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Before you innovate, get out of your comfort zone

I had the pleasure of speaking to a batch of about 130 students, startup aspirants, product developers last week at the Innovate Delhi event. I was teamed up with Rajat Garg, of SocialappsHQ, and a heavy-weight with facts, numbers, trends, valley companies and slides. We were to cover “opportunity hypothesis’ broadly – how does a startup get an idea; validate the idea; build a demo/prototype and how the idea evolves into a business. Rajat and I spoke the night before (having him as a co-conspirator for the TIE Indian Internet Day event helped) and we decided to put on a joint session rather than one followed by another. Rajat would put up some slides, covering the theoretical framework and I would lead a workshop type session engaging the audience around their observations.

As I reached the venue a bit early (surprising since I had a long drive from Gurgaon to Okhla) I had some more time to gather my thoughts and think about what/how I would try to communicate. On a hunch, I decided to move around the hall (library converted to a training hall, with cameras, voice recorders and lots of other gizmos that only professors at Stanford can afford to have 🙂 and observe the batch to find some ideas that I could build on.

innovate delhi teams
As I went around the hall, some patterns started to form. Most of the folks were in blue jeans – the de-facto dress for the generation. About 20% of them had Apple laptops and the rest windows (similar to trends in India) but nearly all of them had squeaky clean covers – no personalization, no stickers proclaiming their love for free world! Nearly all of them had their laptop chargers plugged in (though it was an hour prep session and most laptops were fully charged). Though it was a hot day and so many bodies made it a wee bit sticky, all of the attendees were glued to their desk/seats even though the assignment was to think and come up with ideas on “marriage apps”. And the most critical observation of all, nearly all of them were glued into their course workbook; and the FB page setup for the event.

And then it struck me – this was a typical group of young Indian professionals, who love to “conform”. They all had been good students, mostly good kids, folks who would describe themselves as “being different” but would completely fit into a “stereotypical” definition of an IT/tech product persona. They were all living in their comfort zones – not ready to push their own limits, not expressing their yet-to-be-formed personalities, safe in the middle-of-the-road lives they were living. As I looked further to validate these assumptions new patterns emerged. Only 2 out of 130 had brought along tablets as their primary device. Nearly all of them had smartphones but very few were working on the FB page/course app on their phones? Few were taking pictures of the class and tweeting.

innovate delhi 2I had found my core argument for the day – I was going to challenge the group to think of their own personalities, experiences, behaviours. I was going to inspire them to reflect on who they are, and who they want to be and how they would differentiate themselves first before thinking of great, differentiated, innovative products that they would design, develop and bring into the world. I would show them how living (and using) on the edge of technology is almost a pre-requisite to pushing the boundary further; how great ideas evolve from personal needs and small advances which turn into big stories cause as the follower crowd discovers the same challenges when their use graduates and are happy to use the solutions the leaders have created.

And therefore, as Rajat opened his talk with the big concepts around finding an idea; finding a space that has some tailwinds, taking risks etc and set the stage for some curiosity, I found the means to engage with the audience with these questions:

  1. If the fashion trends for the day are colored trousers (yellow, green, orange), why are 90% of you in blue jeans?
  2. Why don’t I see any art, stickers, graffiti, pictures of any laptops?
  3. Why don’t I see folks using tablets when we all know that tablet volumes have crossed laptops this year
  4. Why did folks prefer to sit at their desks than take their laptops out into the terrace with a lovely garden view for the ideating exercise

But most importantly, could they think of pushing the boundary of any tech usage when they were not living on the edge themselves, when their own habits were on the trailing edge?

Needless to say, the rest of the talk was fun, interactive and stimulating. Rajat had some great slides – internet & mobility trends, numbers and wisdom from the trenches. I was able to co-relate those slides into how folks should use that information into their own “opportunity hypothesis”.

innovate delhi3As I look back at the end of the week, I find myself thinking again about the ‘conformity” of our post-independence indian culture; the regimentation of our education system and our social expectations that we need to break first before disruptive, revolutionary innovators and entrepreneurs will emerge. Hope this brief note makes you think a bit about yourself!

