traction & executing implementations related to the checklist developed at the roundtable.

For the first set of these playbooks, we are inviting nominations/applications for startup founders (+CXOs) who are either directly focusing on AI-based opportunity or have started integrating AI/ML as a core strategy for their product growth/success. Please provide your nomination for startups you believe should be part of the first series of the AI/ML playbooks. If you are a startup and interested to be part of this please register below. On final approval, an invite confirmation will be sent via email.

Please submit your nominations here. A registration link will be sent to your nominee.

Dates & Venue for the first of the series:

AI/ML Symposium RT #1 – 10th Mar (Sat) 2p – 5p Done
AI/ML Symposium RT #2 – 21st Apr (Sat) 11a – 2p @ Bangalore TBD
AI/ML Symposium RT #328th Apr (Sat) 10a – 1p @ Chennai TBD
AI/ML Playbook RTApr-TBD (Sat) 11a – 5pm @ Bangalore TBD
AI/ML Training Lab w/ JuliaApr-TBD @ TBD (Bangalore)

While the sessions are in Chennai/Bangalore, we believe this topic is of emergent interest to startups across the country and would invite all to register.

AI Mavens

Ashwin Ramasamy – PipeCandy
Manish Singhal – pi Ventures
Nishith Rastogi –
Shrikanth Jagannathan – PipeCandy


All iSPIRT roundtables are pro-bono (read below for how that works)

This series of playbooks is being setup by active support from our Mavens & Volunteers – Ankit Singh, Deepak Vinchhi, Karthik KS, Praveen Hari, Ravindra Krishnappa, Sandeep Todi.

P.S. Some great material for pre-reading

I strongly recommend all to go through many of these.

* All iSPIRT playbooks are pro-bono, closed room, founder-level, invite-only sessions. The only thing we require is a strong commitment to attend all sessions completely and to come prepared, to be open to learning & unlearning, and to share your context within a trusted environment. All key learnings are public goods & the sessions are governed by the Chatham House Rule.

* The Julia team is on a social mission to train a large number of people in India to develop grassroot skills and competency with AI & ML.

+Feature image from

Call for Volunteers: FinTech Leapfrog Council [FTLC]

iSPIRT’s FinTech Leapfrog Council (FTLC) is an initiative designed to help incumbent, government-owned banks make the transition to an era of cashless, presenceless and paperless transactions enabled by India Stack and other emerging technologies.

At iSPIRT, our belief is that banking will change more in the next five years than it has in the last 50 years. For a variety of reasons, the changes happening in India will follow a path that is very different from other countries. Indian Banks, therefore, have two choices: Create a new playbook to deal with these changes, or stick to the old rulebook and risk being disrupted.

Over the last two years, FTLC has been helping SBI, Axis, BOB and IDFC Bank create new playbooks in six orbit shifts that will help banks successfully transform themselves. These six orbit shifts are:

  1. Fee-based Payments to UPI and Payments as a Service
  2. Closed Billing Systems to Bharat Bill Payment System (BBPS) and Billing as a business  
  3. Asset-based lending to (Cash) Flow-Based Lending
  4. Closed Pipe Architectures to Open APIs and Platform Banking
  5. Core Banking Systems to Internet Architecture and Transaction Engines
  6. Data Silos to Consent-based Data Sharing

These FTLC banks have major government shareholding and comprise more than 30 percent of the Indian banking system. Therefore, helping them create these new playbooks is a mission of national importance.

FTLC works with the CEOs and leadership teams of these banks through a series of quarterly workshops and customised workshops in the above-mentioned areas. Some of the industry leaders who spoke at FTLC workshops to facilitate these orbit shifts are:

  • Shamir Karkal, Head of Open APIs at BBVA Bank, Spain, and co-founder of Simple Bank
  • S Ramakrishnan, former Chief Data Officer of Citibank
  • Prof. Saras Sarasvathy of the Darden School of Business
  • Nandan Nilekani, Non-Executive Chairman, Infosys
  • Sharad Sharma, Co-founder of iSPIRT & Ex CEO – Yahoo Inc, R &D. 
  • Sanjay Swamy, Managing Partner of Prime Ventures.

We are looking for an anchor volunteer who can work closely with the FTLC banks to ensure that they are making progress on these orbit shifts, and gradually take my place at FTLC.

For me, being the anchor volunteer for FTLC has been rewarding in many ways. The opportunity to work with other volunteers whose work is reshaping the fundamental nature of banking in India has been very exciting. The opportunity to work with some master strategists who can see the big picture without losing focus on the nitty-gritty details of execution has been awe-inspiring. Seeing young volunteers take on crucial roles and excelling in it has given me great hope for the future of our country. And finally, the fact that iSPIRT’s work is helping India create a world-class digital infrastructure is something that fills my heart with great pride. I had initially signed on as anchor volunteer for FTLC for one year, but the work was so interesting that one year became two before I realised it! We are now looking for a volunteer who can replace me, but start off gradually as a volunteer-in-training.

As you probably know by now, it is difficult to become an iSPIRT volunteer, but easy to cease being one. The arduous process of becoming a volunteer allows each side to feel each other out. We want you to get into volunteering with your eyes open. As part of this counter-intuitive mantra, we let you hibernate without any hesitation. This enables you to make soft promises that you can keep.

If you are interested in being a volunteer for FTLC, contact me at [email protected] or [email protected]

Hungry like a Dog, Running like a Cat

Have you seen the recent movie Queen of Katwe? In one of the scenes, when the talented chess prodigy Phiona (a child from the slums) is afraid to play in her first tournament against rich kids from other schools, the coach Robert tells his students a fable.

There was a dog who sees a cat and he thinks would make a very tasty lunch. The dog goes after the cat, chasing it all over the place, but the cat gets away. Why? “I was running for my lunch” the dog says, “but he was running for his life.”

Recently I happened to be part of a couple of invite-only iSPIRT sessions for the Financial Inclusion Challengers Circle (FICC). The FICC sessions are targeted at the FinTech/Banking corporates in India to raise awareness of and navigate the emerging digital revolution for financial products in India. There were 2 levels of sessions, the first was a kickoff for companies that were interested to know more about the market shift, and the second was for companies that were already part of the program and were presenting their approach. Both the sessions were attended by the CEOs & MDs of the payments and banking corporates in India. One of the CEOs said

“ Despite no background in banking, you are speaking about the imminent shift in the bankers language we understand!

The rabid hunger displayed by the CEOs was astonishing. These executives were not only actively listening to the digital transformations happening in India, they absorbed the market shifts (and some also validated them) and the potential impact on their industry. At the end of the first session, these leaders left with a conviction to return with a clear thought process on how they planned to navigate the market shifts and where they needed help.

The second session was even more interesting because these were the MDs who had formed a conviction from an earlier session and had returned a few of weeks later with an extremely articulate approach. The approach was very well structured, backed by good data insights, had a sharp focus on creating a winning product for a well defined narrow yet large size market. I can say that the hunger, the conviction and the metaphor running for life seemed evident as the CEO (and their team) were well prepared and vulnerably open for help.

