Web2.0 age !!!!!!!!!

About Venture Capital

Ben Holmes of Index Ventures's presentation on “Everything you need to know about Venture Capital- worth viewing.

JOB culture in India

I find an interesting comment while reading this post on Texas start-up blog.This comment not only reflect poor "job " oriented attitude of Indina graduates but also tells us how it affects entrepreneurial ecosystem of India.

Comment goes like this:


" I started a small outsourced projects development business in early 2005 but it got burst after 9 months of operation because it’s really hard to find developers who code in open source .. if you make a visit to Tata, Infosys, Wipro and others you’ll find that these giants work on Microsoft, IBM based product lines .. not open source products. Most of the developers working in these companies don’t even know what PHP is .. RubyonRails (such a hype) but if you catch someone from infosys and ask them what it is .. ummm .. “No idea”.

The basic job culture in India is just to get a job after graduation and work for some big company. Entrepreneurship doesn’t exist in IT here (I don’t deny that only people who can’t get a damn good job in IT giants OR are totally focused on their own ideas and stuff .. they start their own small business). My parents have been always bullying me to get a job .. I am 27+ and successfully provide independent consulting (one man show and earning good living) but still in my parents eyes I am not settled because I don’t work for some big IT giant.

Even if you see Silicon Valley in CA you’ll see thousands of technopreneur there (small to big) .. in India you see only big .. and these big ones have their backbone in Silicon Valley, CA. Only giants such as Infosys, Tata, Wipro others have their own standing.

Anyways, let’s come back to topic .. a lot of businesses fail in India because of

1. Power cuts (don’t even know how long electricity will be off for)

2. Lack of good locations to setup a business (the one that exist are either too expensive to rent a space OR rent a space in local market which is always noisy and doesn’t even give a feel that you work something different than the local grocers).

3. Lack of people resources (small company can’t afford to pay like giants .. thus parents don’t allow their kids to work for smaller companies).

4. There is a stupid mentality that smaller companies working on open source products are just bunch of idiots trying to run them. Even today morning I had a talk with my dad .. and he was just pushing on one point that smaller companies never tend to exist in the market.

"

Well I already discussed location issue in my previous posts.What I find most worrying is the "job attitude" of Indian graduates.Its not very difficult to understand why they make such decisions..Curriculum are outdated and discourage creativity and initiative leading to a system dependent graduate, college and faculty hardly provide career counselling and are more focus on improving " placement record" of college, risk averse parents put pressure to take a job in MNC no matter what is the quality of that job is,peers joining MNC create an very unmotivating environment for a graduate to join start-up.

But I guess they miss the bigger picture.They forget that we are living in different times compare to our parents and siblings.With world getting smaller and smaller everyday, India growing at 9 % growth rate,and reforms and opening of other sector give unique and unparalleled opportunity for this generation graduates.This is time to focus on careers rather then looking for jobs.

Bootstrap in Bangalore: A must read blog

I come across this interesting and very very practical blog today.Author of this blog Saurabh Chandra, an enterpreneur who has recently bootstrapped his company Neevtech in Bangalore.

I like every single post in this blog. I like the detail in which he explain the process of bootstraping a start-up in stepwise manner.He took great effort to explain every aspect of starting a company in India.I was looking for such eleborate understanding of starting a company in India.I am sure every aspiring enterprenuer will find somthing to learn from his blog.

Thanks to Saurabh Chandra for writing such a useful blog.

Tandem Entrepreneurs: the Indian Y-combinator?

Y Combinator’s funding methodology of investing a small amount of money across a wide array of young entrepreneurs has inspired Sunil Bhargava to start tandementrepreneurs.



Fantastic Idea.There philosophy is very simple which goes like this:

"We invest our sweat and usually less than $1MM in a startup over a period of 2 years working in tandem with the founders. We are much more like Y-combinator than Sequoia. We don’t consider ourselves a VC like Sequoia because we work so closely with founders and view more modest exits as a success. We love Y-Combinator’s approach, but they just help a company get out of the gates. We engage for a much longer period and happen to invest more time and money in each business."

