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Budget 2024 – Empowering Startups and MSMEs, and Doubling Down on DPIs and R&D

This 2024 Budget coming post-election has aroused the most curiosity since the budget of 2014. It is for two reasons that this 2024 Budget is significant as we work towards a Product Nation: Reason 1 is for this budget’s Innovation and related public spending on private innovation and Reason 2 is for the next-generation reforms to create a simpler regulatory environment. It is heartening to note that both items are priority areas.

The continuity of the interim budget announcement of 1 lakh crore for private R&D funding is encouraging enough for the startup ecosystem. Under the Vishvamitra initiative, iSPIRT has been pursuing funding at scale for private sector-led R&D and its commercialization. The announcements of funding research in highly sensitive strategic areas such as Small Modular Nuclear Reactors and setting up a 1000 crore venture capital fund for the Space economy have been on our list of initiatives to advocate for and it is heartening to see the Government address R&D investments in geopolitically sensitive areas. 

The Finance Minister announced, “We will set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of 1 lakh crore.” What and how this mechanism will be set up will be critical for enabling R&D in the country to achieve Viksit Bharat 2047.

Among iSPIRT’s top  initiatives is the Stay-in-India checklist, and the request to remove the “Angel Tax” for all classes of investors. The removal of angel tax is the biggest highlight of this budget for the startup ecosystem. The announcement comes after decades of struggle and persuasion. Finally the government has recognised the role of startups in generating employment and has acted in a positive direction. 

There is a huge amount of work pending to reform Ease-of-Doing Business (EoDB) if India is to achieve the set objective of Viksit Bharat 2047. The Finance Minister stating an  intent to “formulate an Economic Policy Framework” to set the “scope of the next generation of reforms for facilitating employment opportunities and sustaining high growth” perhaps speaks about the government’s thinking on it.  

The government’s intention to involve states in ease of doing business (EoDB) efforts is also a very welcome step. We hope the next moves are swift and the government seriously attempts to at least be in the top 10 EoDB destinations globally. This is much needed for MSMEs, Startups, and even to attract FDI in GCCs. The economic survey tabled yesterday also aligns with this thought process. 

“We have successfully used technology for improving productivity and bridging inequality in our economy during the past 10 years” said the budget speech. Public investment in Digital Public Infrastructure (DPI) coupled with innovations by the private sector has been a well-accepted norm now. The Government is serious about using the DPI approach in multiple areas, from agriculture to education, etc. The increased penetration of DPI will eventually help digitalization and penetration of software products in the economy. 

The budget recognising MSME credit as one big area requiring attention has also called for several actions in this direction. One important step is involving PSU Banks to build their in-house capability to assess MSMEs for credit using an MSME’s digital footprint, instead of relying on external assessment. This will encourage banks to develop cash flow based lending on lines of another initiative of iSPIRT – the Open Credit Enablement Network (OCEN) that focuses on information based collateral lending rather than asset based collateral lending which in turn could help in developing a new credit assessment model that evaluates the digital footprints of MSMEs in the economy. 

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#6 Healthstack session at LetsIgnite

We had the chance to conduct a discussion on the National Health Stack during the LetsIgnite event organized by the LetsVenture team on 15th June at the Leela Palace. The audience comprised of early stage healthcare startups along with angel investors and venture capitalists having keen interest in healthcare investments. Some notable attendees included Dr. Ramesh (senior cardiologist, MD Endiya Partners) and Mr. Mohan Kumar (Partners, Norwest Venture Partners).

Sharad Sharma (co-founder, iSPIRT), Dr. Santanu Chatterjee (Founder, Nationwide Primary Care), Dr. Ajay Bakshi (Founder Buddhimed Technologies, ex-India CEO Parkway Pantai) and Arun Prabhu (Partner, Cyril Amarchand Mangaldas) had been invited to lead the session, which was moderated by Anukriti Chaudhari and Priya Karnik, both core volunteers at iSPIRT championing the health stack initiative.

The context was set by an interactive talk by Sharad who began by giving a glimpse of the underlying philosophy of the iSPIRT Foundation – the idea of building public goods as digital technology stacks which can be leveraged by private players to serve Bharat. . Sharad described societal change in India being a Jugalbandi between digital public infrastructure, market participants and policy makers to achieve the same. He mentioned how the India Stack was changing the face of fintech in India and that the Health Stack could do the same for healthcare. The audience was more than startled to hear that a day prior to the session, the number of UPI transaction in India were already one-sixth of what MasterCard had done worldwide. ( UPI has only been around for 33 months! ). Sharad then went on to explain the different layers of the Health Stack comprising National Registries, standardised health information flows, an insurance claims management software built upon a standard Policy Markup Language and a gamifier policy engine. He didn’t miss reminding the audience that the Health Stack was being built to solve for the healthcare needs of ‘Bharat’and not the privileged 30 million Indian families already being well-served by the healthcare conglomerates in urban areas.

With the context in place, Anukriti took over to give a background of the healthcare landscape in India. India struggles with a 1:1600 doctor to patient ratio with more than 60% of doctors and hospitals concentrated in urban regions. To add to that, the public expenditure for healthcare is just 3.9% of our annual GDP (compared to 18% in the US) and it’s not surprising that most deaths in public healthcare facilities happen because of poor quality of care. Health insurance penetration barely touches 20% with OOP expenditure dominating the healthcare spending in India. With a huge underserved population, the need of the hour is to leap-frog to scalable solutions that can reach the masses instead of incremental linear growth solutions to address the Indian healthcare challenges. The different layers of Health Stack make it much easier for innovators (both public and private) to develop radical solutions.. While funding in healthcare startups has increased over the last 5 years, it still significantly lags behind areas like fintech, e-commerce, ed-tech, etc. Moreover, the bulk of healthtech investments have been focused on the consumer tech sector. Anukriti ended her views with a futuristic optimism regarding the innovations that Health Stack could open, to make healthcare truly affordable, accessible and high quality.

We were fortunate to have Dr. Santanu and Dr. Bakshi give insights about the Health Stack with their on-ground experiences in healthcare spanning over decades. Dr. Santanu mentioned that for primary care, the national registry of care providers was very fundamental to ascertain ‘which stakeholder provides what’ given that almost every provider is somewhere involved in primary care. On top of that, he stressed about the need for Artificial Intelligence backed clinical support systems that seamlessly integrate with the doctor’s workflow. This is of particular relevance for rural healthcare settings wherein, despite various efforts, there aren’t enough doctors to setup shops in villages . A standardized health information layer, along with data transfer mechanisms, could be the driving force for this. He was, however, wary of how well standard insurance schemes would work for primary care as the insurance business model falls apart given that almost everyone needs access to primary care at some point or the other. Priya resonated with his views and further suggested that for ‘Bharat’, micro insurance policies could be the key mechanism to drive insurance adoption at the consumer level. Such a system could potentially be facilitated by a claims engine platform build upon a standard policy markup language to ‘almost-automate’ (auto-adjudicate) the claims addressal process.

Dr. Bakshi contended that for a stable society, healthcare and education are a must, as the former secures our ‘today’ while the latter secures our ‘tomorrow’. Having worked as the CEO of three major hospital chains in India, he accepted (without an iota of political correctness) that as a nation, we have failed miserably in providing either. Healthcare is a social good and nowhere in the world has it been solved by private players alone (given the way private incentives are aligned). The public sector in India hasn’t stepped up which is the reason that private players dominate the quality healthcare delivery which could lead us (or is perhaps already leading) to following the footsteps of the US. This is an alarming trend because in the short and medium term, India cannot afford to outsource the entire healthcare delivery to private players. Dr. Bakshi remarked that to set things on the correct track, the Health Stack is a very important initiative and congratulated the iSPIRT team for working ardently to make it happen. He however suggested all stakeholders to be privy of the fact that while fintech transactions are linear (involving the payer and the recipient), a healthcare ‘transaction’ involves multiple aspects like the doctor’s opinion, investigation, drugs, nurses, ward boys and many other layers. This underlying multidimensionality would make it difficult to replicate an India Stack kind of model for the healthcare setting. At the core of the healthcare transaction lies the ‘doctor-patient’ interaction and it is imperative to come but with some common accepted standards to translate the healthcare lingo into ‘ones and zeroes’. He lauded the health information flows  of the Health Stack for being a step in the right direction and mentioned that in his individual capacity, he is also trying to solve for the same via his newly launched startup Buddhimed Technologies.

