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Beyond Google Search – The Platforms For The Internet of Actions

Beyond Google Search – The Platforms For The Internet of Actions

The below post is edited from an answer given to ET for this story. This article is 2 yr old. Republished today.

The rise of Mobile is a big shift in the way Internet is used, thereby influencing commerce over the Internet. In developed economies it is the desktop based users who have started spending a significant amount of time on mobile. For India specifically, mobile is bringing in lot of first time Internet users.

Given that Google Search is not the default starting point on mobile, there is a void waiting to be filled as the platform of the mobile internet. No, Android/iOS is not it. There are 3 services that I believe can be the platform of the mobile internet viz. maps, payments and delivery. Before looking into each of them, the hypothesis here is that the Internet of mobile is no longer about serving information but it is about enabling actions. So what happens to information related stuff? They will move to a Chat like app with a command prompt like interface. It is already happening with Wechat, Line etc. Search would be easier over chat with results showing bite-size info in cards, the blue-link click is only required to dive deeper. Why chat and not current Google search? Because the current Google search is a state-less communication. Two consecutive searches do not relate to each other. The command prompt type interface serving bite-size info will need to be state aware, just like human communication.

The 3 platforms:

Maps

In the long term, Maps are going to be default page for most of our local needs, like movies, cabs, handyman or anything related to offline commerce. Different reports suggest that about 40-50% of all mobile search is local. Instead of a page with blue links, maps will become our search engine on mobile. China is already seeing this change with Baidu Maps driving all-things-local. Google Maps also recently integrated Uber to show estimated pickup time if you have uber installed (http://blog.uber.com/googlemaps). When you have more than 1 cab app installed, Google Maps will influence which one you choose. In the long run it will also mean that you will not need to install the app but the app will just be backend integrated with Google Maps.

Users currently find it easier to search for “Zomato Pizza Hut” on Google and then go to Zomato’s Pizza Hut page, as compared to first going to Zomato.com, and then searching for “Pizza Hut”. In the same way, people will not look for a cab on a map inside Ola or Uber’s app, instead Ola and Uber’s cabs will be visible together on a single instance of Google Map.

The future of mobile local search is Apps on Map, and not maps inside apps. Just like now we don’t need to bookmark every restaurant site on the web browser, in future we may not need to install every cab booking app. This is the most important and defensible product of Google in the long term. Individual Apps as an interface is an intermediary stage of the mobile evolution until platform level aggregation and deep integration does not come into action again.

Payments

We do not see payments as a platform because it is generally not the starting point or in most cases we don’t even realize if it has an interface. It just happens, and that is how it is supposed to be. Apple and Samsung are working towards that. In India, the wallet feature in apps is being accepted. Mobile carriers and large banks are trying to get into the space. Paytm seems to be moving fastest in this space though. There are still licenses to be issued in this space by RBI and rightly so because this space is more about enabling trust and insurance, the core of commerce, than anything else.

Indian consumers do not relate to payment systems and insurance directly, but in developed economies one can ask their credit card company for a complete refund if the service by a vendor is not satisfactory. So they not only act as a credit and payment company but also an insurance company. Being on a universal trusted payments platform will mean more business. Micro-transaction will happen over a payments app and each little vendor need not have their own app with payment gateway. I should be able to use a plumber’s service and pay via a payments app that both of us use.

Delivery

Delivery of physical goods is a big platform opportunity. What we generally see as an ecommerce company is a delivery company. A lot of commerce, new and used, B2C and C2C, is being limited by the physical movement of goods. While intercity delivery is controlled by large courier companies, the hyper local delivery of goods is still an unsolved problem. Uber is dominant in this space for people movement and now starting for food but their platform doesn’t yet allow movement of small goods from B2C or C2C. In India, Delyver and Grofers are trying to capture this space. Entering the C2C delivery space will be a big move for them. It’s human delivery network now but from what we see, it will evolve into a drone network.

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The Road to Startup Exits – Think Next Roundtable Recap

$8B of venture investment went into Indian startups in 2015 alone! Four firms–Ola Cabs, Flipkart, Snapdeal, Paytm–accounted for 32% of these investments.  However, on the M&A side, things have been slow. Since 2011, there have been approximately 190 transactions valued at a total of $2.3B (about $11M per deal), placing India way behind the U.S., Israel, and other startup ecosystems.

I recently hosted a roundtable on M&A at Microsoft Ventures’ Think Next in Delhi, called “The Road to Startup Exits.” Our star panel consisted of Ashish Gupta(Helion Ventures), Deepak Gaur (SAIF Partners), and Abhishek Kumar (Snapdeal). Among a marquee audience of VCs, entrepreneurs, and senior execs from the industry, we discussed the present M&A scenario, its gaps, and the future.