In both these sessions, I glimpsed the hunger of the dog as well as some of the urgency of the cat with these leaders. Yet I do question whether these companies will be able to bring the urgency as well as the agility of the cat in their established organization and whether they will be able to shed their heavy & arcane investments (tech, model & mindset). It will surely be an extremely uphill battle for them to navigate the gradual and sudden1 onslaught from the natively digital global invaders entering this market.

However, I believe that successful startups embody both, the rabid hunger of the dog and the agile urgency of the cat. This attitude which easily permeates down into their lean organization provides them an inherent advantage that neither the big Indian companies nor the global digital invaders have. I strongly urge our ProductNation startups, insurgents, to imbibe & manifest this hunger, agility & urgency, to leapfrog over both the incumbents and the invaders, and to be aware and adapt to gradual & sudden market shits, be it FinTech, SaaS or any other category.

While Rashmi Bansal encourages entrepreneurs to Stay Hungry Stay Foolish, I would additionally like to encourage our product startup founders to be Hungry like the Dog and Run like the Cat.


1 A great read on Gradual & Sudden shifts. Do also go through the keynote presentation for the same.

While Well-Intentioned, Budget 2018 Falls Short of Expectations

Starting nine years ago, Aadhaar, eKYC, UPI and the rest of India Stack laid the foundation for a formalization of the Indian MSME sector. With the introduction of Aadhaar for Business and the unlocking of GST data for lenders, we are poised to see an explosion in flow-based lending to MSMEs, ultimately having a multiplier effect on jobs and economic growth. This is great news for MSME focused digital lenders and the product startups serving them. Therefore, a significant digital dividend for the Bharat economy is finally in sight.

It is heartening to see government adopt the same digital-first approach when it comes to health and education. While this is a great start, much work remains. Laying the policy foundation alongside an India Stack inspired technology spine will ensure the rise of the Bharat focused tech-entrepreneur. We need India’s entrepreneurs to lift outcomes for patients and students not adequately served by our existing system.

On the startup and investor fronts, this budget is a missed opportunity to address the important near-term issues. We had hoped to see the resolution for Angel Tax and other such Stay-in-India Checklist issues. Slapping a Long-Term Capital Gains Tax on the previously untaxed sale of listed equities will adversely affect the List-in-India initiative. Additionally, the compliance overhang of listing will no longer be tempered by the promise of tax-free gains. The promised tax regime must incentivize and protect foundational (angel and domestic investors) as opposed to fleeting capital.

While well-intentioned, this budget falls short of our expectations. India’s complexity and diversity call for a much more responsive and action-oriented policy-making approach. Only then can we harness our entrepreneurial energy to address India’s most pressing challenges.

About iSPIRT
iSPIRT is a non-profit technology think tank that builds public goods for Indian product startup to thrive and grow. Learn more:

Sanjay Jain, Nakul Saxena, Sudhir Singh and Sanjay Khan Nagra Fellows from our policy team have issued a press release on 1st February 2018, a copy of it is here. Reach out to Sanjay Jain in case you would like to know more details.

Special thanks to our volunteers Sharad Sharma, Siddarth Pai, Tanuj Bhojwani, Sarika Mendu, Anukriti Chaudhari, Karthik KS. 

A Look Back At How Startup India Has Eased The Journey Of Startup And Investors


It’s been two years since the fateful 2016 budget which recognised “Startups” as a separate breed of companies unto themselves, demanding bespoke treatment from the government and authorities. The clarity brought forth helped quell the nerves of both companies and investors, who had to otherwise resort to exotic exercises, supplementary structures, and platoons of professionals to keep their entrepreneurial dreams alive.

As we all await with bated breath for the slew of reforms expected of the Finance Minister, it behoves us to see how far we’ve come and how much further we need to proceed so that a billion dreams may become a reality.

This article is the first part of a two-part series which explores how Startup India has eased the friction in the Startup ecosystem so far, from an investor’s perspective with the second part talking about the next step of reforms which would have a multiplier effect on the ecosystem.

Flywheel of Funding

More often than not, any coverage about fundraising covers the journey of startups and entrepreneurs and the travails of raising their multimillion dollar rounds. But there exists another dimension to this story, that of fund managers raising their own funds. A large section of the investor community was elated that the government recognised this oft-ignored story and created the Rs 10,000 Cr (USD 1.5 billion) Fund of Funds managed by SIDBI which invests into SEBI registered AIFs and Venture Capital Funds.

This approach seeks to galvanise an ecosystem through a flywheel effect, instead of gardening it via direct intervention. The 10,000 Cr corpus can help seed AIFs worth Rs 60,000 Cr in India, which when fully deployed, is estimated to foment 18 lakh jobs and fund thousands of Indian startups. By contributing a maximum of 20% of the corpus of a fund, many fund managers can hasten they fundraise and concentrate more on helping their portfolio companies raise, instead of competing with them.

The Fund of Funds has invested into 88 AIFs so far, thus galvanising more than 5,600 Cr (USD 873 million) worth of investments into 472 Startups.

Bringing back tax breaks, not a back-breaking Tax

The Government’s support of Indian investors found its way into the Income Tax Act, with several measures to incentivise investments into the Indian Startup ecosystem, such as:

  • Insertion of Section 54 EE, which exempts Long-Term Capital Gains up to Rs 50 lakhs provided it has been invested in the units of a SEBI registered AIF
  • Insertion of section 54GB, which exempts Long-Term Capital Gains of up to Rs 50 lakhs provided it been invested into the shares of a Startup which qualifies for section 80IAC
  • Clarifying that the conversion of debentures or preference shares to equity shares will not be considered as a transfer and thus subject to capital gains at the point of conversion (the entire Venture Capital industry is based on convertible debentures and preference shares and this move has settled long-standing disputes regarding the instruments of investments)
  • Issuing a notification that the dreaded angel tax will not apply to shares issued at a premium to domestic investors by those startups who qualify under the DIPP scheme (although the scope of this needs to be extended to rid the spectre of angel tax that haunts various investors and entrepreneurs)
  • Clarifying that the stance of the assessee in categorising the sale of listed securities held for more than 1 year as Capital Gains or Income from Business can’t be questioned by the taxman
  • Changing the definition of a capital asset to include any securities held by a Foreign Portfolio Investor, thus removing the friction arising from asset classification (a similar provision is sorely needed for domestic hedge funds and Category III AIFs)

Capital without Borders

The Startup India scheme over the past few years has rolled out the red carpet to foreign investors while rolling back the red tape. The success of this is evidenced by the percentage of funding foreign capital represents in the Indian startup ecosystem, which is 9 times higher than domestic capital investment.