With two stalwarts of healthcare sitting beside her, Anukriti grabbed the opportunity to put forth the controversial concept of ‘doctors being averse to technology’ which could possibly be a hindrance for Health Stack to take off. Dr. Santanu and Dr. Bakshi were quick to correct her with the simple example of doctors using highly technical machines in providing treatments. They coherently stated that doctors hated Information Technology as it was forced upon them and suggested that IT professionals could do a better job by understanding the workflows and practical issues of doctors and then develop technologies accordingly. This is an important takeaway – as various technologies are conceptualized and built, doctors should be made active participants in the co-creation process.

The idea of a common public infrastructure for healthcare definitely caught the attention of both investors and startup founders. But amidst the euphoria emerged expected murmurs over privacy issues. That was when Arun Prabhu, the lawyer-in-chief for the session, took the lead. He reiterated Dr. Bakshi’s point of the doctor-patient relationship being at the core of the healthcare transactions. Such a relationship is built upon an element of trust, with personal health data being a very sensitive information for an individual. Thus, whatever framework is built for collating and sharing health information, it needs to be breach proof. Arun cited the Justice Srikrishna report to invoke the idea of consent and fiduciaries – a system wherein individuals exercise their right to autonomy with respect to their personal data not by means of ownership (which in itself is an ambiguous term), nor by regimes of negligence or liability but by the concept of a coherent consent mechanism spread across different stakeholders of the healthcare value chain. Moreover, the consent system should be straight-forward and not expressed via lengthy fifty page documents which would make it meaningless, especially for the India 2 and India 3 population. Lastly, he mentioned that just like physical and tangible assets have certain boundaries, even data privacy can have certain realistic limitations. If an information point cannot be specifically identified or associated with a particular individual but can have various societal benefits, it should be made accessible to relevant and responsible stakeholders. Thus, while it is imperative to protect individual health data privacy, there should be a mechanism to access aggregated anonymized health data. There is tremendous value in aggregating large volumes of such data which can be used for purposes like regional analysis of disease outbreaks, development of artificial intelligence based algorithms or for clinical research. Priya added that such a system was inherent in the Health Stack via the Population Health Analytics Engine and the framework for democratisation of aggregate data.

Overall, the session amalgamated various schools of thought by bringing together practitioners, CEOs, CIOs, lawyers, startups and investors on one common discussion platform. This was perhaps an example of the much-needed Jugalbandi that Sharad had mentioned about. A public good is conceptually ‘by the stakeholders, for the stakeholders and of the stakeholders’. This necessitates its active co-creation instead of isolated development. Needless to say, multi-way dialogue is the DNA of such a process. Staying true to that philosophy, we look forward to conducting many such interactive sessions in the future.

Ravish Ratnam is part of the LetsVenture Team – a platform for angel investing and startup fundraising.

He can be reached on [email protected]

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Innofest to Innonation

Evolving from a festival of innovation to a platform helping innovators to succeed…

Over the past 3 years, while volunteering for Innofest – the platform for hardware entrepreneurs – I realized two things:

  • Doing a hardware product in India is much tougher ….
  • … but there are several resources available across the country that can make it easier for hardware companies to succeed

What was needed is a way to connect those who need the assistance and advice to those who can help and are willing to help.

The goal of this group of 10-12 individuals who selflessly give their time in organising various initiatives and events under the Innofest umbrella is to make it easier for first-time entrepreneurs and to assist them in their journey. We deliberately chose to focus on startups and individuals who were using hardware and technology to solve meaningful problems. Because that is the most underserved section of the entrepreneurial eco-system.

The initial 2 years were invested in reaching out to hardware entrepreneurs and enablers who can assist them – maker spaces, companies, mentors, investors, etc., and bringing them together to interact with each other. As with many other sectors, in hardware led innovation too, resources were concentrated in 3-4 cities, while innovators were spread across the country. These innovators usually worked on their own, often spending time and energy and money on aspects that had already been solved by someone else. Getting together problem solvers and innovation enablers was a critical first step. And the community responded enthusiastically. Over 1800 innovators turned up at the inaugural in Bangalore. Since then we have taken the initiative to Hyderabad, Jaipur, Nagpur and other cities. In fact, Prathibha Sastry, the key volunteer driving Innofest took two ‘yatras’ – once driving from Bangalore to Delhi and once Bangalore to Assam – to find innovators in small towns and tier 2 cities across India.

What she unearthed was awe-inspiring – folks who were solving local problems with their frugal innovations. However, many of these enterprising folks did not consider themselves as entrepreneurs. For them, they were just using their ingenuity and creativity in addressing a problem that they or someone in their family or community faced. They were solving for Bharat. And that we feel is the real opportunity. To encourage these inspired, enterprising and creative problem solvers to get their innovations to solve problems at a much larger scale than they have currently envisaged. To help spread their innovations to places that can benefit from these innovations. I.e. find innovators and help them in their entrepreneurial journey.

To do that, it was important that we shift gears. And at Innofest, we have.

We now have extended the goals to not just curate and connect innovators and enablers, but to also undertake programs and initiatives that will increase the chances of success of these innovations. These include providing better access to resources like maker spaces, working with large corporates in helping drive their innovation programs, creating better access to capital and markets, creating a pool of mentors, etc.

Indeed, from being a festival or celebration of innovation, Innofest is now a platform for innovators to succeed in solving problems and making our country a better place. And hence, we have also taken the bold step to change our name from Innofest to Innonation, which means using innovation to improve the nation.

Whether you are an innovator, or want to volunteer, or a company that wants to support innovation or a co-working space or maker space, do connect with us at Innonation. We need a lot more people in making this volunteer-driven platform successful.

To get a ringside view of the innovation happening across India, join us at the flagship event in Bangalore on 26th August. If you are into solving a problem for Bharat, check the agenda to see what workshops and events are most relevant for you.

See you at Innonation. The country needs you to be there.

Prajakt Raut

Founder –  Applyifi

 

 

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InnoFest 2016 – Innovation celebrated in Bangalore, and how…

Robots, Drones, Electric Bikes, 3D printers, Modular Homes – It’s all Happening in India – #IndiaInnovates

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The Indian Software Product Industry Roundtable (iSPIRT), a think tank dedicated to the cause of the Indian Product Industry, held its flagship event InnoFest 2016 in Bengaluru. This unique event was inaugurated by Mr. Mohandas Pai, Chairman of the Board, Manipal Global Education. The one day long festival focused on hardware innovation encompassed inspirational talks by industry leaders, sessions by key innovators, a panel discussion, a product showcase, workshops, a DIY pavilion and makerspaces. Mr. Mohandas Pai and Vijay Shekhar Sharma, Co Founder Paytm, delivered the  opening address.

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InnoFest 2016 had over 1200 registered participants and showcased 150 products and innovations. The event featured 10 Workshops, 12 DIY Pavilion participants and 2 Community projects, wherein the audience could actively participate. Over 35 Speakers addressed the huge gathering of budding innovators, manufacturers, techies, entrepreneurs, students, professors, researchers and representatives from the financial sector. A significant number of participants were women entrepreneurs and innovators.

In his keynote and inaugural address Mr. Mohandas Pai, said, “More often than you think, innovations are stemmed from an idea that provides a solution to recurring and nagging problems that you may face personally. To translate that idea into a product and a business, requires an eco-system to support it and reach-out to the markets. InnoFest provides that platform and unlocks a plethora of opportunities. It is imperative that successful innovators need to foster other innovators and harvest benefits collectively. I’m elated to say that InnoFest is turning out to be a hub for innovation led entrepreneurs.”