Here is a glimpse of the insights generated during the panel:

  1. There is a slowdown in private markets globally, including in the U.S. and India. Valuations are expected to come down in 2016 and will cause grief for some investors, but the long term promise of India is in tact. In other words, there is no issue with fundamentally strong companies being built in India, but there is an issue with them being overvalued.
  2. This is a normal cycle for the startup/venture space: there will be several startups who will not survive the slowdown and will get integrated into other startups or corporates. A slowdown is actually good for the startups that survive – they can finally focus on getting their unit economics right, hiring the right talent and focus on what needs to be done to get to the next level. This also contributes to the ecosystem’s evolution, shaping the next waves of entrepreneurs and their offerings.
  3. Some recent examples of companies who had a solid team and business model, but that were unable to scale (subscale), are Qikwell (acquired by Practo for ~$50M), Exclusively (acquired by Myntra for their private label offerings), and Letsbuy (acquired by Flipkart). TaxiforSure’s (TFS) acquisition by Ola was about the power of financing–Ola had raised significantly more money than TFS, and at that point, TFS’s volume was still interesting for Ola and Uber, which justified Ola’s decision to acquire TFS.
  4. Large startups are more open to leveraging other startups and their offerings. For instance, Snapdeal has been a prolific acquirer of Indian startups (15-16 to date), primarily to plug their own gaps in terms of technologies, products or customers. For example, the product from Martmobi became the basis of Shopo, the C2C platform for Snapdeal. Freecharge was one of the fastest growing mobile wallets in the country and post-acquisition now has become Snapdeal’s payments business.
  5. Companies stay private much longer in the U.S. This will play out in India, too, and fewer companies will go for IPOs in coming years–and the ones who do might not consider doing it in India. The capacity of the India market to absorb large IPOs is restricted–there is limited float. Although regulations are becoming favourable, the India market today still has very stringent guidelines on public listing with very high levels of scrutiny and liability. Hence, listing a company in the U.S. is a lot more attractive, even for an Indian company.

In summary, 2016 is expected to see a slowdown in the funding space both globally and in India, which in-turn will drive an uptick in the number of M&A transactions as companies who are unable to raise their next financing round will seek an exit option.

Want to see the entire Think Next Roundtable? Watch it here:

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#StartupIndia Action Plan — Reactions from a “normal startup”

Last weekend witnessed a glitzy startup event. In many ways, this event was like every other startup event in India — founders of “unicorn” startups dispensing gyaan to the rest of us mortals interspersed by some disinterested folks featuring in hackneyed panel discussions on done-to-death topics in front of an uninterested audience who had suddenly rediscovered the hidden joys buried deep in their smart phones.

There was one difference though — the final keynote of the day was delivered by none other than the Prime Minister of the country where he drew up what was purported to be an action plan for Indian startups.

Predictably, this was followed by universal approbation and politically-correct reactions from our startup luminaries who declared this as a momentous day only marginally less important than the Second Coming.

Out of these, one quip stood out for me.

Vijay Shekhar Sharma, the founder of Paytm had this to say:

“The announcements by the government were more than what a normal start-up would have expected”

I am not quite sure what this “normal startup” that Vijay alluded to exactly is but if I were to hazard a guess, it probably means an average joe workhorse startup — one that is far from being a unicorn (like the one that Vijay himself runs) and has no rockstar founders, hedge-fund investors or nose-bleed valuations to boast of.

As it turns out, I run a company that qualifies precisely for being called a “normal startup”.

And for what it’s worth, these are my expectations around the aspects addressed in the announcements:

I don’t expect to be subject to a new “permit raj”

Apparently, to decide who can avail of some of the envisaged benefits, an Inter-Ministerial Board will be set up that will get to decide if a particular company is a startup or not.

As those of us who grew up in the “licence raj” pre-liberalization era will readily testify, requiring to be gated by a government-sanctioned body to avail of any benefits or privileges is the first step down a slippery road that leads to abuses and rent-seeking behaviours of all kinds.

I have no desire or inclination to run down the “permit raj” gauntlet again.

If at all, a set of gating criteria is unavoidable, they should have been simple and empirically demonstrable rather than having to depend on the whims of a board of any kind.

I don’t expect the government to become a VC or LP that chooses winners

The government has announced a corpus of Rs. 10,000 crore structured as a “fund of funds” that will be disbursed over a period of four years.

I am not sure if this is a fresh initiative or the same Rs.10,000 crore fund that was announced two years back — and of which, I have heard precious little since.

In any case, I have no idea why the government feels that it needs to support the Indian startup ecosystem with direct funding. It is not as if there is a dearth of capital for startups currently — billions of dollars of VC money was invested last year and most people in the know will tell you that there is 10X more money that is waiting on the sidelines to enter the country. All of these funds are run by professional investors who have a well-informed hypothesis on why they should invest in India and specifically in chosen Indian startups.

But it is, admittedly, high-risk capital — a high-stakes game of startup roulette operating under an extreme power law (a small percentage of “winners” will end up delivering more than 90% of the returns).

This is a game that the government has no business playing. Not just because it doesn’t have the skills or risk appetite of professional investors but also because it shouldn’t be in the business of choosing winners in any form — something that yet again can leads to all kinds of rent-seeking behaviours and cronyism.

I don’t expect tax waivers or hand-outs for my startup or my investors

Two of the announcements made are around taxation — firstly, startups who are vetted by the Inter-Ministerial Board are exempt from paying income tax for three years and secondly, any long-term capital gains will be exempt from tax if you invest it into the government’s “fund of funds”.

I am really curious what made the government to offer tax exemption —does it feel that Indian startups are incapable of competing on their own without these kind of sops?

As far as I know, no self-respecting startup entrepreneur would expect this type of hand-out. I, for one, would have no problems with paying the stipulated taxes as mandated by the law of the land in which my startup operates.