Low investment,low exits model very well suits present day business model of internet start-ups.Incubation Team is small but is with good credentials.I like there site (epecially the drwaings). It is very cool,original and express the idea very well.

But either intentionally or un-intentionlly they forget to mention market they are trying to address.Right now they are california based incubators so obvious markets seems to be US's bay area.Its not clear weather they would be interested to be "INDIAN YCOMBINATOR" or not.

To me there is desperate need for such program for Indian market.Lot many indian entreprenuer seek capital,advice and connection that such program can provide.

Branding

Word of Mouth Marketing

Mobile Monday Delhi holding its 3rd Meet

Mobile Monday is a open community of mobile professionals and enthusiasts. It is a forum to network, share knowledge and discuss developments in the mobile world.Founded in Helsinki (Finland) in 2000, it has more than 25 chapters worldwide.

Its objectives are to

a)Promote local mobile industry, entrepreneurs and technologies
b)Facilitate networking, cooperation, partnerships and business development
c)Foster cooperation among individuals, academia and industry
d)Educate public about mobility through events, online presence and media partnerships

Mobile Monday's Delhi Chapter aims to bring together mobile enthusiasts, developers, technologists, business folks, entrepreneurs, VCs under a common forum. The chapter would channelize efforts to develop an active mobile community that can network and share information

Mobile Monday's Delhi Chapter is organising its third meet on 26th May at Abobe Noida.

Mobile Monday is for you if you are a

1)Mobile Developer (Application/Middleware/System/Hardware) or Enthusiast (Gamer/Power User/User in general and want a feature implemented)
2)Mobile Service Provider or Content Provider or Content Aggregator
3)Venture Capitalist, Technocrat, Entrepreneur
4)If ou are regular reader of this blog :)

For more info visit http://momodelhi.pbwiki.com/MoMo3

Indian SNs loosing ground

Green:fropper Blue=minglebox Black=goyaar Red=yaari

First let me confess that I don't know about any free tool other then alexa to measure the progress of of web 2.0 sites.Consequently I had excepted Alexa with all its flaws :).

Now as we can see from above graph most of the sites are loosing ground.I know its too early to declare anything ,for most of the SN sites are less then year old.But still there is noticable consistency in fall ,specially in case of fropper. Other 4-5 sites that like DesiMartini, Pihook, Snehah, Humsabka, Jhoom are almost dead.Only SN site that seems stable other then orkut is minglebox which is most evolving among all SN sites.

Some of my observations (as a user ):


Poor design or UI
Many of them are very heavy sites with lots of graphics.If site is not using AJAX browsing will be slow and hence boring.Since we don't enjoy the real broadband ,India focused SN must be design their sites accordingly.

Lack of visibility
Many fail to invest time, energy and money in PR and marketing. As a rule if you are new but not first or biggest player in a market you must define ,differentiate and make yourself visible.Viral marketing is ideal but in a crowded market branding required more then just viral marketing.

Monetising too early
Many of them started monetising before gathering a minimum base users.I guess lots of creativity is needed in designing a site with lots of add that will not irritate users.Even the some better known and growing SNs like hi5 failed in this area. Google is better player when comes to monetising its sites without irritatinig its users.

No Localisation
Although most of the sites claim to be Indian there is hardly any Indianess in there site.I was expecting MTV like cultural makover of myspace into indian myspaces.Indian langauges support could have add personal touch.So much could be done to personalise a SN.Since indian sites dont have supporting web community to give addon to their sites like layouts they have to do all the innovation which is a challenge. Without locatlisation every indian SN have to compete at global level.

I am suprised with thse slow learning of most of players.If you are loosing users there must be some valid reason.They have access to user data that can be very weel expoited to enhance user experience every time he login to site.Lot more innovation is required from site designers.

Presently SNs are success becoz they give presence on web to its user.But they must evelove to add more value and find define a worthy purpose for its users.

Does social networking phenomenon is over in India?

When I joined orkut in july last year I had no idea I am joining a new internet revolution better known as web 2.0.I was surprised to see everyone I know was there on orkut. They spent hours on orkut scraping everything to share and searching their lost school and college mates. All of them got own identity on web.