 

 

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The Services Industry moved India back 20 years in terms of building Products” – Arvind Jha, #PNHangout

In 1986, when I graduated from IIT Kharagpur as a Computer Science major, I had picked up an obsession with building products. Soon after college, I had joined DCM Data Products. DCM like other players in the Indian market, were very focussed on product development, as the product culture for designing computers, or writing compilers, etc was prevalent in that era. We as any other product company at that time were focussed on the fundamentals, such as, what a product should do, who would use such products, how we would market the products and how are we going to support such products.

As the outsourcing business kicked off in India, in 1991, the focus had suddenly shifted to a services mind-set where the question had suddenly changed to how efficiently and effectively can we utilize the 40 man hours in a week. The focus in the industry had pivoted from building a product to becoming a programmer, from market access to talent factories. Although India had built a 100 billion dollar services industry in this time period, we had also effectively moved back 20 years in the product industry.

Market Understanding is the key to building products

I had joined Polaroid – the leader in instant and chemical photography in the late 90’s. I had first-hand seen a how a dominant market leader was blindsided by major disruptions. Polaroid had a tough time adapting to the shifting consumer trends towards digital. The company had spent lot of time and resources in converting film’s to digital and digital to film, however, what the executives did not see that the Polaroid, was that film had no chance to survive in the digital medium.

MusselsEventually the company filed for bankruptcy and was sold. I had moved on earlier to Adobe, a company that was a leader in the software product space and was just setting up shop in India. Adobe was a solid product oriented company, with a lot of innovative products and a lot of leverage in the market. We had almost 5-10 million users for each products, and just sitting in on such big products gave us a huge amount of education. The challenge we had against was, could we build a product culture at the India office. The opportunity came after a couple of years after working as extension teams to the major products. We got the opportunity to “own” a full release of PageMaker. Since the core team was busy with building InDesign 1.0, PageMaker had been neglected and revenues were declining as the ecosystem of operating system, creator applications, graphics, printing etc had moved on. The task was to update the product on an “old” and complex code-base with minimal resources such that the revenue decline could be slowed down, enough to give InDesign a good chance in the market. We identified a lot of opportunities in the usage workflow, which our competitors did not take advantage of. These along with in numerous byte sized elements that had incrementally improved the product allowed us to present a case to the executives. The management had fortunately agreed to take on this mammoth task of transforming page maker. It turned out that the PageMaker 7.0 release increased the revenue 1.5x times and extended the long-tail significantly far in excess of the expectations.

The Innovation Bug

When you get hooked onto new and innovative stuff it gets harder do the maintenance sort of stuff. I started Adobe Connect, and also Adobe Enterprise Effort. Adobe in India had however at that time moved its focus in maintaining some of its older products, and I had then decided to move away to join a video start-up and learn how to build a product and a business from grounds-up, with a view to move to my own start-up in 3-5 years. The start-up was in video play-shifting, a similar solution to SlingMedia, where a user can take a video signal and encode it, and using a wire transmit the signal remotely to where the he is. We implemented a local area, wi-fi based video streaming and a peer-2-peer protocol for tunnelling video to a remote user. We got a NASSCOM innovation award for this product. However, one of the founders of the company had a tainted record with an IPO/investors and though we had great technology and user traction, it was impossible to raise funding unless the founder was removed from the company (which he did not want to let go). Since I was directly involved in meetings VCs and investors at that stage, I felt that the possibility of collateral damage to my professional reputation was very high given the founders manipulations and therefore I decided to exit from the company to launch my own start-up.

We launched Movico where we tried to establish ourselves in the video transactions space. The idea was to build a tool that would allow content owners to build scene based metadata and indexes for their video collections and we would offer tools for the users to extract, join, create new content online. In hindsight, we were way ahead of our time and especially after the 2008 economic turmoil, the funding needed to build the product and business had dried up. We had to can the product and look for alternate ways to keep going. So we turned our strategy around a bit, went into OPD services, built a reasonable revenue base and started looking at mobile apps.

Filmy Filmy!!