Some of the initiatives include:

  • Liberalising Foreign Direct Investment into most sectors including financial services, single brand retail, pharma, media and a host of other sectors up to 100% in most areas
  • Abolishment of the Foreign Investment Promotion Board
  • Relaxation of External Commercial Borrowings (ECBs) for Startups for up to USD 3 million
  • Allowing for issue of shares for non-cash consideration to non-residents under the automatic route
  • Marshalling foreign investment into Indian entities primarily for the purpose of investing in other Indian entities has been brought under the automatic route as opposed to the previous government approval route
  • Dismantling the approval mechanism for the transfer of securities by a Foreign Venture Capital fund to an Indian resident
  • Moving most of the filings (FCGPR, FCTRS, etc) to an online window managed by the RBI (

Well begun is half done

The government’s efforts to improve life for Startups in investors have begun to bear fruit in tangible ways as evidenced by the reduction in the number of companies seeking to have a Delaware entity with Indian operations. The recent leapfrog in the “Ease of Business” rankings also stands testament to this.

The Government must now seek to consolidate all these gains and clarify its stance and the stance of the tax department on long pending issues which have been a bane to all startups. While we have miles to go before we sleep, we must look back and take note of what we’ve achieved before we seek to scale greater heights.

This post has been authored by Siddarth Pai of 3one4 Capital

Angel Tax in India — Demystified and Explained

Group of business people analysis with marketing report graph, Young specialists are discussing business ideas for new digital start up project.
Section 56:2(viib) or not to be


Section 56(2)(viib) of the Income Tax Act, 1961, or the dreaded “Angel Tax” was inserted by the Finance Act, 2012 to tax any capital raised by a closely held company which is above its Fair Market Value (FMV) as income from other sources, with Rule 11UA(2) stipulating the following two methods for determining the Fair Market Value:

  • Net Asset Value (NAV) Method
  • Discounted Free Cashflow (DCF) Method

However, the Fair Market Value in section 56(2)(viib) is defined as the value

(i) as may be determined in accordance with such method as may be prescribed (Rule 11UA(2));


(ii) as may be substantiated by the company to the satisfaction of the Assessing Officer, based on the value, on the date of issue of shares, of its assets, including intangible assets being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature,

whichever is higher;

This section, in particular, has been a bane to small businesses, startups, and investors as it seeks to tax any amounts invested by a resident individual into a privately held company. In the sections below, we will explore the problems with the sections that govern the Angel Tax issue as well as the remedies that have been actioned by the government.

With a few more recommended clarifications and modifications, the entire issue can be resolved to incentivise the ecosystem and reward good behaviour.

Analysis of Section 56(2)(viib)

The reason why 56(2)(viib) evokes such fear in the hearts of startups and investors is that it bestows significant discretionary powers in the hands of the Assessing Officer (AO), goes against the principles of the DCF method, and until recently, discriminated against individuals on the basis of residency.

There are four major issues with this section which causes significant problems to Indian startups.

1. Lack of Enforcement of the Law:

  • 56(2)(viib) clearly states that the FMV shall be the higher of:
    — Value as per NAV or DCF (Rule 11UA(2))
    — Value to the satisfaction of the AO based on the value of the company as of the date of issue of shares
  • From a plain reading of the section, it can evident that even if the AO is unsatisfied about the value of the Company or believes the value to be lower, the disjunctive OR allows for the higher value to be the Fair Market Value (FMV).

Ideally, the Assessing Officer should not have the discretionary power to disregard a valuation acceptable to the entrepreneurs and a group of sophisticated investors and arrived at by a professional in the form of a qualified Chartered Accountant or a Category I Merchant Banker. Many startups have faced a challenge whereby the AO takes the lower value as the FMV and taxes the entire premium as income in the hands of the companies. This results in the law not being fully enforced, leading to consistent bias against the companies.

2. Discretionary powers of the IT Officer:

  • The valuation arrived at by the Company is on the basis of a Valuation Report given by a qualified Chartered Accountant or Category I Merchant Banker, is based on the inputs of the management and is acceptable to sophisticated investors. However, it has the additional criterion of being to the satisfaction of the Assessing Officer. This subjective interpretation often goes against the objective valuation methodologies specified in the Income Tax Act.
  • For tech entrepreneurs or ventures with long gestation cycles, this hampers the flow of invaluable capital needed to scale their businesses and causes a lot of them to flee to other countries like Singapore or the United States of America to escape this requirement to satisfy the AO.
  • This imputes significant discretionary powers in the hands of the IT Officers and exposes startups to the tender mercies of the taxman. It also takes away from the very basic tenets of finance, as shown below.

3. Projections vs Perfection

  • The principle of a DCF valuation is to encapsulate the present value of possible future cash flows. These are based on a Business Plan prepared by the entrepreneur to the best of their abilities and subject to various risk factors, market conditions, etc.
  • To penalise an entrepreneur for failing to exactly reach their projections by comparing it to their financials on a later date vitiates against the very premise of DCF and robs of the uncertainty inherent in it.
  • The market penalises failure by making future funding harder to come by, an erosion of brand value, of morale, etc. — but adding the risk of a massive tax liability for assuming that the future is certain will cripple the entrepreneurial mindset of venturing forth in spite of deviations from ideal plans.
  • The law states that the FMV is based on the valuation methodology adopted as of today, but takes into consideration what the future may hold. However, 56(2)(viib)(ii) flips this on its very head, as shown below.

4. Present Tense, Future Uncertain

  • 56(2)(viib)(ii) states that the Company needs to satisfy the Assessing Officer based on the value of the Company as of the date of the fundraise, whereas the valuation methodologies (56(2)(viib)(i), which leads to Rule 11UAA), allow for you to discount future cash flows as of today.
  • These contradict each other as the value as of today will always be less than the value in the future.
  • This allows for the complete disregard of the DCF methodology by the AO, leading to taxation on the basis of the present Net Asset Value instead of the probable future value.

The Added Dread of Section 68

In addition to the challenges with 56(2)(viib), Section 68 of the Income Tax Act, 1961 adds another dimension to these issues. Section 68 states that any sum credited to the books of accounts of an assessee can be charged to tax if:

  • The assessee is unable to explain the source of the credit;


  • The explanation is not to the satisfaction of the Assessing Officer

Several startups, who have faced off with the sword of section 56(2)(viib), also have to contend with section 68, which again allows for significant discretionary powers in the hands of the Assessing Officer compounded by the discretionary powers already afforded by section 56(2)(viib).

This tag-team reminds one of the chants that haunted the English cricket team during the 1974–75 Ashes tour of Australia-

Ashes to Ashes, dust to dust,
if Thomson don’t get ya, Lillee must.

Given a choice, several entrepreneurs would rather brave the danger of the speedsters than the discretion of the taxman.

Remedies Already Enforced

The government has taken several proactive steps to protect and nurture the startup ecosystem in India. But this Sword of Damocles still dangles over the head of every entrepreneur. Until it is sheathed for good, there will always be fear about these issues.

On June 14th, 2016, the CBDT released a notification stating that for any company registered as a “Startup” and recognised by the Department of Industrial Policy & Planning (DIPP), any amount raised from an Indian tax resident will be outside the scope of section 56(2)(viib). The total list of exemptions to this section are:

  • Any funds received from a Venture Capital Fund or Venture Capital Company
  • Any class of people as notified by the Central Government, such as:
    — Non-residents
    — From June 14th, 2016 — for a company registered as a “startup” under the Startup India Scheme — any resident

While this goes a long way in helping future companies, those who raised money in assessment years 2015–16 and prior are still exposed to this section even if they are startups.