After one year it seems the whole magic of social networking is fadding. There is tangible fall i user activities on these sites. People scrap only on festivals and special occasions.No more search or lost friends.Gals ,earlier excited with attention these sites got them, are frustrated with unsolicited friendship requests.Boys are unhappy with no response from gals.Charm of meeting the special one is gone. Some of them feel that social netwoking thing is not for "grown -ups". In fact many of them find this whole thing a total time waste.The only utlity sites served is geting them "presence on web".But they are now questioning the value of this presence on web.

So, does the social networking phenomenon is over?Is it over locally or globally?

I wonder how mypace,friendster,facebook are growing with million of users and where this will end eventully.

High-Performance Entrepreneurship

One person in IT industry I admire and respect vey much is Subroto Bagchi. He is the chief operating officer of Mindtree Consulting which he stared with his 10 colleagues in 1999. I was avid reader of his essays in Times of India.

In following interview he shared his views on various topics he covered in his book The High-Performance Entrepreneur: Golden Rules for Success in Today's World.

What I like most is how succantly he defined "High-Performance Entrepreneur".

"Anybody can set up a "mom and pop shop" and become an entrepreneur. You have the multitude of small- and medium-sized organizations which come and go. High-performance entrepreneurship, on the other hand, sets itself apart by a multiple of things. One is the size of the ambition. The second is the sustainability. So, high-performance companies, high-performance entrepreneurships, are ones that will build unusual value for a long time, for a large number of stakeholders. And fundamentally, they differ from any other entrepreneurship in terms of size of the ambition and how much of a long view of time they are taking."

For any aspiring indian entrepreneur interveiw is good read.

Location location location :Part 2

On of the decision all entreprenuers have to take is find right location for start-up their venture.In USA most of the technology start-ups are clustered in California or Silicon Valley.In India we have most start-ups coming from Delhi or Banglore.

I just wondering what effect does location have on success or failure of start-ups?

In following essay by Paul Graham , he opinioned that one of the start-up mistake is bad location. He elborate why some location have more start-ups then other as

"that's where the experts are. Standards are higher; people are more sympathetic to what you're doing; the kind of people you want to hire want to live there; supporting industries are there; the people you run into in chance meetings are in the same business"

But I don't think any entreprenuer took all this into account while selecting location for his start-up.In most case choosing right location may not be high priority decision.

Most ventures from are located where their founders resides.What possibility we have that a guy eager to start software company will relocate to Bangalore just to start a bussiness.

At best what a entrepreneur tend do is to get started from a location enough for his or her venture.

Right location for start-up

My MNC company is located in Noida and I am staying at North campus ,23 km from Noida.Yesterday I left my office at 10.00 pm and reached home at 11.15 pm. Everyday I spend 2 hour or so in commutation. Time used in travelling is not only unproductive but also make me unproductive for extended period of time.Luckily my company have Flexi-time policy and provide as prompt transport facility.

I could stay in Noida but cost of living is too high for the quality fo life it offers me.Frequent and long power cuts,unreliable and unadequate public transport ,and constant sense of insecurity make Noida a undesirable place for me.In summers weather in this part of India is unbearbly cruel.Life becomes really difficult if you have to live without power and water.

All major cities in India face similar problem of traffice jams,long hour power-cuts and poor public transport system.These problem coupled with high rate of real state makes metros not the best locations for a start-up venture.

So question is does delhi in particular and Metros are right places to jum start a venture? Do they have right support system for start-ups?

A start-up want lots of local talent,good living standard, low cost of living,working public transport system, continues and reliable power supply,and comfortable weather.Not many cities in india provide all but definetly they can and will be developed in coming years to give most of these facilities.With rise of tier 1 cities I think this is time to move from metros.

So which city in next bangalore in India?

New Blog for growing start-ups

Edited by Carleen Hawen Found+Read, GigaOm’s newest blog, will be a must-subscribe to resource for all budding entrepreneurs. It is intenteded to be platform where experts come on and share their experiences in building companies. Malik says he is starting this becasue he’s gone through growing pains building his own business over the last year, and realized that most of the hurdles he had to jump weren’t new, just new to him. He’s hoping Found+Read can become a resource for others to get advice as they grow their companies. This just launched last night, so content will be light for a while until it builds up

Start-Ups to Watch

This weeks edition of Business-today listed start-ups to watch .In this article they listed following then companies.