A couple of years ago, my friends started a mobile distribution company, Lava, focussed on brining tech/manufacturing from China and building a distribution brand in India. They did rather well and scaled the business to top 5 local Indian brand level within 18 months. In 2011, they asked me to help setup a smartphone team/capability for them since it was clear that android was going to be  huge disruption for the phone business. I got the chance to understand the phone ecosystem – from chips to software. I could see that for Lava to be successful in the smartphone space, we would have to move into a premium zone. So I helped build an Android R&D / competency centre. This attracted the high-end players to speak to Lava. One such player was Intel, who were looking to get into the phone business but not finding any takers. I realized that Lava could gain significantly with Intel as a partner. The profile could change. We negotiated to bring the Intel technology to the market under a new brand, Xolo, pitched as a premium brand with “Intel Inside” (Xolo today is a well known brand by itself).

The association with Lava had given me some useful insights into what the Indian consumer was looking for, and based on this I decided to move away from the device side to focus on building a portfolio of apps that were primarily in the content space – News, Film, Movies, Songs, Indian books and Indian Magazines. My gut-feel is that once the smartphone pricing falls under Rs. 2500 level (I expect this to happen Q4 2014) the demand for consumption of this Indian/local/regional content will be large and we can build a large digital media business powered by apps/server side technology. Although we had many competitors in these areas like Gaana.com, we knew that our expertise with video, content algorithms, focus on integrating new technology to deliver consumer benefit would win in the long run.

An example of this is our app “Filmi Filmy”. The market has over 7-10 major hindi film music apps. However, none of them have a great video experience.  At the same time consumption from YouTube has been growing rapidly. Content owners have published over 10,000 free movies and over 30000 free songs to YouTube. Using some smart algorithms and our video technology expertise, we have launched the first ever chitrahhar-on-the-go app, Filmy Filmy. It brings your favourite film songs with the original film tracks for you to enjoy in video. And we plan to build an ecosystem around this – sharing playlists, screen shots, quizzes, memes – ideas to engage the users and let them create new content. Make the video transactional (going back to our Movico idea).  I’m happy to say that within 3 weeks of launch, we were the top new music app in India. We were featured at #8 in the indian app store in the music category in India and #1 in Pakistan. We are currently grossing over 1000+ downloads/week. Soon we will have Android and Windows version of this app ready.

Innovative Business Models and Market Understanding is Key

With Filmy Filmy, we have implemented unique business models built around in-app purchasing. We knew right from the outset that this was not an App we can charge a premium for. Even if we went down the advertising route, we would need close to 4-5 million downloads for the product to be sustainable. Hence, keeping this in mind, we went down the in-app purchases route, that allows users to purchase and create his own own playlist and share this with his friends. For example, on Valentine’s Day, we had allowed our users to create a playlist to express his emotions and share this with his beau. We were quite interested to see that this model had gained quite a lot in terms of traction and revenue.

We currently target the Indian Diaspora, such as the Middle East, SEA, etc. We provide limited content access for free, but we monetize through some innovative means. Product Managers usually play an important role in understanding the market and identifying the right channels to monetize this content. My passion is to be ahead of the market so I am always trying things. Sometimes it works, sometimes it does not. But the team has a fun time all the time.

India as a Product Nation

A lot of young companies come to me saying, that we are doing an Indian version of a US business model. What sorely seems to be lacking in the pitch is the consumer profiling on how their unique solution will tackle a real world problem. I believe that one is to one direct modelling of US business models may not work. I would much rather here a pitch from an Indian company which states that they have the market insight to say that there is a large enough need in our Indian Audience, and our solution can meet that need in an innovative way. The focus should change from “we can do it” to “we know this about the Indian Consumer”. However, I’m very excited that the product industry has now matured and is no longer learning to walk, we’ve reached a point where we can run.

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Have you seen a large ship going down? I have, from close.

Polaroid Corp was a great company. Its instant photography technology ruled the world for 70 years. It served presidents, leaders, businessmen and even common people – it was the only way to take an instant picture (a position taken over by the mobile phone post 2007). It had some of the best talent, great chemical engineering skills, manufacturing plants, distribution and experience in selling photographic products.