If this is an attempt to recreate the IT-services boom which ostensibly benefited from zero tax on export income, then it is an ill-considered and retrograde move.

Tax incentives artificially mask the inadequacies of the companies who require such hand-outs and this move gives out a signal that startups are not capable of competing in a free market without this kind of government support to boost their margins and returns.

Also, as and when these incentives play out their life cycle, it leads to drastic pushbacks and over-compensatory normalizations that defeat the basic purpose of the original incentive.

Finally, tax incentives inevitably lead to distortions and abuse — while “good” startups require no such hand-out from the government, “bad” startups — those set up to explicitly exploit these types of schemes for nefarious purposes such as money-laundering — will prosper. A classic case of adverse selection.

As far as exemption on capital gains go, this is again an artificial inducement that is more likely to throw up bad results than good — if people invest in startups simply because they can save on their capital gain tax, it is a very bad reason to invest! Angel investing is not for all and certainly not for the faint-hearted.

I don’t expect the government to make it easier for folks to start up

Under the proposed action plan, it would apparently be possible for folks to start up in a single day through a mobile app.

I am a loss to understand why this is useful or valuable and see this primarily as showboating (why a mobile app for instance?).

Is this an attempt to improve our ranking in the “ease of doing business” index?

Singapore is currently ranked one of the top-ranked countries in this index and it takes two-three weeks for you to completely set up your startup there. This is not significantly different from the time taken in India — what’s more, most of this can easily be outsourced and doesn’t really take up much of the entrepreneur’s time.

In any case, this is an activity that a startup has to go through just once in it’s lifetime — contrast this with the recurring reporting overheads that a startup has to face thereafter with assorted tax and labor departments which are far more taxing and cumbersome.

Finally, on a somewhat philosophical note, I am not quite sure why starting up should be a trivially easy operation — having some “pain” in this aspect is actually a good thing as it could filter out some of the folks who are not really cut out to be entrepreneurs in the first place! The current system is therefore a positive aspect as it is self-selecting.

I do agree that it should be easier to shut down companies but from what I understand, a bill addressing this is already pending before Parliament and the action plan doesn’t offer anything new in this regard. Also, this step is more useful to investors than to entrepreneurs themselves, so it is somewhat orthogonal to a plan that is targeted towards startups.

The others…

Now I have been running startups for a while and so, some of the points mentioned don’t apply to me as they target newbies.

I am not convinced that the government operating startup hubs and supporting incubation centers is a step in the right direction — the bottleneck in enablers like this has never been around infrastructure but rather on having the right mentors and guides. Nothing in the announcement contours suggested that this key gap is the one that the government is cognizant of attempting to fill.

For other announcements — such as self-certified compliance and subsidized patent filings, the devil is in the details and it would be premature to judge these one way or the other today.

What I actually expect…

So, as a “normal startup”, what do I actually expect?

This is what I would expect:

Boost sentiment by having a predictable policy regime

A lot of startups in my peer group have re-domiciled to Singapore. Nothing that has been announced in this plan will make any of these companies to reconsider the move.

These startups have moved to Singapore primarily because global investors see India as an unpredictable place to do business. Unfortunately, these sentiments are well-founded .

Take the illustrative example of a global major that acqui-hired a small Indian startup for what was essentially a rounding error in their balance-sheet — the actual acquisition was dragged on for over a year and the amount stuck in a holding account as the acquirer was made to run from pillar to post to explain why the value of the IP acquired was fair. This global major has now sworn off acquiring any more Indian startups!

Or take the example of companies like Flipkart that have had to migrate to Singapore because the policies around FDI in e-commerce are murky and/or inimical.

Unless the government address these structural issues around business and taxation policies at a fundamental level not restricted merely to startups, the state of things is unlikely to change.

Be a proactive customer to Indian startups

Rather than being a defensive regulator, the government should consider morphing into a proactive enabler that supports Indian startups — for instance, by being a customer for the products and services offered by us. The action plan does mention a few steps in this direction but the patronage mentioned extend only to manufacturing firms who are already in line to leverage the 20% procurement mandate for PSUs and others.

Double down on building out internet connectivity infrastructure

While a large portion of the Indian populace have come online over the last few years, there are still large swathes who are not connected. If large companies like Flipkart could be created on the back of 100 million Indians online, imagine how many behemoths could emerge from 500 million Indians being online!

Epilogue

As someone who runs a normal startup in India, I already am all too aware of the myriad risks and challenges of trying to build a world-class company out of here.

But none of this fazes me.

As an Indian, this is something that I signed up for with my eyes fully open.

I see the government’s announcement as a signal that it recognizes Indian startups as an engine for innovation and non-linear growth and am grateful for this “intent”.

That said, I would love to see the policies and execution around this intent to be done on the back of substantive discussions with Indian startups and representative bodies like iSpirt.

Only then can this intent translate into something meaningful beyond a superficial fest of circle-jerking and premature declarations of victory.

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Disruptive Blue Oceans and India to the world!