With a few more additions and clarifications to these sections, the last vestiges of doubt can be quickly addressed to help the startup ecosystem proceed forward with clarity and confidence.

  • If a company has a valid valuation report in accordance with the law, the tax authorities should not be able to question if the valuation is justified based on prospective information
  • If any entity qualified to be a startup from June 14th, 2016 onwards, 56(2)(viib) should not apply for any funds raised at a premium from the date of their incorporation
  • The exemption under 56(2)(viib) offered to a startup shouldn’t be denied on the technical failure of not applying to become a startup if they qualified to become recognised
  • The PAN details of the Investors should be sufficient explanation of the nature of the cash credit for Section 68 and for the Assessing Officer to decide, based on the investors past tax filings, if the source of income can be substantiated or not


Out of the USD 10 Billion of investment into the Indian startup ecosystem last year, only 10% of it came from domestic investors. If the inspirational Make in India and Startup India visions of the government are to be achieved and the true value of the ecosystem is to be unlocked, the government must focus on encouraging domestic investment instead of penalising it. Domestic investors shouldn’t be discriminated against and treated sub-par to foreign investors in terms of the legitimacy of their money, which is the current status quo under 56(2)(viib).

After all, a tax is not the best form of defence.

This post has been co-authored by Siddarth Pai and Pranav Pai of 3one4 Capital

India in a Digital World

Quick Update: We have submitted our response on 30 January 2018. You can find it on this link

It is widely known that the amount of data generated daily worldwide is rising at an incredibly exponential rate. Yet, what remains shrouded is how this data, particularly those data types concerning or generated by us, as individuals, are being used and stored by both the public and private sector. As we move into a data-driven world, it is crucial that the laws developed around Data center on the premise of both empowering and protecting the individual. In fact, the main purpose of the 4th layer of India Stack, the “consent layer”, is just this: to provide for a set of tools and utilities, as part of the Data Empowerment and Protection Architecture (DEPA), that  empower citizens to assert control over their data.

The Justice Srikrishna led committee of experts has released a White Paper articulating their provisional thoughts on the Data Protection Framework, and are seeking public comments on the subject. iSPIRT will be submitting a formal response to the White Paper. This blog post lays out our current views regarding Data Protection and we seek suggestions and comments from the larger iSPIRT community as we finalize these into iSPIRT views.

We want the community members who are keen to contribute on the topic. If you have any feedback or you’re interested in contributing to the response, please reach out to us at [email protected]

 Restoring balance between the individual and data controller

From social media platforms to online loan applications, to ride-sharing apps, many of the services we access regularly require mandatory data collection from the individual to the data controller, either on a one-time but often on a recurring basis. Data collected by data controllers often gets used in ways far outside the stated purpose. This in turn automatically places the individual at a data-disadvantage, so to speak. We believe that this current industry practice is an anomaly and data collected must be used only for the purpose it was collected for and nothing else. The law should work towards enforcing this principle and aim to restore balance across all elements of the privacy construct i.e consent, notice, choice, etc.

In addition, the use cases for data are also rapidly evolving. Without empowering the individual, in addition to restoring the balance, a data protection law cannot be considered complete; bringing us to the second core principle.

Data should be used to empower and not for harm

Indians will be data rich before they are economically rich. They must be empowered to use their data for their own benefit. For example, I must have access to a secure mechanism to share my financial information with a personal finance application such that I may easily track my spending and get intelligent recommendations on where to invest.

Progress in the area of data sharing is evident as in February 2017, the Digital Locker Framework was proposed as a national standard for aggregation. Along with it, an Electronic Consent Framework for enabling consent for sharing of data has also been released.

Yet, what about the vast amounts of personal data that have already been collected under various legal frameworks? Under new norms, individuals can be empowered by being given an option to “opt-out.” Where this is not feasible, the law should favour the rights of the individual, placing the higher onus on the data collector.

Individuals have Rights over their Data

When consent models were first implemented in the 1980s, data was largely static in nature. The opposite is true today with data being tracked, processed, and correlated in a multitude of forms, from the trends of our online shopping choices to the timing of our financial transactions. This transformation calls for a move away from the antiquated “consent-based model” to a “rights-based model” for data protection. The proposed rights model can be guided by three principles: accountability, autonomy, and security. Together these principles will ensure that individuals are provided a right to fair treatment, right to information, right against processing, and right to the security of his/her data. For additional information on the rights-based model, the Takshashila Institution has released a Discussion Document on this very paradigm.

The White Paper stays away from the word ‘ownership’ completely and instead opts to create rights which are always with the individual. The individual has a right to each piece of data that relates to her, and she can exercise this right to accomplish everything all that she needs.  The data controller does not have any rights to this data other than those granted by the individual.  We (iSPIRT) need to come to a conclusion as to whether this language is sufficient from our perspective.

Data controllers must be accountable

Data controllers are typically organisations (including non-profits, governments) and hence much more powerful than individuals. While consent is important from an empowerment standpoint, we are also aware of the practical shortcomings of this approach. Many users do not or can not know enough to make a truly ‘informed’ choice.  The data controller, on the other hand, has been entrusted this data by the user for a specific purpose – it is a very conscious act, and they must be held responsible for how this data is used.  This is a fiduciary responsibility, and the controller must keep the data secure, ensuring that the user does not come to any harm from their possession or handling of the data.

This accountability needs to be enabled and enforced by multi-dimensional checks & balances through an independent Data Protection Authority and appropriate adjudication process that will process dispute resolution when situations involving privacy harms have occurred.

Times of disruptive change require agile regulators

Successful businesses today must have the ability to evolve rapidly. Operating in this environment will require regulators to be agile and provide timely intervention. The law must also recognise that these changes are accelerating and that it will be impossible, at this time, to cover everything. Thus the law should empower regulators by providing a framework with a set of principles which are timeless, along with a mechanism that can change with the times and a context to provide suitable intervention.

Leveraging technology for enforcement

Data is no longer the imperative of a few industries, but fast becoming a utility across industries. Therefore, unlike other regulators for Savings, Lending, Banking or Telecom, the Data regulator will have to deal with at least 10,000x the number of entities.  Every company deals with the data of its employees, shareholders, customers, vendors, etc., which may fall under the supervision of this regulator.  In such an operating environment, it makes it imperative for the enforcement of the law on data to leverage modern technology tools to drive compliance, investigation, etc.

For example, the authority could create a technological framework for enforcement (such as data audits, logging, etc.) to minimise the effort required and only needs to regulate the exceptions or data breach notification could have the objective of helping mitigate the consequences of a breach and to serve as notice for an incident.

Balancing India’s needs for privacy, transparency, and development

Balance is a universal aspiration in all aspects of life and an essential requirement for smooth, sustained and predictable growth. If the balance between privacy and development is not maintained, we may end up with a scenario where an individual may not be able to use their personal data, sitting with one data controller (say tax authority) for a beneficial service from another authority (eg new loan). Similarly, the balance between privacy and transparency is also essential, especially for scenarios involving the utilisation of public resources i.e. a PDS shop refuses to provide details of beneficiary it services under the garb of privacy and is thus able to misuse the system to create ghost beneficiaries.