24X7 LEARNING SOLUTIONSVirtual University
NAME OF COMPANY: 24x7 Learning Solutions
YEAR OF FOUNDING: 2001
FOUNDERS: Karthik K.S. & Anil Chikkara
AREA OF OPERATION: E-learning
FUNDING: KITVEN and Anil Garg; to raise $10 million over two years
REVENUE: $3 million
SIZE OF TARGET MARKET: Globally $28 billion; In India, Rs 350 crore
KEY COMPETITORS: IBM, Sum Total, Gurukul Online, NIIT, Aptech and Blue Apple


NAME OF COMPANY: Adventity
YEAR OF FOUNDING: July 2003; Commenced operations in January 2004
FOUNDERS: Kumar Subramanian, Ulhas Deshpande, Niket Patankar, Jagdish Iyer and Vivek Arora
AREA OF OPERATION: BPO/ KPO
FUNDING: Undisclosed 'steel and plastics' group in India ($10.5 million), Norwest Venture Partners ($20 million)REVENUE: Roughly $25 million
SIZE OF TARGET MARKET: $17 billion (just the KPO bit)
KEY COMPETITORS: Amba Research and B2K Corporation


NAME OF COMPANY: Drishtee Development & Communication Limited
YEAR OF FOUNDING: 2000
FOUNDERS: Satyan Mishra, Nitin Gachhayat and Shailesh Thakur
AREA OF OPERATION: Provides ICT (information, communication & technology) services to rural India
FUNDING: Acumen holds a 25 per cent stake for which they paid $1 millionREVENUE: Rs 3.87 crore for 2005-06
SIZE OF TARGET MARKET: Currently caters to 300,000 customers. Target market is whole of rural India, which is 650 million people
KEY COMPETITORS: ITC's e-choupal

NAME OF COMPANY: Guruji.com
YEAR OF FOUNDING: 2006
FOUNDERS: Anurag Dod and Gaurav Mishra
AREA OF OPERATION: SearchFUNDING: $7 million, Sequoia
REVENUE: N.A.
SIZE OF TARGET MARKET: $20 million*
KEY COMPETITORS: 123India.com, Justdial.com, Khoj.com*Current search market for search queries originating from India

NAME OF COMPANY: JiGrahak
YEAR OF FOUNDING: 2003
FOUNDER: Sourabh Jain
AREA OF OPERATION: M-commerce
FUNDING: $ 2.2 million, Hellion Ventures
REVENUE: N.A.
SIZE OF TARGET MARKET: N.A.
KEY COMPETITORS: Paymate, mChek

NAME OF COMPANY: Asia Cryo-Cell
YEAR OF FOUNDING: June 2004
FOUNDER: S. Abhaya Kumar
AREA OF OPERATION: Private Banking of cord blood; research and therapy applications using cord blood
FUNDING: Rs 20 crore, largely by Abhaya Kumar; remainder from investors like P.S. Pai and other individuals
REVENUE: Rs 15 crore
SIZE OF TARGET MARKET: N.A.
KEY COMPETITORS: Reliance Life Sciences; Karnataka Cryogenic; Cord Life

NAME OF COMPANY: Nautanki.TV
YEAR OF FOUNDING: November 2006
FOUNDERS: Sunil Nair, Vikram Prabhu and Herumb Khot
AREA OF OPERATION: Online TV channel
FUNDING: Rs 1.5 crore from founders and two investment bankers in their personal capacity
REVENUE: Advertising revenue approximately Rs 12 crore by March 2008 ( first full-year operation)
SIZE OF TARGET MARKET: Internet advertising market in India to be Rs 750 crore by 2009-10 (source: PwC)
KEY COMPETITORS: None yet