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

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

  1. Low-end footholds
  2. New market footholds

Low-end footholds

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

 

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

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

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

new value curve

New market footholds

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

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

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

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

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

Paytm transforming noncustomers to customers

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

Bibliography

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

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

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

Disclaimer

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

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India Inc’s Innovators Are Setting The Stage For The Ecosystem

Steve Jobs, the late co-founder of Apple Inc and one of the greatest innovator from the tech world, believed that innovation was the only way to win, and by no means did he just see innovation in making things more complex. An advocate of simplicity, he also reiterated, “Simple can be harder than complex; you have to work hard to get your thinking clean to make it simple.” That’s why we, at GHV, believe “Innovation is not just doing something new. Sometimes it means pushing the existing more powerfully and elegantly.”

Innovation or doing things differently is something that has set the momentum of the “startup scene” in India. It is because of thinking differently, the “old wine in a new bottle” syndrome that has revamped and fuelled the success of top startups in the country today. Innovation is all about bringing something new and exciting to the customer. Given the cutthroat competition in the market today, innovative products and ideas are the key to differentiating yourself from others in the race.

Successful businesses often anticipate future trends and develop an idea, product or service that allows them to meet this future demand rapidly and effectively. It is not just about fulfilling the pain points of the consumers, but also being able to preempt the future needs of the consumers before they even feel them. In essence, predicting and fulfilling a future void and working on its solution in the present, staying ahead of the curve. Innovation can help you stay ahead of your competition as markets, technologies or trends shift, thereby giving you a definite edge.

This year, India has slipped 10 places in the Global Innovation Index to a disappointing 76th position. Imagine what we can accomplish as a nation if more people were to focus on innovation. We can easily transition to become a nation of job creators than job seekers.

Renowned global brands like 3M, GE, Lego, Nestlé, Pepsi and Starbucks are all from different industries, but have been constantly innovating their products. These companies have successfully created and supported an internal innovation capability that drives new products into the marketplace year after year with remarkable success. In fact, the very reason behind their success is that they made innovation a critical capability within their organisations. These companies recognised innovation as a key driver for success by enhancing the value that the business was delivering to customers.

With Indians like Nikesh Arora and Sundar Pichai, leading the heavy weight ‘innovating’ companies like SoftBank and Google, we are looking at a complete change in the way India and Indians are perceived globally; whether it is Indra Nooyi, Satya Nadella, Ajay Banga or Shantanu Narayen.

Innovation helps large companies survive challenges. According to Clayton Christensen, disruptive innovation is the key to future success in business. For companies to become market leaders and retain that position, they have no choice but to innovate and disrupt an existing technology or market by recognising opportunities.

For example, Patym had revolutionised mobile commerce in India. Earlier, people were wary of storing their debit or credit card information online. The company created a secure digital wallet where a user can put in a small amount without threat of online and credit card fraud. The payment solutions provider uses an RBI approved semi-closed wallet that is being used everywhere, right from Domino’s Pizza to Zivame to Uber. The company now has over 80 Mn mobile wallets and more than 15 million orders per month.

Innovation is that one thing that all successful businesses worldwide have in common. Innovation is a part of their culture… it’s in their DNA.

To foster a spirit of innovation in today’s youth, iSPIRT is hosting InnoFest, a daylong event focused on kick starting the next wave of innovation in the country. The event to be held at Indian Institute of Science, Bangalore on 22ndAugust 2015, will offer young innovators a platform to present their ideas and interact with like-minded people from across the country. The daylong fest is meant to celebrate innovation and bring forward ideas that can become game changers for the nation.

Guest Post by Vikram Upadhyaya

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Indian Regulator SEBI meets Software Product Startups.

How often has this happened? An entire team from Securities and Exchange Board of India (SEBI) with its Chairman Mr. U.K. Sinha meeting with Software Product startups in Bangalore to understand their challenges and also provide useful advice by participating in interactive sessions for more than 5 hours.

On 19th December, Mr. U.K. Sinha, Chairman of SEBI and his management team, heard the stories of 8 Indian software product startups. The idea was to understand both the Capital Markets Challenges (like raising capital from FIIs, listing for IPOs, and other book building challenges) as well new developing landscape of Consumer Market Challenges (like changing landscape of payments, pre-payments, recurring payments, etc.)

Mr. U.K. Sinha, was very forthcoming with his admission that new age companies require a completely new paradigm of evaluation and approvals. The new paradigm is needed not just for listing purposes, but also for market regulation and growth purposes. He assured full commitment from SEBI’s end to the budding entrepreneurs that SEBI is very keen, and will do everything within its capacity to help develop the markets keeping in mind INDIA’s growth needs.

More than 90 minutes of conversation and showcasing of New Software Product Startups from Bangalore took place. Mohandas Pai chaired the sessions on iSPIRT’s side. Not all elements of the sessions can be reproduced here; below are some of the key highlights.