The law should encourage concepts such as anonymised open datasets and democratised access to other datasets that serve the public interest, paving the way for data to become a public good. The UK’s Biobank & RBI’s effort to create a Public Credit Registry are good examples of data becoming a public good.

There is also a need for balance in the efforts and action of the state and private organisation on surveillance and related activities. With newer technologies making access to data easier and cheaper, it becomes even more important to tread the path of balance more carefully. History has proven, time and again, how surveillance will be misused for personal benefit. Therefore, the law should explicitly call out principles to prevent misuse of surveillance.

In addition, the new law must harmonise various existing laws, particularly, the Information Technology Act, 2000, Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, and Right to Information Act, 2005, which directly or indirectly touch upon the issue of data protection.

Overall, the law should strive to create a balance between protecting personal privacy, providing transparency and accountability for institutions (including government), and ensuring development, growth, and empowerment for the individual and other market participants.

Innovations: Trust Score & Consent Dashboard

It is refreshing to see the White Paper bring out new concepts for consideration like the Trust Score and Consent Dashboard.

The innovation of a Trust Score could also provide a means to empower users by assigning every data controller a score based on the robustness of their data protection and data use practices. At a minimum, this would create a red-flag in the mind of the user, versus the black-box that users currently manage, prior to sharing personal information.

Having said that, the actual design of the Trust Score will be critical. It is easy to understand that the score will punish past incidents of data misuse, but we must also decide what behaviour to reward. Should the score be decided by a centralized authority or through decentralized feedback from end-users, audit agencies, etc.? iSPIRT welcomes views on designing such a Trust Score.

A Consent Dashboard could help individuals easily view to which organisations they have provided consent to process their personal information and how that information has been used.

The Consent Collector entity, part of MeitY’s Electronic Consent Framework, may be extended to perform the function of a Consent Dashboard. Through the consent dashboard, businesses may capture and log user consent, provide users with the ability to see what data has been collected, give users the ability to revoke their consent and erase their data, be able to notify users in a timely manner in the event of a data breach, and most importantly give users the ability to easily port their data to another data controller.

The Consent Dashboard could be designed in a manner such that it only generates and tracks an individual’s consent for collection and sharing of data. However, the data could be directly sent from the Data Provider to the Data Controller (and Data Processor) without passing through the Consent Dashboard. In this way, the Consent Dashboard could just be a registered entity, not a regulated entity, and be maintained by a third party instead of the government.

Next Steps

We request your thought/comments on the principles above, and in helping to add/subtract to the list. The final principles will guide and inform iSPIRT’s response to the Sri Krishna Committee White Paper. If you wish to engage more deeply on this topic of Data Empowerment & Protection and help us frame the response, please let us know by reaching out at [email protected]. The feedback submission on the White Paper is Jan. 31st 2018, thus we request all responses by Jan. 20th 2018 to receive consideration.

Update : We have submitted our response. You can find it on this link.

This post has been co-authored by Shrikant Karwa and Sarika Mendu.

Presenting the iSPIRT Volunteer Handbook

New Year Greetings from Product Nation

We are happy to present the iSPIRT Volunteer Handbook.

The volunteer model that underpins iSPIRT has been around since 2009. Every three years we write about our volunteer model so that others can learn from it and build their own volunteer networks.

There are many kinds of volunteer networks. iSPIRT is a volunteer network that builds public goods. Therefore we take inspiration from Linux, Wikipedia, and others. Over the years we have found that no two volunteer networks are alike. Each has its own personality, its own way of resolving disputes and driving excellence. In fact, we find that heterogeneity across volunteer networks is increasing. At the same time, they are becoming more homogenous on the inside. Keep this in mind when you look to replicate some of the practices and values of iSPIRT in your own volunteer network.

In contrast to our 2014 update, this time our self-reflection about the volunteer model is in the form of a Volunteer Handbook. By explaining the inner workings of iSPIRT more clearly, we hope to make our current and future volunteers more effective. We are always looking for high-quality volunteers. In case you’re interested in volunteering, please reach out to one of the existing volunteers or write to us at [email protected].

The handbook can be accessed below

Guiding the customer journey from Discovery → Signup → Onboarding for SaaS Startups

Are you ready for the product teardown roundtable in your city

As Diwali marks a Joyous celebration and heralds a Prosperous New Year for all, we kick off a series of Product Teardown Roundtables to help our SaaS startups prepare for a successful year ahead. This series of PlaybookRT will focus on Guiding the customer journey from Discovery to Signup & Onboarding.  The teardowns are being planned across our startup cities in quick succession (see tentative schedule below). We kickoff with a teardown RT in Chennai which will be facilitated by Suresh Sambandan (KiSSFLOW)Bharat Balasubramanian (FreshWorks).

Apply to get your slot here. (Limited seats).

Why are product teardowns important? For Explosive Growth!

Explosive growth is a common pain point for founders across startup stages, be it an early stage startup or a late stage startup. One key attribute to explosive growth is to make your customers market for you. Quoting from the article Six attributes of Explosive Growth Startups,

Nothing parallels word-of-mouth marketing

Why? Because the customers do this work for the startup. If this is to happen for your product it is important for your customers to have a clear-cut understanding of your product proposition, discovering it’s ROI and a WOW no-brainer experience of signing up and using it.

Our product teardown session is focused on exactly this evaluation for your product. Using our community of peers and leading practitioners, you would go through an intense journey and visualize how your potential customer discovers, understands, signs up and connects the product proposition and ROI to their needs. If you do a damn good job about this, you gain a big advantage because you don’t have to work so hard for marketing leads, getting you further on the path to explosive growth.

The teardown model

In this playbook series, we look at how to get your messaging right, and building a website and signup/on-boarding flow that converts with very little human intervention. This roundtable would begin with a deep dive into the company’s Idea, Discovery Process and navigate through the Landing Page, Sign Up, and its “Wow” experience. The format of the playbook is built around quick 10 minute demos, followed by peer-feedback moderated by SAAS founders & experts who have already built successful SAAS businesses.

Past teardowns

You can read some of the previous teardown experiences from the founders who participated.

Registration and Pricing

If you are keen to attend this RoundTable, do let us know by filling in your details here. We will confirm your seat subject to availability. All RoundTables are conducted pro-bono. The only payment you have to make is to provide your undivided attention and active involvement in the process. Playbook-RoundTables are a dialogue and there’s no monologue. None!

Teardown Roundtable Schedule (tentative)

City Date Time Register
Teardown RT in Chennai 4-Nov-2017 (Sat)  11am – 4pm Register
Teardown RT in Bangalore 11-Nov-2017 (Sat)  11am – 4pm Register
Teardown RT in Delhi 18-Nov-2017 (Sat)  TBD Register
Teardown RT in Hyderabad 25-Nov-2017 (Sat)  TBD Register
Teardown RT in Pune TBD (Dec) Register
(if interested please apply)
Teardown RT in Mumbai TBD (Dec) Register
(if interested please apply)


These are founder invite only events. Date, Time & Venue details will be sent along with the confirmation.
Since there are limited seats, we would request you to kindly apply at the earliest.