NAME OF COMPANY: Onyomo
YEAR OF FOUNDING: January 2006
FOUNDER: Shailesh Mehta
AREA OF OPERATION: Person to Application (P2A) segment of mobile value-added services, including SMS sent by end users for contests and for seeking other information
FUNDING: Shailesh Mehta and IIT Delhi (in talks with VC and PE investors for large funding) REVENUE: Won't reveal before the commercial launch
SIZE OF TARGET MARKET: Rs 428 crore for 2006 (source: IAMAI)
KEY COMPETITORS: Ziva Software, Bangalore

NAME OF COMPANY: Seventymm
YEAR OF FOUNDING: 2005-commercial operations started in March 2006
FOUNDER: Raghav Kher
AREA OF OPERATION: Organised movie rental-part of the home video segment
FUNDING: Initial funding from Draper Fisher Jurvetson ($2 million) and second round led by Matrix Partners India ($7 million)
REVENUE: N.A.
SIZE OF TARGET MARKET: Home video market Rs 2,100 crore by 2009-10 (Ficci-PwC 2006 report)
KEY COMPETITORS: Mad House and Clickflix

NAME OF COMPANY: UFO MoviezY
EAR OF FOUNDING: 2005
FOUNDERS: Raaja Kanwar and Sanjay Gaikwad
AREA OF OPERATION: Digital cinema
FUNDING: Initial funding of Rs 100 crore from Apollo Group and second round of Rs 100 crore from private equity firm 3i
REVENUE: First full-year operations 2007-08-Rs 100 crore
SIZE OF TARGET MARKET: Rs 10,000 crore by 2009-10
KEY COMPETITORS: Only player in the market


There are some surprises. There are some unknown or lesser known names while some better known start-up like Makemytrip, TravelGuru,Zoho etc are missing.

I

Entrepreneurial Proverbs

Internet is such a wonderful thing!!!!!!!!!!!!!!! Every day you find some "food for thought", something that stimulate our mind .Today I got these pears of wisdom by Marc Hedlund.

I am going to take printout of it and paste it on my walls.

Starting

It's good to be king -- being an entrepreneur is the best job I've had. Every day your job is new and different; you constantly have to push yourself in new directions. You no longer have to say, "Well, I'm just an engineer, but..." -- you have a great excuse to take an interest in everything. Working in an environment you shaped to your own beliefs about how a company should be run is incredible (and humbling!). And of course there are sometimes financial rewards, although it's still a great job regardless.

Losing sucks -- shutting down a company is unbelievably difficult. It affects your home life, your health, your job prospects, your financial stability. Professional investors are grown-ups, but it's still extremely disheartening to lose the money people invested based on belief in you. If your backers include friends or family, it's extremely difficult to have to tell them the company is closing and their money is gone. Most entrepreneurs fail several times before succeeding, too, so losing is both terrible and nearly inevitable. Fight as hard as you can against it.

Building to flip is building to flop -- this is taken from Jason Fried, and he's right. People who start out with only one goal, to sell to a big portal, will find their options are too limited. Plan as many paths to success as possible for your company, and always have a Plan B when acquisition (or whatever path you choose first) doesn't work.

Prudence becomes procrastination -- it's great to research your market and talk to potential buyers about your ideas. It's terrible to let an excess of this become a impediment to getting started. Too much prudence edges away from research and into procrastination.

Momentum builds on itself -- just start. Do whatever you can. Draw a user interface. Write a spec. Make something, anything, that people can see and touch and try. A prototype is worth ten thousand words. Once you start moving, you will find that people start to carry you along.

Jump when you are more excited than afraid -- lack of fear is irrational, and too much fear is debilitating. Make the jump into your business when you have considered the fear, and come out more excited than afraid.

The Idea

Pay attention to the idea that won't leave you alone -- this is taken from Paul Hawken's Growing a Business. Sometimes an idea catches hold of you and you find you can't put it down. Pay attention to that! Just start working on it. Can't get yourself to do anything on it? Move on. Find yourself waking up out of bed to write down new ideas about it? That's a good one to choose.

If you keep your secrets from the market, the market will keep its secrets from you -- entrepreneurs too often worry about keeping their brilliant secrets locked away; we should all worry much more about springing a surprise on a disinterested market (anyone remember the Segway?). To quote Howard Aiken: "Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats."