When I joined Polaroid, it had a problem. Its revenues had been flat at $2.1 billion for nearly 3 years. A new technology – digital camera – was making inroads into photography and a upstart called Adobe was riding a popular wave, on the back of an editing software called Photoshop. Within a week of joining as head of the software team at the India office, I was at its HQ – it was a grand office, old-world teak panelled, lined with glorious Renaissance Art, reeking of tradition and quite intimidating for a newbie!

8:00 am sharp we were in its massive board room, 10-12 senior managers with the CTO chairing the meeting, huddled over the Question – what should Polaroid do to compete with the digital camera threat ? The options on the table were a kiosk, an instant, digital camera, a digital camera with an instant printer, the instance camera with a digital storage, AND consumer friendly software to target hobbyists. SWAT teams had been assigned the task of researching each option and present their research, insights, analysis and recommendations. Then we would have a brainstorming session and short-list two candidates that could be presented to the management team.

As each team presented its report, I was impressed with their in-depth study of the problem, the technology landscape, the challenges, risks – it was very professional and I was happy to have joined such a team. They talked all the right talk – customer engagement, service, innovation, simplicity, fun, lower costs, ecosystem, partnership, leverage the brand – every management jargon you can think of (in the context of ideation) was perhaps mentioned.

Yet – there was a big problem. After clearly establishing that digital technologies were a disruptive force, with a significant growth potential, all the teams tried to answer the question – “How can this help Polaroid sell more film?” All their ideas, at this point, moved from the exciting to the complexities of trying to marry film with digital. How can we add an instant printer to the kiosk? Can a digital instant camera process film and store digital at the same time? Can a digital film be created? Each team came up with innovative, but complex ways to address this.

Since I was a new hire, with some fancy education and smart ideas (at least the CTO thought so when he hired me), I was asked to give my comments as we got started into the brainstorming. So, I started by asking the obvious question bubbling in my mind – “Can I ask why it is important for a digital product to sell film?” – it was as if I had dropped a bomb! The silence in the room was prophetic. It was as if a naxalite had been dropped into Lehman Brothers board-room. VPs looked at each other and the CTO, as if asking – “is this the bright guy you’ve hired?”

The CTO, a 60+ senior veteran, having seen many young bulls off, told me politely – “film is our unique strength. Film is where we are leaders. Film is how we make money. Film is what Polaroid is all about”. That should have shut me up, but as some of you know, I can be argumentative when I want to. So I told the board-room why digital, in my view, was a complete new technology – easier, cheaper, more fungible than film and in fact it would disrupt the film completely. Why we should build a digital only business and make money in completely new ways – software, storage and sharing.

In the discussions that followed, many people complimented me for my insights and said they were happy to see that “we have a good leader in India”. But the discussions for nearly half a day were around, you got it – “film”. When you put 10 engineers on a problem with a hard constraint, they will find 10 new ways to solve the problem, and they will love each one of their solutions, its given! Not one person in the room, with many years of experience, challenged the notion that film was not needed for a digital economy and that force fitting film was just going to make it hard for the consumer, which would likely get rejected in the market.

Later, at dinner that day, the CTO shared another piece of insight – ‘We are Polaroid”, he said. We cant do things that small companies like Adobe are doing. We will do it the Polaroid way. I accepted his wisdom as he was more experienced, celebrated, richer and he was my boss! In 6 months, I heard that Adobe was setting up its campus in India and I jumped across to the young upstart. The CTO tried his best to retain me back and asked me what would help change my mind – “you have to become a digital company, sir. I don’t see that happening if all of the company is chasing film”.

In the next 5 years, Polaroid invested significant profits to build these instant, digital products. Not once did they think of digital-only as an option. They continued to dismiss internal voices and the traditional, high-margin film business continued to be the black hole for ideas. The revenue stayed flat at $2.1 billion. In another 2 years, the profits from the film business fell off the cliff, digital had taken over the world.

In 2008, Polaroid filed for bankruptcy.

Moral of the story – Large ships go down when they are obsessed about their past and ignore the present and the future.