Playbook-RoundTable is one of the most sought after community events of iSPIRT. It’s a gathering of 12 like-minded product startups who are beyond the early stage. RoundTables are facilitated by an iSPIRT maven who is an accomplished practitioner of that Round-Table theme.

iSPIRT needs you!

iSPIRT works to transform India into a hub for new generation software products, by addressing crucial government policy, creating market catalysts, building societal platforms, and assisting product entrepreneurs evolve into the next role. It’s a think-tank with an emphasis on following up our ideas with great execution. This is where you come in.

Over the past 2 years, we’ve developed the Data Empowerment and Protection Architecture (DEPA) as the final layer of the India Stack. The DEPA empowers users with freedom and choice to actualize their data in a way that benefits them.

This includes a new technology for managing user consent and for authorizing data flows, as well as a new federated architecture for efficiently sharing user data from multiple data sources to multiple destinations (referred to as the digital locker framework). Banks and other big institutions are now beginning to deploy DEPA tools to enable consented data sharing by users. You can deep dive into DEPA here 


Volunteer Challenge

In alignment with RBI’s NBFC-AA Directive, we wish to develop a reference data architecture for Banks and NBFCs based on DEPA so that they can introduce new products and services to accelerate Financial Inclusion in India.

You will help develop, design and evangelize this new architecture with anyone and everyone in the market. If the job description seems vague, it is because this is uncharted territory and largely, you will decide where the work takes you. What we promise you is a world-class support system and a platform to actualize those ideas.

iSPIRT also has room for a lot of other volunteers with a variety of skillsets. Even if your expertise is not technology, but want to contribute to the mission with your unique skills, do fill the form below.

Why Volunteer

Our volunteers pay-forward for a variety of reasons.  Some do it for iSPIRT’s mission and cause. Others, find self-actualization in building public goods. Yet others do it to be in the company of world-class techies and entrepreneurs. You can learn more about iSPIRT from its Intro Presentation and its 2017 Annual Letter.

We’d be happy to discuss what is in your future, and how volunteering with iSPIRT can get you closer to that goal. Though, we have found that many of our volunteers have gone on to unexpected pathways, as they kept an open mind through the journey.


Preferably, Bangalore

How To Apply

Interested? Please fill out this simple Google form and we shall get back to you: 

Product Market Fit!

The Product Market Fit or PMF in short is one of the first holy grails that every entrepreneur strives to achieve. The second Holy Grail is also another “P” – Profits, which I will deal with in a blog post later.

I will share my learnings of what constitutes a Product Market Fit for an Enterprise Healthcare product, based on my journey of building HealthMacro’s DiagSmart product that is focused towards Diagnostics Labs and Radiology Centers.

I have travelled across 5-6 states spanning several cities, meeting hundreds of Diagnostic & Radiology Lab owners to come to this understanding.

An ideal product-market fit has the following characteristics:

Timeline : Usually for an enterprise product, it does take time (somewhere from 1.5 yrs to 2 years) to achieve a market fit after the product launch. Once one has achieved this, it means the following.

  1. Strong understanding of customer needs, budget and value chain : Once you meet a customer, you know where he/she fits in the Price Chain. You have deep knowledge of his customers, his competition, his pain areas, his revenues, and his annual budget.
  2. Acceptable across multiple segments : Usually we build the first product with more features, and then realize customers do not want all or are not willing to pay for all features. So you segment it. Segment it based on # of users or # of features to make it affordable for a wide market. We segmented it as DiagSmart Mini (lower end) to Basic (Value Product) with Enterprise and DiagSmart Premium models for top end customers. Each model has differentiating values based on the price customer is willing to pay.
  3. Strong understanding of your competitors’ strength and weakness: Deep knowledge of your competitor’s strength and weakness, w.r.t Features and pricing is key. You need to respect your competitor as you still discuss with customer why they will benefit from your offering. In one instance, we had to segment the Product as a DiagSmart Mini to fend off competition with a lower price range model.
  4. Acceptable across regions: In a country like ours, where there are no healthcare standards, in every region there will be local players who will have dominated the market with their product. Selling in newer regions and winning there is one important trait. For our lab product, adherence to existing NABL lab format reports was the key to driving acceptance.
  5. Clear Value Proposition: Your demo should do the work of showing how financially beneficial the product is to the prospect. You do not explain much. User experience is key here. Ensuring a flawless demo, where various customer stakeholders (owner, lab staff, Finance, Front desk…) finds their needs met is key in the demo meeting.

Your rate chart should explain the cost in a simple manner and the customer chooses what he needs based on his budget.

Other Guidelines to ensure Successful Product Market Fit :

Single Code Base : Once you allow a customization for a particular customer, it no longer remains a product. It becomes a project.  You end up with multiple versions, resulting in larger teams to maintain it.

Hence, a single code base is critical. There should be options turn on/off certain features/customizations, based on customer budget/needs.

You take inputs from the customer to the product, and based on the value to the product, you decide to add it to road map or not.   All customers have one code base.

Customer Care : You have a efficient Customer Care or Post-Sales Support team to take care of all their needs, with a clearly tracked process. Customers know how to reach you and what to expect as turnaround time.

You should be able to support new cities/regions without having a local office/support center.

Strong Engagement : Customers get monthly newsletters informing them of the progress of the product and the company. They respond with their feedback, inputs.

Strong Testimonials and Referrals : You should start getting strong testimonials from customers explaining how your product or Service has helped them. They do not hesitate to recommend you.

Water tight agreement with customers : You have strong water tight agreements with customers protecting your business. There are clear descriptions of services, costs and timelines, termination clauses leaving nothing open ended.

Clear mapping of the entire Business Process : All processes Pre-Sales, Sales, Sales to Engineering handoff, Customer On-boarding process, Customer Care process are clearly defined. All process are documented, clear training plans when you hire new folks. All members follow same process.

In summary, you lead the customer/prospect overall in all aspects of business. You are not dependent on few customers for their inputs/business. Customers respect you and trust you.

That’s when you have achieved “The Product Market Fit…”

Article by – Shashi Bhushan, HealthMacro

That’s why Indian entrepreneurs will win…

“Be the change that you wish to see in the world” – Mahatma Gandhi

When I was invited to attend Niti Aayog’s event held recently with our Honourable Prime Minister, Narendra Modi, for a two-day focussed discussion on creating ideas for a ‘New India by 2022,’ I wasn’t entirely sure as to what to expect. But, I went with an open mind and armed myself with a presentation.

Well, I couldn’t be more surprised. The event had an overwhelming participation from some of the leading figures in the tech-corporate world in India, cabinet ministers and secretaries, all brought together with one intent – to enable ‘Change.’