Immediate yes is immediate no -- does everyone immediately tell you your idea is great? Run away from it. If the idea is that obvious, the market will be filled with competitors, and you'll find yourself scrambling. One good test: when the New York Times Magazine puts out its annual "Year in Ideas" issue, is your idea in it? Then don't do it. You're already too late.

Build what you know -- this is the most basic advice of idea generation: scratch an itch you have yourself. To make a great company, stop and ensure that your need is broadly felt, and that your solution is broadly applicable -- not everyone spends their life in front of a computer, remember.

Give people what they need, not what they say they need -- interviews are tricky. People will swear up and down that they would buy a product you describe if only it were available, and then fail to do so as soon as it is. Likewise, in conversation an idea can sound terrible, but in actualization the idea can become a compelling product. You have to sherlock out the truth of the interest people express, and "yes/no" questions are usually less useful than "how much" or "how bad" questions.

Your ideas will get better the more you know about business -- engineers hate to hear this, but you can generalize up quite far from here: the more you know about everything, the better all of your ideas will get! If you want to start a business and your strength is in development, learning about pricing, sales, marketing, finance, and yes, even HR, all of it will make your product ideas stronger and better.

People

Three is fine; two, divine -- having too many co-founders makes decisions hard to reach; if you're on your own, you have to bear all of the stress and worry about the success of the company. In my judgment, three people can do well together, but having two founders is best.

Work only with people you like and believe in -- I once heard Eric Schmidt say something along the lines of, "The older I get, the more I think all that matters is working with people you like." If you're smart and talented, you're probably going to like a lot of smart and talented people. Working with people you like is so much more fun, and often more productive, than fighting against someone who may be smart and talented but just isn't a great fit for you.

Work with people who like and believe in you, just naturally -- maybe you are very persuasive, and can talk people into working with you against their better instincts. Especially for co-founders and early employees, don't try that hard. Find the people that naturally want to work with you, and nudge them into the roles where you need them. You'll have more fun and get more done.

Great things are made by people who share a passion, not by those who have been talked into one -- a corollary of the last; you can spark a passion in someone, but you can't do it without some fuel to catch. Better to wait, and find the person who is already inclined to believe in your cause. You may talk someone into co-founding a company with you, but will they stick with it through ups and downs if they had to be persuaded that hard?

Product

Cool ideas are useless without great needs -- this is the classic engineers' entrepreneurial mistake (or at least I'd like to think so, since I've made it). Techies love tech, and a new technology can produce a lot of companies that don't really meet a need. Better to start with the need, and then see how what you know can produce a better answer to that need. (Marketers tend to have the opposite problem: real, pressing needs with completely unworkable solutions.)

Build the simplest thing possible -- engineers have the hardest time with this, with not overdesigning for the need they're addressing. Make the simplest possible product that makes a significant dent in that need, and you'll do far better than you would addressing two or three needs at once. Simplicity leads to clarity in everything you do.

Solve problems, not potential problems -- you can waste a lot of money implementing solutions for problems you don't have yet, and may never have. Work on the biggest, most pressing problems today, and put aside everything else.

Test everything with real people -- it's unbelievable how helpful this is. Go find civilians, real people who use computers because they have to and not because they love to. Find them in Starbucks, or at the library, or in a college computer lab. Give them $20 for 20 minutes, and you'll be paid back a hundred times over.

Money

Start with nothing, and have nothing for as long as possible -- small budgets give big focus (probably another line I'm stealing from Jason Fried: it sounds like something he'd say...) Don't go out and raise a ton of money right away. Instead, give yourself just enough to get going, and use the limits that imposes to motivate yourself.

The best investor pitches are plainspoken and entertaining (not in that order) -- think about what this implies. A plainspoken pitch is the surface of a very solid business. If you have to fudge and lie to get investors interested, why is that? If you're running a great business, it is not hard at all to lure investors into it; the worse your business, the bigger (and more odious) your fundraising task is. Entertaining implies a fun person to work with, and VCs like working with people they like as much as the rest of us do. If you don't bring the funny, bring the person who brings the funny.