InnoFest 2016 showcased exciting innovations such as a Sumo wrestling Robot, electric bikes, modular portable micro housing units, a 3D selfie maker, digital microscopy, 3D printers, pop up makerspace, farming tools, healthcare devices, education products, green energy equipment, environment related products were just the tip of the iceberg.

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InnoFest also had a host of mentors who were available throughout the day to have a one-on-one discussion with participants. A workshop focused on providing a clear understanding of Entrepreneurship for early entrepreneurs and novice entrepreneurs was a runaway hit.

A key element that innovators grapple with is Funding, InnoFest featured a session on funding resources for early stage Hardware Entrepreneurs, Crowd Funding, Challenges in obtaining Grants and Equity Funding.

With the Make in India movement gaining momentum a session on Building Hardware Businesses in India/from India, enlighten the participants.

Mr. Sharad Sharma, Co-Founder of iSPIRT and Convenor of InnoFest, said, “India is on the cusp of a business revolution. We are going to see a spurt in the manufacturing sector addressing basic human needs air, water and food. Today’s innovators are going to be the leaders tomorrow. Events such as InnoFest will be pivotal in providing a jump-start to budding entrepreneurs.”

The Patrons of this event were Mr. Amitabh Kant CEO, NITI Aayog; Mr. Jayant Sinha, Minister of State for Civil Aviation, Government of India; Mr. Nandan Nilekani, Former Chairman of Infosys and Former Chairman of UIDAI; Mrs. Kiran Mazumdar Shaw, Chairman and Managing Director of Biocon and Mr. Mohandas Pai, Chairman of the Board, Manipal Global Education.

InnoFest was concieved as a day-long festival of ideas and inspiration that will exponentially multiply innovation across the country and make India into a Product Nation. Our research shows that there is a need for a strong support ecosystem for hardware innovators similar to that available to software innovators. InnoFest seeks to bring together the multitude of partners needed to build such platform that encourages and supports grassroots innovators from ideation to realization to growth. iSPIRT strongly believes that a robust product ecosystem is the key to rapid growth across the country.

 

#IndiaInnovates

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iSPIRT announces the launch of InnoFest 2015

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      A ‘first of its kind’ marquee event to kick-start the next innovation wave in India, where

     Bengaluru takes the lead in showcasing Public-Private Partnership.

 

With iSPIRT, we are happy to announce the launch of InnoFest – a day long Innovation festival jointly organized and sponsored by Public and Private Enterprise. The event, to be held at the Indian Institute of Science in Bangalore on August 22nd 2015 is significant – in a daring break from a ’traditional event’ format, InnoFest shall be run as a festival celebrating Innovation…

Here is why…

India needs this movement; not only for Indians, but for the aspiring and emerging worlds’ 5 Billion people, as compared to innovations focused on the one billion in the first world, who are already well served. This is the only way India can avoid the middle income trap, as we grow at 7-8%. The vibrancy of grass root innovation cannot be experienced through speeches and panel discussions within enclosed halls; its energy and exuberance has to be felt and unleashed.

The Patrons of this event are Mr. Jayant Sinha, Minister of State for Finance, Government of India; Mr. Nandan Nilekani, Former Chairman of Infosys and Former Chairman of UIDAI; Mrs. Kiran Mazumdar Shaw, Chairman and Managing Director of Biocon and Mr. Mohandas Pai, Chairman of the Board, Manipal Global Education.

Speaking at the launch, Mr. Pai said, “The idea of InnoFest is absolutely aligned with the Government’s thinking. If we are going to increase productivity, employment and opportunity for everyone in this country then we need a grassroots movement that will bring the best ideas to the table. Our Prime Minister Mr. Narendra Modi has great vision in developing 100 smart cities across the country as well as a digital India and a leading science and technology program; innovation will certainly be a key driver for all these initiatives.”

Why Innovation, you may ask…

Simply because we have an ‘innovation’ deficit in the country today! We are no doubt an enterprising nation, but we still have a long way to go when we look at being an ‘innovative’ nation. However, please note that there is no shortage of imagination and creativity in India. We need to build our skills where this imagination and creativity is applied to generate unique solutions to local problems. InnoFest is the platform to tackle this challenge.

We strongly believe that to reduce the innovation deficit in India, we need to operate at two levels: the individual and the policy. InnoFest uniquely brings these two elements together:

  • The Young Ignited Minds: will sharpen their innovation skills in a fun and experiential setting
  • The Government of India: will activate thoughtful policies that will help fulfill the innovation potential of India

InnoFest will have various programs like MakerSpace, Product Zone, Hall of Fame, Young Innovators Zone, Townhall and eminent speakers across a galaxy of disciplines including Naveen Tiwari (InMobi), Rohan Shravanan (Notion Inc), K Ganesh (CEO, Portea Medical), Arundhati Nag (Film Personality), Vijay Chandru (Strand Life Sciences), Bhavish Aggarwal (CEO, Ola Cabs) and Phanindra Sama (RedBus).

According to Sharad Sharma, Co-Founder of iSPIRT and Co-Convenor of InnoFest, “If companies can innovate and transform their functioning and performance radically, why can’t countries? The idea of InnoFest is to distil the best ideas in enterprise and inspire individuals, corporates and Government organizations to take innovation to the common man. We are delighted that the Government has stepped in in a big way to enable this transformation and this cooperation between public bodies and private enterprises will lay the foundation for radical transformation in the country.”

InnoFest has been conceived as a day-long festival of ideas and inspiration that will exponentially multiply innovation across the country and make India into a Product Nation. iSPIRT strongly believes that a robust software product ecosystem is the key to rapid growth across the country. More than 1,000 professionals are expected to participate, pan India.

So, if you want to change the world AND put your own dent in the universe; make sure you are at InnoFest !!

Further details of the event are available on the Innofest website & FAQ’s can be accessed here.

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Innovation Is Saying No To Thousand Things

At ShimBi Labs, simplicity is the biggest motivation for us, and it reflects in our people, office and our products too.

I developed the appreciation for simplicity from Steve Jobs and the product he created at Apple. Simplicity works because the world is so complicated, and when you do something simple, it stands out.

People need a good product with advanced capabilities and high usability, but you need to make that in a simple way. Customers love simplicity. With the simplicity, they feel an emotional connection with the product. And it is important for any product to success.

Many a times people are confused about their needs and desire for lots of features in products they buy. They find it difficult to control that desire for many features and end up buying complicated products. After few days, they simply stop using those products and move on to other. As a product developer, we must educate customers and provide them option to try simple products that just works!

Innovation is saying no to a thousand things – Steve Jobs

If people are attached to the product, they will keep buying it or upgrading it. If people love your product, they will tell their friends and family about it.

Do fewer things but do it better. Your product should make customers life simple; it should amaze them every time they use it.

Unlike Dell and HP  that gives 100s of PC  & Laptop choices, Apple kept it simple with just 4 Mac choices! Two choices each for home users for Pro users. Apple made selection and decision process simple for customers.  And Apple makes more money than Dell and HP combined.

Perfection is achieved not when there is nothing left to add, but when there is nothing left to remove – Steve Jobs

But being simple is not simple, being complicated is really simple. Don’t do anything, and everything will turn complicated.

Simple can be harder than complex. You have to work hard to get your thinking clean to make it simple. But it is worth it in the end because once you get there, you can move mountains – Steve Jobs

At ShimBi Labs, we take one problem and build a simple product around that it that just work. We work to amuse the customers.

Let me know what is your thoughts about Simplicity?

Guest Post by Siddharth Deshmukh, Shimbi Labs

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DNA mysteries of Products and Services

It has been an interesting coincidence on the last few occasions in different discussions and industry forums I participated in, they have attracted a good amount of the classic “Products and Services” in IT deliberation. As such, this is not a new debate. It is common to see patrons from the products world root for it by generating IP and for the services gurus illustrate how they are able to tailor deliveries as per customer need to make good revenues.