2014-12-19 17.20.42

Home grown Startups share their Stories with SEBI

About 8 Indian Startups which started in INDIA, and which have global operations today, presented their stories not just from a valuation and growth standpoint, but from an emotional and proud-to-be an Indian startup viewpoint. To sum it up, almost every story was about Entrepreneurs who dared to dream something not only for them, but for INDIA, and today want the Indian System (Regulators, Government and Institutions) to reciprocate to their needs. They highlighted their list of issues which include the following:

  • 8 companies from various sectors (InMobi’s Manish Dugar, Ezetap’s Byas, Exotel’s Shiv Ku, HotelLogix’s Aditya, iViz’s Bikash, Paytm’s Pratyush, QuickHeal’s Rajesh and Deck.in‘s Sumanth) all presenting the journey of their startups.
  • A common hardship that resonated from most of them, was the unwarranted need of setting up subsidiaries or parent companies abroad, just to attract the right Investors and raise capital for growth.
  • Exemplary companies like InMobi, which raised initial money from Angel Investors today has a reach of about 1 billion people. Ezetap which raised initial money from AngelPrime, today has global operations, however it has its manufacturing, done entirely from Electronic city in Bangalore. Both urged that it should be made easy for Indian companies to raise money from Global Investors.
  • The existing regulations and guidelines make it very difficult for companies to get the right people (investors and advisors) on their Board.
  • Exotel, Hotelogix, Paytm and iViz, all stressed the need for modifying the SEBI/RBI guidelines on ESCROW, where Indian shareholders should have similar opportunities like Global Investors.
  • QuickHeal’s Rajesh highlighted how Kailash Katkar, a college drop-out had built one the most successful product companies out of INDIA over the past 25 years. Today QuickHeal is thinking of its IPO and needs to decide where to list.
  • Requirement for the Regulator to understand all stake-holders and their motivations, and provide for fast and timely intervention for Exits (IPO listings, etc.).
  • Need for new models to evaluate the new paradigm of Tech/Internet Product startups in INDIA.

At the end of this open session, Shekhar Kirani (iSPIRT Fellow; Accel) highlighted the fact that the Indian software product markets were entering an era of hyper growth. It is a new paradigm where not just startups, but all Institutional bodies within India, need to now collaborate and commit, for supporting each other’s need. In this context, he appreciated the interest shown by SEBI.

Policy Expert Team Interacts with SEBI

Following this open session, the visiting SEBI team met with iSPIRT’s “List in India” Policy Expert Team for an intense three hour closed door conversation about specific issues and their resolution. This iSPIRT Policy Expert Team is led by Sudhir Sethi of IDG and has Rajiv Khaitan (Khaitan & Co.), Sanjay Khan (Khaitan & Co.), R Natarajan (Helion), Rajesh Ghonasgi (Quick Heal CFO), Manish Dugar (InMobi CFO) and Harish HV (Grant Thornton) as its members. While specific details of this meeting are not available, Mohandas Pai told me that the session had been very productive.

Insights from SEBI

Mr. U.K Sinha, Chairman of SEBI, has an unbeatable track-record. In his past life, he was the chairman of UTI, and was instrumental in transforming UTI from a 1.2k crore institution to 12k crore institution. Many insights were shared by Mr. Sinha with all the participating Startup Entrepreneurs. Some of the key ones are:

  • Mr. Sinha and his team gracefully acknowledged that they were not just a Controller or Monitor of Capital issues, but they were equally keen to Develop Markets for businesses to thrive.
  • Further, Mr. Sinha highlighted the introduction of SME-ITP platform to facilitate capital raising by SMEs including start-ups which are in their early stages of growth and to provide for easier exit options for informed investors like angel investors, VCFs and PEs etc.
  • He also indicated that SEBI is exploring putting in place a framework for crowd-funding which will provide a much needed new mode of financing for start-ups and SME sector and increase flow of credit to SMEs and other users in the real economy. In this mode, SMEs and start-ups will be able to raise funds at a lower cost of capital without going through rigorous procedures.
  • It was indicated that SEBI is keen to facilitate capital raising by such companies to help them achieve their full potential.

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New Wind is Blowing

I saw a collaborative approach to problem solving that I haven’t seen before. iSPIRT’s policy approach is refreshing different from the traditional lobbying mindset that one sees in trade bodies. And SEBI is clearly open to listening and learning. It was amazing to see how SEBI as a regulator and iSPIRT as a think tank were both focused on the same national goal. I came away from the meeting with optimism and a spring in my step.

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Learnings From Building A Consumer Facing Web Product

Before we got started with PriceBaba, both me and Tirthesh had almost zero experience of building a product. We are passionate about Internet and web services that create an impact. Building PriceBaba over the past two years has been a learning experience and we have been blessed to have some amazing friends who have guided us throughout the process. Here are a few learnings (while we still continue to learn and grow):

Developers cannot build in silos

To create a great product, it is great to hear feedback from the horse’s mouth. That is why our developers have a lot of interaction with our users directly. The best way to raise the product quality is to let your developers see the product in use.

We have also benefited by having the operations and dev teams sit next to each other. There is constant flow of feedback and developers accordingly iterate and prioritise their roadmap. All incoming user feedback is shared with the developers and content teams, thus everyone has sufficiently enough data points when debating new features and upgrades.

People don’t listen, keep repeating, keep listening

We often assume that communicating something once is enough to make the point. However a learning with PriceBaba has been that we need to recreate the importance of an approach repeatedly!

For example, most of our team has grown up using desktops. Especially developers who have also had pro systems with large screens and keyboards to work on. Thinking that mobile is the medium that majority of our users operate from isn’t a natural thought. Our thinking begins from a large screen while mobile remains an ‘optimisation’ task. It has taken a lot of unlearning and relearning for our team to adapt the thought of mobile first. Any new feature or interface has to be thought for mobile and tablet just as much as for desktop.