Champions of change

Enough has been written and spoken about the event on social media and news channels alike. I’m writing this post to list down some of my own observations on how I foresee things changing in India from a business point of view:

  • Domestic market will come-of-age: I grew up in India in a small town of Punjab called Moga. Like many other people in my time, I grew up wanting to do something for my country, but career prospects took me outside. I returned to India 14 years ago to create a global product company and eventually realising the “Make in India” dream from Bangalore. Although, most of our opportunities still came from other markets. With the Indian government rewiring the regulatory and policy framework and through its other related initiatives, things are set to change. Besides creating an environment that will ease up doing business here, the domestic market will open-up substantially with opportunities stemming from some of the major sectors of Indian economy such as agriculture, small and medium businesses (SMBs), energy, infrastructure and mobility – all focussed on improving efficiency and raising productivity. The increased focus on sustainable and inclusive development will also present opportunities to come up with solutions that will help address some of the more fundamental problems namely sanitation, affordable housing and such.
  • Technology will be the key driver for India’s transformation: Digital India will get real. The speed at which people have adopted tech-applications has been remarkable, its impact profound. Cashless transaction is just the beginning, technology will redefine the way businesses are conducted across sectors. Agriculture will get more connected and farmers will get unique IDs thus enabling credit scoring for loans and classification for subsidies, energy metering will get smarter, and Indian SMBs will drive demand for enterprise software. Technology will play a key role in driving opportunities across all these sectors. The rise in tech-prevalence will bring down the adoption barriers significantly. This will further lead to more opportunities for entrepreneurs to come up with solutions that are unique to the Indian market.
  • Prepare for global competition and collaboration in the home turf: All this will make India an attractive destination for domestic and international players alike – giving rise to competition and as well as opportunities for collaboration. To make most of this opportunity in the coming years, entrepreneurs in India need to start thinking scale.

This is where the Indian tech-community gets to play a key role. We need to leverage the power of its collective experience in conquering global markets and its understanding of the Indian markets, merge them and arrive at a playbook (figuratively speaking) on building a sustainable and a scalable business in India. This will require conscious efforts towards build leadership, training executive talent and sharing best practices in this area.

Unless we achieve excellence in executing at scale, we will not be able to make most of the opportunities that change will bring with itself in India.

The Indian tech industry evolved from being predominantly services oriented to taking ownership of building products from scratch. Despite several flaws and hurdles in the system, it has made an indelible mark on the world map.

The new India is going to present exciting opportunities. I’m confident, Indian entrepreneurs will win as they will be prepared, stay focused and execute at scale.

Above all they are ready to be the ‘Change.’

The best way forward for Privacy is to open up your data

Since conception, the India Stack has always been presented as having 4 layers. The first 3, paperless, presence-less and cashless, would essentially combat the price of doing transactions. Whether government to consumer or business to consumer, these layers significantly drive down the cost of interacting with your end consumer. With reduced cost, came increased access. Sachetization of services was possible, and we started seeing more and more businesses target India-2 and India-3, making them data rich.

Slide Showing the 4 layers of the India Stack
Slide Showing the 4 layers of the India Stack

The 4th layer, that was nicknamed the “consent layer” was different, and hasn’t received much attention thus far. Unlike, the other 3 layers, it does not seek to drive down the cost of delivering services, but is a tool to, as Nandan Nilekani puts it, “invert the data”. That means that it allows the user to assert ownership over the data, and exercise certain choices in how it is used. The Data Empowerment & Protection Architecture (DEPA) brings us closer to achieving a Data Democracy, where the user can share his data with service providers. The slides attached here, present iSPIRT’s outlook on what DEPA is, what it does and most importantly, how does it empower the user.

Before we get into details of Data Empowerment, it is useful to acknowledge that Data is not a homogeneous commodity. There is a hierarchy within Data, and not all forms of Data can be treated equally.

The five types of Data that needs regulations
The five types of Data that needs regulation

In the table above, as we go from left to right, data goes from more intimate, to more public. Even in today’s muddled regulatory framework around Data, non-shareable data such as biometrics, or passwords is seen as user-owned and a big no-no to share. But as we move towards the right, where ownership of the user ends, and that of the Data Controller begins, is murky at best.

Second, as you go reverse from right to left, the data becomes more individualistic. Anonymous Datasets, and Public Datasets are clearly about group data, whereas the rest are coupled with one or more individuals. Generated Data on e-commerce marketplaces, for example, may involve 3 or even 4 parties. Non-shareable data is typically intimate to a single user

Everything that we talk about in this post or the slides that follow, focus on the shareable middle of this chart, highlighted in yellow. At a principle level, we assert that any data, that has an individual identifier to it, is co-owned by every individual whose identifier is present in the data set. This may not give you complete rights over your data, but it gives you two rights, that DEPA enshrines in technology.

The first right, is that you can ask for access to your data from the data provider where this data originated, in a machine-readable format. The second right, is to share with user consent, your personal, generated or derived data with any other service provider you wish. To be clear, this is a right to consented sharing, and not consented collection. The right to what data is collected is a tricky issue, and requires policy, legal & regulatory clarity, before we can build tools to protect it. But we believe that the right for a user to claim stake on collected, generated or derived data about themselves has clear legal and moral precedent.

DEPA engages with Consent to Collect, not Consent to Share
DEPA engages with Consent to Collect, not Consent to Share

How do we enshrine these rights in technology? The Electronic Data Consent. But before we introduce the hero, I’d like to get into a little back story to set the stage.

When UIDAI first issued Aadhaar cards, it noticed that despite it’s portable, digital nature, people used Aadhaar cards as Proof of Identity in the same way they used other IDs, through self-attested photocopies. Most of the time, these photocopies would not contain the explicit purpose of why they were photocopied. These photocopies were impossible to manage, and inadvertently some bad actors would steal say PAN or Aadhaar xeroxes, and use them as paper identity documents for fraudulent transactions.

So the UIDAI launched eKYC. The premise was simple, UIDAI could authenticate the identity of the individual. Combined with explicit consent of the user to share their data, the encrypted data would go directly to the service provider, digitally signed from UIDAI. This copy of the KYC document was safer, more trustworthy as well as faster and cheaper.

So the basic equation became :

The eKYC equation
The eKYC equation

But this thinking was pretty powerful, and the MeitY decided to abstract it and create the Digital Locker Ecosystem. Where instead of only one source of truth (UIDAI), any government or private entity can become an issuer of documents. Authentication was also abstracted and need not be tied to Aadhaar. You could retrieve marksheets linked to your roll number, or mobile bills linked to your mobile number. This lead to the following equation :

The Digital Locker System Equation
The Digital Locker System Equation

If you’ve been following this so far, you’ll realize there’s a pretty big missing piece in these equations so far. The “User Consent to Share” bit doesn’t seem to have the same sort of granularity as the other two parts of the equation. Consent is more nuanced than a simple yes or no. By forcing consent into a binary, data providers reduce their offerings to a “take it” or “leave it” choice. This is a meaningless choice for the consumer.