In the various roles that I have been involved in be it front line sales, to working with target customers, to addressing markets through the channel, or driving product management for products of different types right from enterprise to small and medium businesses that are deployed on-premise or delivered as a service; I have realized it is more than “this versus that”. At the face of it, running “product or services” businesses largely seem to be two different ball-games. They do have different DNAs. However, in addition to the different focuses that are essential on some aspects; these also involve some common influences that need to be capitalized upon. And no, it doesn’t end there. An important element of success viz the customer expectation is undergoing an interesting shift. A customer increasingly expects…a solution! They are neither looking for a product or a service in isolation, but instead for a solution that delights and delivers timely value. In this post, we will explore the characteristic differences—the DNA differences between IT products and services; and some common factors that have a bearing on the business opportunities and performance.

The landscape—A holistic view

Let us start with a holistic look at some key characteristics of what constitutes a product and a service. The marketplace typically includes an offerings continuum. At one of the two ends are pure-play products and at the other pure-play services with combinations in between. It can be illustrated as below:

Offerings ContinuumThe DNA differences—A closer look

If we take a deeper look and closely evaluate this in context of IT products and services, around which this post is primarily focused, it involves some common influences, but with distinctly different DNAs to run both businesses. The evaluation of key indicators across these businesses includes consideration for common factors, but with different approaches. For instance, both product and service type of offerings involve evaluation and use of technology, assets and resource planning, cultural bearings and so on.  A comparison of DNA differences for some key indicators is included below:

Product-Services-DNACommon influences—A quick digest

As we can see, there are some distinct DNA differences. For instance, meeting a market need versus single customer requirement; transactional approach versus relationship driven, internally focused culture and processes versus tailored to customer. At the same time, aspects like technology, people, and processes are the common influences that can either enable or inhibit effectiveness in either model. They serve both as an opportunity and a challenge! The previous section has covered how the approaches vary across indicators. Let us now briefly assess the common aspects that can greatly influence outcomes.

  • Technology: Technological advancements are constant. With every technological paradigm shift, right from main-frames to distributed systems to the cloud, with the change in technology capabilities available, businesses have looked at methods to leverage these for maximum benefits. So for a provider, irrespective of the nature of business, they have to constantly find ways to stay abreast of technological advancements to be in a position to lead the market or advise a customer with right solutions. For instance, if we take a look at one of the hottest shifts around SMAC (social, mobile, analytics and cloud), it is not prudent for either product or services companies to ignore those. Products need to evolve to cater changing customer preferences, interaction methods and deployment models. This is not just limited to product companies. These shifts need service companies to ensure their offerings weave these in to truly to ensure customer delight in-line with newer preferences.
  • People: One of the most significant contributors to the success of any business is the people assets they have. Knowledgeable, motivated, productive and enlightened workforce is needed for runnnig both products or services successfully. Ensuring the workforce it kept current with the market and technology demands and on the soft side ensuring they’re productive is of paramount importance. This of course is an obvious one. But going wrong with this could have the entire game go south even if all else is right.
  • Process: Processes are a great tool any company can have through which preferred frameworks can be pressed into action for a more consistent and repeatable outcome. These could be applied to internal focused activities like training and development, knowledge sharing, documented development methodologies (e.g. Agile, etc.), sales methodologies and so forth. Processes can help with managing OpEx for both frameworks. Similarly, they’re applicable even to external focused aspects like processes to demonstrate thoroughness of approach, for compliance and so forth. How far to adapt really depends on appetite and culture; which varies from company to company.
  • Success factors:  While the measuring metrics might differ across lines of business, it is a fact that there is no better way to walk towards success than to be driven by results that ensure customer success and delight. This is an essential metric to keep track of that cannot be overriden or ignored in either business.

Looking at all of above, one can think of products and services as two separate circles having distinct DNA differences with some overlap of common influences. All of these put together, put organisations in a position to meet the need of tomorrow. Let’s take a look at an illustration that highlights these put together:

Product&ServicesThe Ultimate structure—Solutions shift

At the same time, given the economic challenges, the markets becoming buyer markets, general shifts in buying patterns, need to respond to businesses faster, and need to demonstrate value and return on investments (ROI), the focus is increasingly on the “customer” than just a product or a service that is up for offering. Customers today carefully evaluate every penny being spent. They expect to realize value from investments faster. Customers are tired of siloed approaches either by just having a product deployed and not having a working solution, or having a solution frame-work, but the underlying products not being stitched to deliver the value the customer expects from the investments made. Gone are the days where companies could deploy a product and take months or even years to tweak it to customer need. Or suggest a service without having their own skin in the game when it boils down to technology or products involved.  Customers today expect product companies to not just deploy a product, but to provide a working solution tailored for their needs. Customers today expect services companies to have the required levels of expertize, coordination and relationships with involved products and technology stacks, to effectively tailormake a solution to meet their needs faster. They do not expect the ball to be dropped in either of the cases to have prolonged deliveries. Customers today are looking for working solutions. Customers today are looking for faster realization of value. Customers today are looking for a positive experience to respond better to business needs rather than being tied up with large IT projects. They need to be delighted—truly!

The shift is really towards using products and services together effectively to deliver effective solutions. Irrespective of their primary DNA, every company will need to evaluate how they can work out the entire DNA strand to have a solutions structure!

The new shift focus

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Patent Holders Listen Up; The Government Wants to Give You An Award

India’s innovation problem is not something that an award can fix. But its a step in the right direction. The department of science and technology is calling applicants for the “National Awards for Commercializable Patents,” in a bid to make more innovative products available to the society [source]. The awards were first introduced two years ago.

The program seeks to recognize the innovative potential of Indian Nationals as well as Micro, Small and Medium Enterprises (MSMEs) who have developed innovations relevant to the industrial and societal needs.

The award will carry a sum of Rs 5 lakh and a certificate. Selected innovations may be also get an additional Rs 5 lakh on commercialization of the awarded patents. The selected innovators will also get to use the the TREMAP, a government initiated innovation program.

The primary objective of the program is to help commercialization of patented technologies and will give a greater emphasis to those that have good commercial potential but could not be commercialized due to lack of resources and expertise with the inventors. The other objective is to establish an enabling ecosystem in the country to facilitate linkages of the innovative technologies with market.

Any Indian national or micro/small /medium enterprise who already has an Indian patent can apply. The year of grant of patent should not be before the year 2010 and the working prototype should be ready.

In 2012, the award was granted to 8 patent holders including the ones that held the patents to improved grinding machine for paste and powder making in wet and dry condition of soft material and device for mitigating shock waves and induced forces during explosions.

The last date for receipt of applications is August 14, 2013 and more details and the forms can be found here.

The central government has also implemented a five year scheme through which small enterprises can claim up to 50% of patenting costs from the Government.

There are various reasons why commercial innovation is really low at Indian institutions. Deepam Mishra, CEO, i2india Ventures lists out factors including wrong incentives and lack of early stage investments among others. Hopefully, these initiatives will help at the early stage.

Reblogged from NextBigWhat.com

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Designing Great Products: A Startup CEO’s perspective

I had the opportunity to attend iSpirit Foundation’s #PNMeetup: Design great products through experiments – Product Leadership Workshop on 20th April 2013 at TLabs in Noida. 