I relentlessly share our mobile usage numbers, industry reports and keep mentioning MOBILE as a keyword to my developers. They are listening and building a great mobile interface for PriceBaba 🙂

Mobile Mobile Mobile, but not Mobile App, Yet

While I already mentioned how important mobile is, we have often been tempted to build a mobile app. However we have consciously stuck to mobile web for several reasons.

Our product offering isn’t something that a user wants to use daily. In its current form, building an app would lead to very low repeat users and uninstalls. The way the app business works is that you get ‘x’ thousand downloads and a fraction of those would be active users. For an app like Zomato or Paytm this makes a lot of sense as repeat usage is very high; we love using them on a regular basis. But we need to evolve the value proposition of PriceBaba much more before we release an app.

Development resource is another big reason! While mobile is growing, mobile web is serving most use cases just fine. An app is good to show off on your resume, but not the need of the day in many scenarios (like ours). We like to focus our developer resources on the most crucial things first.

Manual first, Automate second

PriceBaba isn’t a usual technology startup. A large part of our work is to integrate offline retail with the internet. A lot of operations, back office and systems to manage the same has been built over the last two years.

Almost always we have begun our ground operations with manual work and then work towards automating them slowly. Doing things manually has allowed us to iterate quickly, learn more about our customers before making solutions and eventually prevent wasting development time.

We have realised that trying to automate things either before hitting a critical mass or a ceiling isn’t always a good idea. While we have made our mistakes of building things too early, for PriceBaba it has mostly worked better to do things manually and then automate once we have a better understanding of the landscape we operate in. Depending on the situation, you may well need to build systems in advance but do ask yourself if you can do better if it’s delay it a little.

Every feedback is not a new product feature

This is fairly simple and straightforward. Once you are out in the market there is a plethora of feedback that comes to you. Every single day users tell us what new features they want, experts suggest new cool stuff that we can do and our team brainstorms world-changing ideas while sipping tea every other day.

After a few cycles of jumping to every new cool looking feature and trying to develop it, we learnt that unless something is a really pressing need or would add significantly great value to our users, we shouldn’t launch it. That meant saying ‘no’ to adding new product categories, product reviews and some more features that are too early for us right now. We instead chose to focus on local prices and store locations; which is our key value proposition and narrowed down our focus on a single category that we could dominate.

We keenly listen to every feedback that comes our way, we note it, discuss it to death, but we don’t build it right away :). We have in fact removed a major feature few months back that we felt was half baked, needed lot of maintenance and served a very small fraction of our user base. This may sound cliche, but we are starting to learn how to say ‘NO’ to a lot of great sounding ideas.

Fake it, till you make it + an alternate to AB tests

This one is my favourites and we love doing it from time to time — adding fake buttons to our site. A simple way of testing if a new feature is worth adding to the site, we add a fake button on the site and measure how many people clicked it. It is a quick and dirty way to get a feeler of what will click with our users.

For a long time we had a fake ‘set price alert’ button on PriceBaba’s product pages. The same captured email IDs but sent them no alerts, for we had no backend built for that purpose. When we started to see significantly enough email IDs being entered everyday, we built and delivered that feature. We went an extra mile and added a SMS alert feature along with it. Today the SMS alerts are the most popular user interaction on the site.

We have often been suggested to do AB tests and we would eventually start doing that. However in early days when the user base is very small, we do a A>B>C test. We change a particular product attribute, measure user interaction and change it further if the results aren’t great. Most startups can afford to do that in the early days and move faster with their product.

Speed Is Crucial

We have learnt first-hand that speeding up your application can greatly improve usage. Earlier this year we saw a 25% spike in traffic overnight by just moving to a better hosting provider. On another occasion, removing a 300ms delay in our search’s auto suggestions saw a 60% increase in the number of searches by our users. While we wouldn’t claim to be the best in optimising for speed, a good part of our time has gone into learning and implementing ways to accelerate our page load speeds, thus improving user experience.

Disclaimer: My experiences are from building a consumer facing Internet product.

Guest Post by Annkur P Agarwal a retailer turned technology blogger who got bitten by the product bug recently. PriceBaba.com is a shopping research engine that helps consumers connect with small retailers. You can connect with him on twitter @annkur.

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Design in Indian Startups

A brief look at the state of the Indian startup ecosystem from the lens of design and how well it is understood or misunderstood. How the next generation of the technology startups are battling the design challenge in a globally connected ecosystem for the right consumer audience.

According to Dave McClure the founding team of a startup should include the holy trinity of a hacker, hustler and a designer. In simple terms a dream team comprising of members responsible for the technology, business/marketing and the design. Dave is no stranger to entrepreneurship or India, and as the founding partner at 500Startups (internet startup seed fund and incubator program based in Mountain View, CA) each of their accelerator programs have seen interest and presence from a number of Indian startups.

“Holy trinity of hacker, hustler and a designer”

This then begets the question of what exactly is an “Indian startup”? Unlike Israel a nation known both for its military prowess and high-technology startups along with the fact that it has the highest per-capita VC investment in the world. Startups in India like the nation itself conform to no unifying sector or theme. On one hand we have Delhi based Langhar helping connect foodies with authentic home cooked local cuisines on the other we see SarkariExam a portal dedicated to helping people find government jobs. Even after applying the filter of technology and technology enabled startups with their constantly blurring boundaries in the internet & mobile space, the bandwidth of the spectrum is still large.