To really capture user intent, we must expand our understanding of consent. We must try to capture the granularity of the customer’s intent to consent. Does the customer consent to sharing of his data forever or for a limited period of time? Does the customer consent to further downstream sharing of the data, or does he not want his data to leave the service provider? This is where the hero we mentioned earlier enters.

Sample Flows of Data and Consent under EDC
Sample Flows of Data and Consent under EDC

Introducing Electronic Data Consent (EDC). It is a mechanism to abstract consent flows, from data flows. Which means, that you can capture the user’s intent to consent in bits, digitally signed by the user for authenticity, and share it with other providers to retrieve user data seamlessly.

Flowing through the pipes of EDC is an open, extensible XML file called the Consent Artefact. The Consent Artefact has some pretty cool features. It captures all the parties involved in the transaction, it explicitly states what data is being shared and for how long. There are options for the user to decide if the data consumer is allowed storage and further sharing of this data. Also, all parties are immediately notified to any updates in the consent and all changes are logged. This facilitates data audits, not just for regulators, but also to enhance trust between Data Providers and Consumers, and unlock the data economy.

The Consent Artefact enables differential privacy measures such as Virtual Data Rooms. For e.g., a lending startup could know if your income in the bank account matches the one on your salary slip, without having to hand over your entire financial transaction history from your bank to the NBFC. It can just raise a query to your bank “Is income > x?”, and get a simple yes/no in return. The Consent Artefact’s logging and notice, can enable newer ways of pricing and doing business on data. The Consent Artefact deserves another post just for itself, and you will get one, in the next couple of weeks.

But to summarize, the EDC abstracts consent flows, from data flows. It allows for collection, management and audit of granular consent to share data in an open XML file called the Consent Artefact. Now, time for the big question. So What?

Well, today you can open a Bank Account instantly with eKYC. You can get your bank statements on a digital locker without lifting a finger, if the bank is enrolled as an issuer on a digital locker. But to get a personalized flow-based loan, you need EDC. Electronic consent unlocks the value of your data sitting in multiple databases of multiple service providers and gives you granular control over who gets to see what. Together these 3 tools give us a stack for Consented Data Sharing that we call Data Empowerment & Protection Architecture. DEPA opens up whole new models for Privacy Protection and Auditing Data flows while keeping the user in the center. More tools will be added to this Architecture that encourage the unlocking of value in disparate data sources, such as the healthcare combiner.

The 3 Tools that make up DEPA. Upcoming tools such as the Health Record Combiner will be introduced in another blog post.
The 3 Tools that make up DEPA. Upcoming tools such as the Health Record Combiner will be introduced in another blog post.

We believe that the 4th layer of the India Stack is the most critical. While the other 3 were useful operationally, the consent layer is useful strategically. It forces you to think about how best to align Data for the empowerment of the user. By opening up the data, it removes all monopoly value attached to the Data, whilst still retaining the inherent value of the Data. Innovation moves away from who can hoard the most user Data, to who can make the best use of the Data for the user.

If you’re curious to see EDC in action, please do have a look at the talk by Sanjay Jain & team here. The slides used in that talk are shared here.


Two Years of iKen : Wins and Lessons.

When we launched iKen two years ago, (The Way of Successful Entrepreneurs and Launching Pre Entrepreneur Program) we weren’t sure if a “reality-focussed”, “deep-dive format”, “away from jingoism”, bootcamp would have many takers. More importantly we weren’t sure of the impact that we would have.  This was after all a side project for everyone involved.

Two years hence, this is a post looking back at that journey. We have covered quite a distance and have some great wins and have undergone few reality checks as well.


First the good news.

We have three chapters (Bangalore, Pune Atlanta), have given talks on iKen in four countries (USA, France, Nepal, India) and  ten cities(and counting). More than hundred participants (from 10 batches) and more than 6000 impressions (people who attended iKen talks). And most important metric of all, we have fifteen+ revenue making companies. Some have taken the investment route and have raised seed funds.

But the most important metric of all for me is many graduates have become dedicated anchors themselves, teaching, learning and owning the program. The online tools and the “train the anchor” manuals have made the program a smooth automated engine.

30% of the folks decided to temporarily park the idea and went back to jobs but continue to attend iKen sessions at regular intervals. 

iKen Stats

While we are immensely proud of what we have accomplished, however there are certain targets, which we did miss by a wide margin.

First lets look at the genesis.  The model we had in mind was that of a toastmaster. Peer supported skill building bootcamp with a rigorous structure of tasks.

The idea is to provide the following :

  • Learn entrepreneurial decision models (primarily effectuation but we also have lean components (business canvas) used in certain sections)
  • A space for deep and contextual discussions on entrepreneurship for early enterpreneurs (people who want to startup) as early enterpreneurs are either  ignored or misguided(sometimes even taken for a ride).
  • Antidote for the sensational, shallow and sometimes wrong information spread by media.
  • Enable co-creation and collaboration and build the space and environment for that to happen.
  • A neutral space (as opposed to cheerleading skeptical or derisive) where people are comfortable in deciding even not to do a startup.


Roadblocks with Peer-to-Peer Models

Trust or lack of it is the major factor for failure of peer to peer learning. Lack of trust is actually two fold, one is doubt in capability and other is of trust in intentions and focus on control. The prevalent thought process that someone more knowledgeable and powerful (read mentor) will show the right way also contributes to devaluing what one has around them.

We have created the some tasks and rituals for participants to get over that habit but it has been hard. The teacher student model becomes more prevalent as you navigate away from Bangalore. However as they graduate and continue to attend the chapter the peer to peer collaboration has been immense.


Unlearning the Predictive Behaviour

One of the common patterns across all the cohorts is this belief that there is a way to game this “Startup” journey. Its almost like the cracking the interview; originality doesn’t matter, there are some packaged right answers and one needs to learn them.

I remember this one time in Sikkim where I spent an hour and half explaining why “starting with investors” is not the right way to think about a startup in early stages. The first question I got asked after the talk was “What is the right way to write the business plan so that I get funded ?”

Effectuation and iKen is nothing but intellectual support for common sense, but sometimes the power of accumulated “knowledge” is hard to ignore or wipe away.

Chapter’s Growth and Format

We expected at least 50% people to continue to attend the sessions even after completion of mandatory the 6-8 weeks. But that is reduced to one or two per cohort i.e 10%.  There are two-three reasons why this is happening :

  • Folks do not see the value in continued attendance as the focus shifts to the new batch.
  • People who have not started their ventures are shy of attending.
  • People don’t understand the value of agenda less networking.

The last one is really important and most people undervalue it. The trust is built overtime and we have seen incredible examples of camaraderie and trust built amongst the folks (mostly anchors but few regular attendees too) who attend at least two session in a month.

We have also realised the chapter’s success is dependent largely on the geographic location and the first few champions that get involved in the Chapter. Inorganic growth doesn’t get the right people and often dies away. Self-selected stake holders are the way to go in growing chapters and that takes time.

What Next ?

We will continue to focus on quality and continue to grow effectually. We have incredible set of anchors and a nation aspiring to break all barriers. Join us at Follow us @; Watch founder stories @ iKen YouTube