Avi from iSPIRT put together a delightful, half-day session that brought together a smattering of product people from Delhi-NCR region.  In addition to product managers, CEOs, and senior executives from a wide range of Delhi startups, the icing on the cake was the presence of a hard-hitting product team from Intuit that had travelled all the way from Bangalore to share their experiences with the assembled audience. The Intuit Team included Deepa Bachu (Director, Emerging Market Innovation at Intuit), Samarjit Ghosh, Lalitha Ramani, Vivek Vijayan & ThiyagaRajan ) 

The Intuit posse had experiences working on a variety of products from the uber-popular Turbo Tax to the socially relevant Fasal and an engaging discussion on their diverse experiences exposed the audience to a wide range of challenges that the Intuit teams faced and the teams’ approach to overcome these challenges.  Many an aspiring entrepreneur has been flummoxed with multiple questions vis-à-vis product development, not limited to prioritizing features, costs, and release cycles and the Intuit team cleared a lot of misconceptions around commonly accepted best-process with their highly structured product management approach.  Intuit’s product management model is largely based around the hypotheses driven approach that, in addition to software development, is the bedrock for business decision-making from optimizing scientific discoveries to underpinning most strategy consulting engagements.  We were walked through a detailed explanation of the Intuit way and were then led to put our newfound knowledge to task with an actual exercise on the streets.

The hour spent on the streets by 25 eager entrepreneurs, braving the Noida summer-heat led to the thread baring of multiple, seemingly unambiguous truths about how we thought about product research, design, and development.  The interesting aspect of the exercise was that that like many frameworks, the Intuit approach brought out its share of naysayers and skeptics among the assembled audience but the healthy discussion that followed enabled multiple perspectives to heard and discussed. 

 

As a startup-CEO at Studycopter, managing the product development process is an integral part of what I do, day in and day out.  Sharing of notes and perspectives with fellow CEOs and product managers was a unique opportunity for me to test my assumptions and build a new way of looking at problems and coming up with solutions. 

I can write with a reasonable degree of certainty that all participants would share my thoughts about the utility of the aforementioned session and moving forward, I look forward to the Studycopter team and I participating in multiple such meetups to build the intellectual rigor that would be critical in delivering breakthrough product experiences for our customers.

Guest Post by Adi Jain, Founder and Chief Awesomeness Officer at Studycopter, a mobile + online learning platform to enable students to get their best possible scores in competitive exams such as the GMAT and GRE.  

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The Great Facilitation ballgame of Multi-sided Business Platforms

Let me start with a simple question. What is common among these, as of 2006 (and, for that matter, even as of today)?

– Visa
– Sony Playstation
– Orbitz
– NASDAQ
– Microsoft Windows

All of these are known examples of facilitation based multi-sided business models. These are not just products or businesses; these are platforms, in the true sense of the word. These platforms have, some even in industrial and so called traditional businesses, created value by “facilitating interactions & transactions” among various groups involved. They depend on network effect to kick in, and then thrive big time.

The concept of the two-sided markets is not new. In fact, the newspapers might have been among the first to exploit it, through low-priced subscription subsidized by the sponsors paying for advertisements.

Networking Events and conferences have been a great example of a non-tech two-sided platform, and they are sold on the same direct benefit as well. The sponsors subsidize the participants’ fees, and hence get presumably higher visibility. Participants get to network; sometimes get direct information or sales leads; and pay for it unless in some cases, fully subsidized by the sponsors.

However, these business models, as represented by the examples above, were still very few & far in between until few years back.

The business world, since, has changed. And, drastically so!

Google and Apple have become the most valuable brands in the world. Amazon, that revolutionized the Books & Publishing market through the e-Commerce strategy, has since transformed itself into a Platform company. Facebook, Twitter, Instagram, and recently Pinterest have become the household names, beyond the tech world. Travel, Hospitality & Commute have become well-integrated platforms driven businesses – driven through online technologies and ground-level operational integration.

HOW SONY FALTERED, AND HOW APPLE & GOOGLE PROPELLED

Let’s take an example of two companies that seem to be very similar on products stack otherwise. Apple and Sony. Sony actually brought upon the concept of music that you could carry, with its revolutionary Walkman. Apple came in very late, with iPod. Sony has had a premium quality tag in computing machines (with Vaio) for a long time, while Apple’s Mac slugged it out in its own creative/designer/geek space. Sony even had the earliest starts with its Reader as long back as in 2006! They even had a great idea of Reader being the platform, and got the leading publications in Japan to take note that time. Sony, a very relevant company even today in tech world with the quality and huge brand image to boot, (interestingly, it has had at least one product in platforms category in Playstation) has fallen to 31-Year lows. They continued selling products in silos on their own standalone benefits. They are a product company, still a great one, but that doesn’t seem to be enough!

On the other hand, Apple had an iPod – as a standalone “take your music with you device”, around 2001-02. With iTunes, it took the first steps into a platform around 2003. However, it has since transformed into a true platform company, with its formidable all-integrated business strategy that brings together computing, entertainment, and business. iTunes is a comprehensive AppStore, and not just a music store. Apple is a multi-dimensional company at its best – it brings multiple beneficiaries together in this multi-facets products business. iOS developers and Applications users. Musicians, music companies and Music lovers. Local or global businesses and their customers and fans. We’ve even started seeing the serious Enterprises making Apple devices the central to their CoIT (Consumerization of IT) and collaboration strategy. iPod, iPhone, iPad, Mac, iCloud – they sell products but they’re a platform! And, in Feb 2012 Apple became the most valuable company in the world!

Google is an obvious name in the multi-sided platforms strategy. They took forward the newspaper ads model and applied it to search beautifully. And now, with the Enterprise businesses as well as their ever-growing list of vehicles – in GMail, Google Apps, Android, Chrome, Maps, Drive, and so on – have established themselves as an formidable Multi-sided platform. At this time, there doesn’t seem to be a limit on what vehicles Google can choose to drive their platform strategy. Microsoft is now fighting it out on its own turf while Google and Apple make inroads into its huge Enterprise foothold. (This also points to another trend that I’m planning to write about – the blurring of lines between Business & Personal Technologies).

SO WHAT?!

This era clearly belongs to the multi-sided Platforms based business. It’s important, however, to not confuse this with the traditional definition of platforms in technology space. The true business platform is the one that is driven by facilitation and network effect, and which actually has multi-sided business model in the sense of heterogeneous set of beneficiaries that are not directly connected to each other. It is also important to note that this disruption has been caused not only by technological evolution, but also the interlinked effect of the other disruptive patterns such as “Long Tail” and “Free”, both terms made popular by the very respectable Chris Anderson. I will touch upon these in the next couple of posts as noted in my cover post on Game-Changer trends.

If you’re in a business – whether technology or not, whether e-commerce or not, whether products or services – don’t ignore this trend. Think about how you can leverage on this model, or be part of this ever-growing multi-cog machine that benefits all its gears. But, if you really think details, it’s not just a marketing gimmick, and it’s not just a tweak in the product. It should become the foundation of how business of your product is conceived, strategized and operationalized.

PS: This post originally appeared on my blog, but I thought it’s worthwhile to post it here. Very relevant, hope you find it too!

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Building Innovative Products Out of India: Lessons from Bell Labs India, CDOT, Cisco, Concept2Silicon and Ittiam

What will it take to build an Apple or Google out of India? This is a question we often ask, and you might recall that I gave one perspective on this in my Outlook Business column some months ago.

Sanjay Nayak of Tejas Networks has devoted the last decade to building high tech telecom products out of India. He is passionate about building a supportive product ecosystem in Bangalore/India. So, when he invited me to moderate a panel discussion on “Fostering an Innovation Economy in India: Issues, Challenges & Recommendations” at the IEEE ANTS 2012 conference at Bangalore last week, I jumped at the opportunity.

We had great participants – Vishy Poosala of Bell Labs, VVR Sastry of CDOT (former CMD of Bharat Electronics), Srini Rajam of Ittiam, Satya Gupta of concept2silicon (and present chair of the Indian Semiconductor Association), and Ishwar Parulkar of Cisco, I had requested each participant to start with a short account of a successful innovation project they had been associated with in India, and what made it work. Since we hear so much about the obstacles to innovation in India, I thought some bright spots may offer ways around these.

And, a real treat followed as we got some insightful examples from all the speakers.