If one goes by the estimates of AngelList, a platform dedicated towards the startups and the investors; there are 1500+ startups in India. This by no mean implies that all of them would be independently successful or have a profitable exit. Many of them would eventually shut shop and might not even exist the next summer. Despite this uncertainty and the increasing belief of Indian founders in their idea have led to a rising entrepreneurial activity. Catering to everybody from the hyper local audiences to products specifically built for the customers abroad. Helping us establish the fact that there is no single way to explain or define as to what constitutes an Indian startup. If question of the Indian-ness wasn’t tough enough the attention to design has increased the complexity of the understanding manifold. Invariantly a handful of startups like Cleartrip (travel), Zomato (food), Paytm (payment) and Hike (messaging) have become the poster boys for the best designed products being built in and in certain cases for India. This then progresses us to our next challenge of “What is design in the context of the startups and what is the role of the designer?”

Depending upon who do you ask, one is bound to get various forms and interpretation of what constitutes design? Making it easy to complicate things for the humble hackers and the hustlers trying to fathom as to why their designer is unable to deliver in the face of the challenge for their startup. Going over from formal the definitions provided in academic institutions of design being ‘a noun and a verb’ to the one followed by design practitioners whereby they try to highlight the difference between “art and design”. One thing that emerges is that, design has been and will always remain at its core a form of problem solving.

“Design has been and will always remain at its core a form of problem solving”

Had things been as black and white as they seem we wouldn’t have startups explaining their design strategy in terms of the visual design. Or in the case they understand the value of design keep looking for that one mythical designer who could solve all their problems. With the ever changing relationship and interaction of humans with technology; and it’s constantly evolving nature the boundaries of what explicitly is the job of a designer or the hacker is quickly overlapping.

Take the case of Rasagy Sharma who after finishing his undergraduate degree in computer science & engineering joined a Bangalore based startup as their UX Designer. One of the first ‘design’ hires in the team comprising of hackers, leading him to explain his role to the people around him. If the challenge of understanding what exactly entails in these new design roles wasn’t tricky enough, Rasagy highlights the emerging debate of ‘Should designers code?’ “The answers vary from the extremes of ‘Designers can code and should code’ to ‘Designer cannot code and is not expected to code’ with a comfortable middle ground emerging in the form of ‘Designer can code but is not expected to code’ ” says Rasagy.

“Designer can code but is not expected to code”

But if there is no one designer who can solve all of the problems of the startups which range from visual design & interaction design to in certain cases industrial design; and finding the talent is tough. Then shouldn’t we see the limited resources of the startups being spent on the function (technology) than form (design and by extension user experience)? One of the most interesting theme to emerge while talking to a number startups as a part of the research was their unanimous agreement in pushing design forward for their product. Neeraj Sabharwal who heads the design at the Hyderabad based NowFloats quotes Tom Peters when he says “The dumbest mistake is viewing design as something you do at the end of the process to ‘tidy up’ the mess, as opposed to understanding it’s a ‘day one’ issue and part of everything.” Even in the case where the technical founders thought of design as nothing more than a marketing gimmick they did approve of increasing the resources dedicated to certain design activities by either hiring talent or outsourcing the process. And putting the bill under what they felt was the ‘cost of customer acquisition’.

The cost of starting an internet business is decreasing by the year and in no other period of history have we seen more entrepreneurial activity than the present. Faced with the simple market forces of consumer choice, a positive user experiences is a simple measure of how efficiently the technology works to help the user achieve his goals. In a somewhat surprising trend that in hindsight makes perfect sense, some of the best designed startups being built in the country include a designer as a part of the founding or the founders atleast have the design aesthetics in place to drive things forward.

Eventifier is being built in the southern city of Chennai at The Startup Center. Eventifier helps keep all the social media chatter around an event including the conversation, photos, videos, presentation decks in a single place. They are one of the few startups using the hacker, hustler and the designer approach since the day they began. Mohammed Saud holds the mantle of the Chief Design Officer and one would give weight to his belief when he says “Being equally proficient in all facets of design even when their underlying principle might be the same is difficult.” His solution is the one that is increasingly becoming common, become proficient in one form of design yet understands the other well enough to guide somebody with your vision. A similar ideology was put forth by Arun Jay, who amongst a number of other claims holds the post of the principle designer at SlideShare and the senior UX designer at LinkedIn. By academic training Arun began as a communication designer but his experience with film making, photography and web based technologies makes him the ideal choice for the unicorn designers so many startups look for.

But it wouldn’t be fun if there weren’t a few startups breaking the mould. HealthifyMe and NowFloats are two startups which were a part of the Microsoft Accelerator program in Bangalore. On one hand we have Neeraj Sabharwal from NowFloats with no formal training in the various disciplines of design yet relying on his industry experience and understanding of design thinking principles to lead the charge. On the other we have Tushar Vashisht co-founder of HealthifyMe attributing the fact that “Lack of a dedicated designer in the founding team even with the team valuing design, cost them precious resources in the decision making and product building exercise. With HealthifyMe treating the user experience as an integral part of the product building process getting Rohan Gupta as a designer onboard has positively affected our shipping time.”