Vishy Poosala – Alcatel Lucent (Bell Labs)

Vishy started by describing an interesting phenomenon his team noticed. Rather than download songs legally available through mobile service providers, mobile owners preferred to buy songs from a corner store. The obvious reason was cost – it’s much more expensive to buy songs “legally.” Why do downloaded songs cost more? His team found out that the reason for this was that the service providers had congested networks, and therefore did not want to promote downloads that would congest their networks further. Bell Labs India proposed a solution to this problem – a “Mango Box” which could push content to users at off peak times when there was no congestion, and hence songs (or other content) could be sold cheaper. While they managed to commercialise this product in India, revenues were never big enough to excite AT&T. Ultimately, “Mango” got traction when it was deployed in the US for use on AT&T’s iphone network. The lessons? Address local problems, but look out for global problems where the same solution can be applied.Vishy mentioned that AL ventures, an internal venturing arm of Alcatel Lucent played a key role in making this cross-fertilization happen.

Srini Rajam – Ittiam

Srini went next. Ittiam has completed a successful decade of a focused IP play. It earns all its revenues from licensing IP it has created. In 2009, Ittiam identified that the then smartphones did not have the capability to play HD video. Creating that capability was non-trivial because it involved change in the software architecture and working with both handset and silicon players. There was a window of opportunityopen, and Ittiam sought to address this by quickly creating the IP, filing a patent and then working with the players to implement it. Not only were 10 million phones incorporating this IP sold in the first year, one of Ittiam’s major clients highlighted the HD video playback in its product marketing collateral. Based on this experience, Srini stressed the importance of innovation as a process – the spark (idea), followed by implementation, and then business impact. Clearly, as in the Alcatel Lucent case, choice of the product is key as well.

VVR Sastry – CDOT

After CDOT’s pioneering efforts on switching for rural exchanges in the 1980s, CDOT disappeared from public imagination. While it has continued to be involved in strategic projects, it’s no longer “visible.” Sastry of CDOT gave one example of how CDOT is trying to change that. Mobile base stations are power guzzlers and are already being targeted by environmentalists for their high carbon footprint. At the same time, rural call rates are not always high, and rural cellular infrastructure is under-utilized. CDOT is trying to solve this problem through shared GSM radio. With the regulators possibly allowing spectrum sharing, this could be a way for better utilization of rural cellular infrastructure. While admittedly a late life cycle product with an emerging market focus, this has the potential to lower costs yet provide multi-operator service in rural locations. Sastry stressed “right product at the right time”, providing a “total product concept” and keeping up the motivation of engineers.

Satya Gupta – Concept2Silicon

Satya Gupta’s company Concept2Silicon is just 3 years old. He encourages innovation through Friday brainstorming sessions. He stressed the importance of aligning new product ideas with needs and timing. In particular, he underlined the importance of aligning products to local conditions and price points. He outlined one important opportunity. Education is rapidly shifting from the traditional classroom to electronic media. But the electronic media used in the classroom are not interactive and don’t allow the teacher to adapt/change content or modify / add comments easily. Interactive whiteboards are available, but they are imported and too expensive. This is an area where Concept2Silicon sees product innovation opportunities.

Ishwar Parulkar – Cisco

Ishwar is the CTO of Cisco’s Provider Access Business Unit in Bangalore. He shared the highlights of the ASR 901 router, the first product developed end-to-end by Cisco in India (see my earlier post on this project for more details). Defining what product to build in India was critical – they chose a router for access providers (= mobile service providers) not only because this was a relevant market in India but also because this was not a core segment addressed by Cisco’s existing products. Scale, reliability and monetization were 3 key criteria for Cisco. To build the product in Bangalore, Ishwar’s team had to persuade vendors to enhance their local capabilities. They also had to transfer knowledge in certain areas like certification. Thus product development efforts involved building a local ecosystem. The third element was creating an appropriate organizational and operational model – there were 3 stages: an incubation stage (under the radar) till a concept could be proved, a stage of scale up with “borrowed resources,” and a third stage of mainstreaming with more funding.Today, ASR 901 has a market not only in India, but across the world.

Fostering an Innovation Economy

In the discussion that followed, several interesting questions came up which addressed the larger theme that Sanjay had identified for the session:

1. Will India be restricted to “late in the life cycle” or niche products, or will we be able to come out with genuinely new products?

2. What needs to be done to improve the innovation ecosystem?

3. How does India compare to China on the innovation front?

4. How can we improve collaboration between academia and industry?

5. How can we enhance the economic dividend to India of innovation activities here?

Most of the comments in response to the first question identified the usual obstacles to creating really innovative products from India: hierarchy in Indian society (vs. the questioning attitude required to do genuine innovation); fear of failure; the education system; and inadequate private sector investment in R&D. There was agreement that many of these things are changing, and the future looks optimistic. But the slow growth of private sector R&D investment continues to be an issue of concern.

Satya Gupta had some very specific and relevant suggestions on improving product innovation. His own experience in his company has been that even the components required for product innovation are not easily available, and often need to be imported with delays of upto 3-4 weeks. This slows down the innovation process, and also demotivates the innovator. He called for the setting up of resource centres – he called them ESDM innovation centres – that are fully equipped and ready-to-use for experimentation. This will help start-up entrepreneurs quickly try out new ideas.

There was broad agreement that China has been able to do several things on a scale that India is unable to even dream of – these include development of infrastructure, education in science and technology, funding for start-ups etc. China has a strong desire to dominate telecom and has therefore supported the creation of large corporations like Huawei and ZTE. In contrast, India lacks a strategic orientation, is unable to spend the R&D money committed because of cumbersome bureaucratic processes, and is no longer even the source of the largest number of graduate students abroad.

Regarding academia-industry collaboration, speakers pointed to the incentive systems in Indian academia that appear to favour academic research resulting in papers and do not give importance to industrial R&D. A specific example was given of a person with considerable international corporate R&D experience who was denied a job in one of the IITs because she did not have adequate research output (=papers in journals).

The fifth question – economic dividend for india – prompted an interesting discussion around value capture in the innovation process. Sanjay Nayak wondered aloud whether Indian companies need to invest more in marketing and branding if India is to capture more value. There was a broad agreement that collaboration was key to improving the economic returns to India – and that even multinational subsidiaries in India may gain from collaborating with each other rather than trying to “sell” their innovations to reluctant managements in the developed world.

Does innovation have to be a struggle? Or can it be the mainstream of a company’s activities? Many speakers pointed out that innovation involves change, and most human beings don’t like change. Hence innovation will always involve overcoming obstacles. Ishwar pointed out that even in Apple, ideas are hard fought. But I felt that companies like 3M, Google, and our own Titan have shown that innovation can become a more routine activity of the company.

Conclusion
I see confidence in our abilities to innovate from India growing, and that’s a good thing. There is a new generation of innovation evangelists returning to India (people like Vishy and Ishwar) who are determined to make things happen here. At the same time, we have people like Srini and Sanjay who have shown that good innovation can come out of India and that it’s possible to run innovative companies here. Of course, it’s not easy, but I see the formation of a critical mass of people who know how to make innovation work. Let’s hope a lot more people get inspired by their examples in the days to come.

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

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

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

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

Appropriating Value from Innovation

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

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

A Historical Perspective

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

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

Where do we stand today?

Information

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

Procedures and Process

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

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

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

The Law Itself

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

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

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

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

Awards & Enforcement

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

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

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

Conclusion

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

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

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

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Why aren’t more developers creating serious Mobile App Products?

Mobile Apps

These are the times, when every third person that you meet in Technology world has an idea for an App. It could be every alternate person if you’re hanging out in geeky groups or among heavy Smartphone users.

The Industry trends suggest a phenomenal surge as well. According to Gartner, Mobile Apps Store downloads worldwide for the year 2012 will surpass 45.6 billion. Out of these, nearly 90% are free Apps, while out of the rest of 5 billion downloads majority (90% again) cost less than $3 per download. This trend has a strong growth curve for the next five years. (See Table 1. Mobile App Store Downloads, courtesy: Gartner) 

Another report suggests that 78% of US mobile App Companies are small businesses (based on the Apple and Android App Stores based research). The typical apps that dominate this market are games, education, productivity, and business.

Mobile App Store Downloads - Gartner 2012

This comes as no surprise. There is a huge divide between the Enterprise Mobility (dominated by the Enterprise Architecture, existing platforms and mobility extensions to the platforms that ensure business continuity) and End-User (Consumer) Mobile Apps dominated by the App Stores supported Small and Mid-size App Development Companies. The barriers to entry in the Smart phone Apps Market seem pretty low with the supporting ecosystem from Apple, Amazon, Google, and Telecom carriers.

However, let’s get back to the fact that majority of these Apps “do not” generate direct revenue.

While the entry seems without barriers, there are multiple hurdles on the race track:

1. Developers need to focus on the User Experience. The smartphone apps pick-up is highly skewed toward Apps that offer a good user experience even for minimal functionality. After the initial success, the App makers end up adding functionality for sustained interest, but the User Experience tops. It’s difficult to focus on UX while still trying to do everything right at the underlying architecture level for long term.

2. Marketing is important. Getting the early eyeballs is key for the App developers. Any serious App needs an immediate initial take-off, and among the things that they need to do to make it happen is to market the App beforehand and to get the authoritative reviews in place.

3. Initial Take-off is just the first hurdle. App needs to be able to handle traffic bursts, it needs scale with increased traction, support virality & social connects inherently, and also build an effective User ecosystem. None of these may seem like the core functional features of the App, but are most critical for the broad-based success.

4. The Freemium model is very popular, but it can kill the business if the marginal costs are not sustainable. The paradox of the Free model is that unless the 10% paid users are able to pay for your 100% costs, every additional user takes you closer to the grave. With this come in two questions – how do you keep the infrastructural costs low, and how do you build additional revenue models around the app.

  • IaaS can solve some of the infrastructural headache, but doesn’t provide you with the other functional layers that every App needs. You need to still build them. PaaS providers provide the scalable platform for building Apps, but you still need to build some of the functional features such as Gaming Rooms support, Messaging, User Authentication & authorization models, and so on. Mobile developers are still doing a lot of repetitive work across the smartphone Apps that can be consolidated into a framework.
  • Supporting the additional revenue models require integration with external Ad-services, Payment systems and more importantly the bandwidth to deal with this even more fragmented set of agencies.

5. The End-point device platforms are fragmented and getting even more so. A typical model for App developers is to develop an Android App, iOS App or a Windows App and then support the other platforms as they go along. However, keeping up with these multiple platforms is only getting more and more difficult with the speed with which Apple, Microsoft, and Google keep rolling out the OS. There’s tremendous pressure to release the App within the 1-3 days window of the release of the underlying platform.

Hence, while there are millions of people developing smartphone Apps as we speak, there are only a fraction that get built at serious level, and even smaller fraction that gets built for sustainable business success.

And considering these hurdles, the arrival of the Backend-as-a-Service (BaaS) is a blessing for the App Developers. Forrster’s Michael Facemire refers to them as “The New Lightweight Middleware”. He goes ahead and lists out some of the basic tenets of what makes a Mobile Backend as a Service, but I see this list evolving as the vendors offer more and more functionality to the customers leading to en ecosystem.

And the term “ecosystem” is going to be the key. That’s because a successful mobile App doesn’t stop at the user starting the app, using the app, and leaving the app. A successful App creates an ecosystem for the viral growth, user engagement, social functionality, in-built broad-based connectivity for multi-user interactions, and more importantly the ability for cross-platform usage. In a Gaming scenario, the user interactions and the relevant immediate feedbacks are paramount. Most successful apps build an ecosystem. Instagram, 4Square, Pinterest are the common household examples today.

ShepHertz App42 Cloud API is complete backend as service to help app developers develop, buid and deploy their app on the cloud.While Michael lists out the usual suspects in his post, most of them in the Silicon Valley, there is a very interesting player in Shephertz’s App42 platform, right here in India. The ecosystem approach that they have taken seems pretty much what may be required for serious app developers that need a robust backend provided as a service, so that they can focus on the app functionality, user experience, and more importantly the marketing aspects of the App.

Now why, still, aren’t more and more developers building even more serious mobile App products? Why shouldn’t they be? I think, they will!

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Product companies will constantly change business plans, product ideas, and offerings to meet the ever-changing market opportunities, Piyush Singh, CIO, Great American Insurance Co.

Piyush Singh is the Chief Information Office (CIO) and Senior Vice President at the Great American Insurance Company—a property and casualty insurance company, and Vice President of it’s parent company, American Financial Group [NYSE:AFG]. Under his direction and vision, Great American’s IT department has transitioned from supporting a legacy IT environment to become a trusted player in the company’s business success—offering agility and adaptability to align with the executive vision. In this interview, Mr. Singh shares his observations on innovation in Indian software companies, product development, and how large IT companies could accelerate the pace of product innovation. 

Piyush, you have been watching the Indian software industry over a period of time. What are some of the changes you see now especially in the context of the software product industry in India?

The Indian software Industry is the envy of many countries around the world, and numerous governments and business associations have been trying to emulate its model. It has made a significant difference in elevating the professional services job market and provided the necessary fillip to the country’s infrastructure—transforming sleepy suburbs into high-tech cities with world-class facilities. The Indian software Industry contributes $67B to the economy in direct revenue, but delivers a bigger economic impact (probably tenfold) when you think of all the tertiary employment it generates and the indirect revenues created.

Yet, this phenomenal growth has been a result of labor pricing arbitrage, and many of the large companies that lead the software services are today challenged by lack of innovation and intellectual property (IP). Yes, outsourcing and large services contracts are definitely attractive but unsustainable in the long-term. Sustainable growth and maintaining unique value propositions demand significant investment in IP—and this needs to be more than just systematizing processes. I do not see IT services companies investing in actual development of product portfolios that might address vertical markets or provide horizontal solutions. Typically, I see global services brands create deliberate pools of internal innovation that harnesses the knowledge of its workforce or buy IP-based companies to provide them the necessary scale for reach and investment. So far, I’ve seen neither processes here, but am hopeful that this will change.

Culturally, do you think Indians (and this is very broad considering our diversity) are risk takers and willing to start out businesses? Or are they averse to taking risks?

I don’t think so, and there are numerous examples of our appetite for risk—numerous Indians in the Silicon Valley have taken their start-ups all the way to public offerings. What I have noticed is, we tend to invest in real estate—really investing for the long haul.

Today, I find ourselves increasingly accepting entrepreneurship and its risks, even as senior executives leave large corporations to do something more meaningful, and different. But these new companies will need significant capital and gestation periods before they begin to show results. This is in contrast to the services industry growth that sets an average 20-30% growth every year—leaving start-ups struggling to showcase such growth. The risks and returns are completely different in a product company—Oracle, SAP, Microsoft, Apple are all shining examples of IP-led revenue-generators. Their valuation and market sizes are incredibly spectacular. But they didn’t grow into such successes overnight.

Product companies will constantly change business plans, product ideas, and offerings to meet the ever-changing market opportunities. These evolutions take time, effort, and capital—ask any Silicon Valley venture capitalist.

On the other hand, if you read the balance sheets of many of the services firms, they have idle cash, and great market reach. It will be a win-win for all if they use the cash to fund or accelerate the incubation of products that they can take back to their markets.

What is your take on emerging companies in the product space? We see, for example, many of them are developing apps and very few seem to be venturing into the enterprise or B2B space. Do you agree?

I agree completely. In the insurance space, for example, of all the companies out of India I’ve worked with, only a few have made any real IP investments—MajescoMastek, PlanetSoft (acquired by Ebix), L&T Infotech, and Mphasis. But if you see the revenue portfolio of the top 200 services firms out of India, the financial services industry is a leader in driving investments. And only a handful companies have made any IP-led investments. Strange, don’t you think?