But believing that a well-designed product is the end all in the product building exercise would be plain naïve. Design is one of the integral processes amongst the host of other responsibilities held by the hustlers and the hackers which make a product successful. Brij Vaghani is the founder of live traffic monitoring service, Traffline which currently operates in three metropolitan cities. His team is working in close association with a design studio for the soon to be launching next version of their product. “Even though we understood the value of design, the founding team relied upon our core strengths of technology in the early stages of the product. An approach which we feel might have had an impact on the metrics we use to track the product success but something that was within permissible levels”

Where are we headed? Great design and technology have always existed. The founders are still looking for that elusive designer who can handle all their design problems, but as unicorns go those beings are still rare to find. The consumer internet is nearly twenty years old, the smartphone nearly six and the tablet less than four. Yet the potential of the startups building upon and specifically for these platforms is seeing an exponential growth. We haven’t even begun scratching the surface of the potential and can’t predict the trajectory of the startup economy in India serving an internal audience of a billion plus people and catering to those abroad. But the fact remains that the designers seem to have finally found a voice and Indian startups are rearing for them to go.

Author’s Note: This article was written for a collaborative publication: Create Change for Kyoorius Designyatra 2013 produced by Kyoorius and British Council, India and is a part of British Council’s design writing programme.

The post has been slightly modified for the web by adding of the appropriate hyperlinks to the startups and the resources mentioned to aide the reader. You can download the PDF version of the print magazine in all its glory here. The article is on page sixty-nine.

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Building Killer Products in a young startup….

It was a cold Saturday afternoon with the rain gods already drenching the earth beneath them. The location reminded me of college with its red brick interiors, jute chairs and a room which slowly but surely filled up to over 45 people. We had Harinder CEO of Paytm, Angad from Zomato & Pranav from Makemytrip.com already in the room getting ready to share their thoughts 

Harinder CEO of Paytm went first and touched upon some very basics needs to build a Killer product – A product which would make a difference to life. He showed some photographs of products which he liked and disliked – seeming to suggest that being clear about the problem which exists, and for whom its exists, the solution would not be judgeable by you or anybody if that is not clear – Good products always keep it simple. 

Simplicity means :

  1. Sensitive to products – to understand the problems around you and that the product is the solution to that problem.
  2. To be free of Baggage – Inverting the Pyramid by starting off with the problem and finding a solution for that.  A simple facility like a wallet feature on Paytm helped the company to provide their customers with a solution to a problem.
  3. Be Practical – Pixel perfection is good, but need to be realistic to the needs of the business. It may mean to launch a product by striking a balance between hygiene(the minim basics)and differentiated features of a product. 

Harinder thus set the tone and passed the baton to Pranav from Makemytrip.. 

Who spoke about the new product RoutePlanner. It became a reality by defining a special problem that of just trying to understand how to get from City A to City B 

He outlines the 10 Mantras on Building Killer Products :

  1. Why would somebody use this product? – The Mission statement
  2. The Use cases that would make a difference – Clearly define the targeted market segment. State what the product does and does not do.
  3. Solving the Problem – Solutions to problems for customers
  4. Tackle the Hard problems first
  5. Get Feedback on your product before you have built it.
  6. Simplicity of Product Matters
  7. Launch Fast.
  8. Listen to Everyone, but do your own thing
  9. Do not Underestimate marketing .
  10. You become what you measure – Daily measure the various outcomes.

The stage is then set for Angad from Zomato who believes Building a Killer Product Needs more love 

He says that the branding, look and feel are very important for any product. Many start-ups have product managers, but these product managers need to manage products and not the people. The Product Manager needs to understand the product, the technologies which you are working with, have you every built such a product, do you understand your people, your customers and do you understand the competitors customers. 

A product manager should live, breathe, eat, sleep the product. He should empathize with the users, understand their needs and keep a lot of free time enabling him to explore, experiment and evolve new products. 

A Company should ask : WHY are we building it and WHO are we building it for before WHAT are we building it for. 

Work backwards from the problem to the solution and strike a balance. Rethink and Re evolution of products is necessary. Dream a little before being practical; to reach the solutions by breaking all the rules while doing good research, research without passion is pointless, that is the commitment to make something great. Take your time building a product but don’t overbake or underbake the pie. Its very important to seek feedback but from people who give solutions to problems and not just simple problems. Customers are not as dumb as you think respect them and give them value for the product. Usability of the product is important followed by the Utility and then the desirability of the product.’ 
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Design is a very important aspect of all Killer products, it comes from a good strong design culture with a sharp focus backed by clarity of thought working with autonomy with the best people pushing the limits with their passion and conviction to achieve the Vision. A fact which is very often overlooked. 

We then moved onto the session where we featured a new company, this time it was ReviseWise.in a technology start-up. The company is India’s 1st Mobile Platform making learning and revising “Simpler Faster, Anytime Anywhere”. The company hopes to increase engagement between educators and students via mobile networking and applications, to accomplish a positive effect on learning, assessing, improving and achieving. The participants shared there product and got feedback from the audience in relation to scaling their businesses. 
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After a very interactive 3 hr session the time was just right for everybody to go to the foyer and interact with the speakers as well as the participants and reflect on what was discussed. Everybody over the Gol Gappas were very excited to be present and shared some interesting conversations which kept people at it for a long time. Am sure all the people who came gained a good insight and the credit for that goes to Avinash who has set the ball rolling now with very successful #PNMeetups. 

We eagerly now await with child like eagerness for the next #PNMeetup in March. 

See you all again……