What’s interesting is that it’s not that India doesn’t have the talent: every large US-based company (Microsoft, HP, Cisco, IBM) have a lot of product development out of India. The capabilities and talent definitely exists—we need the larger Indian companies to show the way.  They should make use of the talent that exists in their own setups, sponsor ideation, build incubators and make a directional investment in product development. They should stand up to explain their actions and the promise it holds. Analysts might not like the idea initially as it does not fit in their current forecasting models  but as they realize the potential and see results over time, they will warm up to the concept and probably push for higher investment. I would argue that Indian companies do bring in a lot of process expertise in any project that they manage, so  they can definitely build processes that would seek ideation and lead to valuable IP.

What’s your view on innovation in the Corporate environments?

Innovation has become a necessity for existence. As Robert Murdoch, Chairman and CEO of News Corp aptly said, “The world is changing very fast.  Big will not beat small anymore.  It will be the fast beating the slow.”  Innovation is being taken out of R&D labs and becoming the fabric of the entire company and an integral part of the culture at all levels. If it’s not happening, it can hurt them. Look at what’s happened to Kodak—they invented the digital camera concept but now the only value left is in the patents which they filed.    Blackberry (RIM) is facing a similar situation – in May of 2008, of the corporate companies surveyed 82% of them were looking at buying RIM based Blackberry’s.  Their lack of innovation in the world of user experience design has left them in a situation no one wants their company to be.

Do you think a major contributing factor in the last couple of years has been contributed by bandwidth availability, relatively easier capital and technology disruptions from areas like cloud computing? Have these leveled the playing field?

Well, these not only level the playing field but also give you an opportunity to differentiate your offering. For example, cloud computing levels the playing field, making it a lot easier for people to invest in or explore new products as long as you provide open integration points,a level of flexibility and a blueprint for future innovation. Commoditization brings prices down but forces you to decide on the USP that would help your company stand out.  You need to balance commodity with strong uniqueness so you can leverage both benefits. People who are going to be nimble and fast, and people who respond to these paradigm shifts are going to emerge the winner.  The key lies in how quickly you react to market forces and how adaptable you are. Any country that can produce a model of constant adaptability becomes a much more stronger player in the long haul.

Five years ago a typical software strategy didn’t take into account elements like user experience design, predictable analytics/big data, mobility and enterprise social networking. If you’re a ten-year old product company or a large services firm, it’s a little tougher to make a shift to embrace these elements. If you’re a smaller company though, and you’re nimble and watching these trends closely you can adapt to them quickly. It depends on how leading edge you are, because people are always talking in the context of ‘now.’ Mobility has been on the forefront since early 2008—but companies are still exploring mobile apps. Big data has been there for 3 plus years—but how many people are truly exploiting the value of this data? Enterprise social networking helps companies capitalize on people, collaboration and sharing better. It provides individuals more command and control—if the person at the lowest level comes up with a bright idea, everybody knows who to give credit to!

So you Piyush – if you had to give some advise to product companies or people who are venturing into the software product element India, what would you say?

  • Identify a domain where you see that there is market opportunity and don’t look at what is currently being offered as a solution.  Try to look 3 years ahead and try to build it around the emerging model of doing business—it’s about how you’re going to do business tomorrow, not how people work today.
  • You’ve got to balance domain expertise with people from outside so that you can think differently. You can’t have people who think the same way all the time. You need to understand how to incorporate User Experience Design—making people react and say “It is obvious.” Product companies have the advantage of disrupting the existing ways and changing the model—that’s what DELL did with PCs, Amazon with the book store, and Netflix changed movie watching at home.
  • You should be willing to find a charter partner who can help you to bring about change and  break the current paradigm.  Once you have this, you’re on the path to building a product that will succeed.
  • Don’t just be happy with what you have and what you build. You really have to be dissatisfied with the present and galvanize resources into action. This requires a fundamental shift in the group mindset, how we operate and how the company is structured. We need to learn from the old Chinese saying ‘let a thousand flowers bloom’ – not just the management ranks!
  • Don’t make random calls and hope that there will be sales. Learn the market, understand the potential buyer fully and then target with laser focus. Do not take a shot gun approach and hope that it succeeds.

Which 5 product companies or fields are you interested in meeting?

I would rather choose three fields that are of interest for me:

  • Companies that are working in the insurance sector – what are they doing and what’s innovative
  • Companies involved in infrastructure–what are you doing to improve the end user experience/reliability and availability in the modern complex world
  • Companies that are involved in new and novel concepts that challenges any business model. I want to be challenged to look outside my standard thinking model.

If you are keen to meet with Piyush at NPC. Do drop in a mail to us at [email protected] and we will get back to you.

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Is Software Innovation an Art or a Science? It’s Artful Science or Scientific Art!

When we think of Software Product Innovation, we imagine getting “Eureka!” moments 3 am in the morning, getting up and writing down inspired thoughts and coding them the next morning!

Reality is much more mundane and is more of evolution rather than sudden insprirations from the sky!

Yahoo started because Jerry Yang and Filo just wanted to create a searchable directory of information first at Stanford University and then San Francisco in general!

facebook started as a teenage testorone-fueled comparion site for Harvard students to post pictures of fellow girl students and rate who’s hot and who’s not! From there it evolved into directories of students in universities to find each other for dating more than anythingelse. For a long time, facebook signed up university by university and not the general public-oriented thing it is now!

This stands for enterprise software products also – Oracle Relational Databases were less expensive, clumsy knock-offs and replacements for Digital Equipment Corporation’s RDB/VMS relational database system.

Before Microsoft Word and Excel spreadsheets, there were Lotus Ami Pro and Lotus 123!

Before Google search, there were DEC Alta Vista search engine and Yahoo!

What made all the successful ones innovations in their own right were not just technical superiority but they took useful innovations and products before them and fixed annoying problems with their usages or expanded the concept of who can use them additionally or fixed usability problems with them.

Or they took an older concept and applied it to a new platform!

Or took an older concept and applied it to a newer market!

So if you want to innovate, you don’t necessarily to invent something new. You can innovate by doing one of these:

—- Is there something useful but not so easy to use? Can I fix it by making it easier to use? (Google’s single search box in the middle is a great example – Alta Vista got lost in boolean searches and requiring ANDs and ORs when specifying search. Google said – don’t worry about all of that stuff. We will take care of it. Just type in what you want into that box!)

— Can I take something useful and apply it to a new market? eBay India was another company before it became eBay bought it and made it eBay India. Flipkart is India’s Amazon. Cleartrip is India’s Expedia! Make no mistake. They are not just copies. Flipkart uses courier delivery. Cleartrip is useful for buying train tickets less painfully than when going to the IRCTC website. They all add some value and difference!

— Can I take something in one platform and make it suitable and applicable to another platform? Mobiile versions of applications may need to be differently designed and executed than an online, browser version of something.

— Can I build a family of products around one idea with more features? Personal, Professional, Enterprise versions of software is a fairly standardized way of adding additional features but orienting them towards different markets.

— Can I build a family of products that are related to each other but different from each other in functionality? Word, Powerpoint, Visio, Excel are all examples of slightly related products but providing different kinds of functionality.

Many times, we think that innovation is coming up with something completely new,. Successful innovations have all fixed or fine-tuned something useful but had some problems that were preventing widespread adoption.

Sometimes it is as simple as figuring out what these are and fixing them. And also thinking about related things so that you are thinking about a “family of products” rather than a single “one hit wonder”.

Wikipedia provides a clear definition of Innovation:

Innovation is the development of new customer value through solutions that meet new needs, unarticulated needs, or old customer and market needs in new ways. This is accomplished through different or more effective products, processes, services,technologies, or ideas that are readily available to markets, governments, and society. Innovation differs from invention in that innovation refers to the use of a better and, as a result, novel idea or method, whereas invention refers more directly to the creation of the idea or method itself. Innovation differs from improvement in that innovation refers to the notion of doing something different (Lat. innovare: “to change”) rather than doing the same thing better.