Never let on that you're keeping a secret -- telling an investor "I don't want to talk about that" is terrible. It's the natural converse of being plainspoken. It's good to be aware, though, that some potential investors will listen to you and then share your information with your direct comptitors, and not always because they're invested in those comptetitors. Knowing that, you have to keep some secrets -- but be as diplomatic about that as possible. Respond to the idea behind the question, without giving away more than you feel comfortable discussing. Learn to steer the conversation in the way you want it to go. And then give up more information as you become more comfortable with the potential investor.

No means maybe and yes means maybe -- you should never take a "no" from someone you want to work with. Accept the no, ask for feedback, and then just keep sending them updates on how much butt you're kicking in the market. During one company, three of the five term sheets I collected came from VC firms that told me "no" originally. Conversely, though, the only money in the bank is actual money actually in the bank. Everything else is just a possibility, and you have to treat it as such. Don't stop fundraising until you have a firm commitment for the funding you need, and don't accept halfway promises like, "We'll fund you if another firm comes in." Keep on driving until the wire transfer is complete.

For investors, the product is nothing -- the classic engineer's VC pitch has ten slides about the product and two about the academic achievements of the founders. That's a terrible pitch. One slide should be about the product, while the rest cover the market, competitors, financials, funding history, and the relevant experience of the team. The product matters far less to most investors than the reactions of customers, the properties of the market, and the credibility of the team. Obsess about the product on your own time; present your business in all of its parts.

The best way to get investment is not to need it* -- if you have a running business with real customers and you're paying all your bills, you are much more likely to get a funding round than if you need the round in order to survive or succeed. The pitch that goes, "We could accelerate our growth with more money" is much more compelling than, "I need your money or our doors will close."

I'm sure other people have their own rules of thumb; what are yours?

Entrepreneurial Thoughts

Here are some of entrepreneurial thoughts by Joe Ollivier, First Capital Development.


It has to be a business that gives you an emotional high.

Avoid any business that is labor or inventory intensive.

Have independent market research done on the feasibility of your idea, then do test markets.

Don't think someone is waiting to steal your idea, it's paranoia.

Don't get started on a real business until you have someone (wife, husband, family member) who will listen to your dreams, sympathize with your failures and applaud your successes.

Never involve yourself in any service or product that requires a consumer attitude change.

Don't invest on home run schemes - invest in what you like and know.

Find a lifelong mentor as soon as possible. Have him continually play devil's advocate.

Have an exit point or harvest plan to cash out of each business you start.

Do a self awareness training. You are not your business, your background or your personal financial statement.

Pick a charity (other than a religious one) or a charitable activity where you have nothing to gain, and work at it every year.

Do some charitable acts each year in secret.

Keep a notepad next to your bed at night - some of your best thoughts will come during the night.

Get a week-at-a-glance planner. Each weekend make our a 3x5 notecard of activities you want to accomplish.

You don't need to keep 51% to control your company.

Find an aggressive banker and CPA, send them referrals and Christmas presents.

Be willing to take major risks, but be aware of risk versus reward. Don't ever even think about taking out Bankruptcy.

Have someone else do all your serious negotiating for you.

Have the attitude that everything that happens to you in your life is your own personal responsibility; you are never a victim.

Remember that you will learn much more from your mistakes and failures than your successes.

Trust everyone, but be aware that most people shade the facts and lie part of the time.

Live in the nicest, most expensive house you can. It will alter your view of yourself and the way others view you.

Remember that with each successful venture there was a time when the entrepreneur wished he was not involved.

Expect to be sued - it's normal - have the attitude that it's the person who's suing that has the problem.

Never sue unless there is real estate that can be attached.

Expect to become wealthy - do a financial statement on yourself each quarter.

Realize that money is power and can be used for great good.

Being an Entrepreneur means more than buying yourself a job. You need a salary to live, a return on your investment and a monetary reward for your risk.

In every entrepreneurial activity you enter make sure it's: 1. Fun and Interesting, 2. You are going to learn something, and 3. You add value.

Realize that business is really just a monetary game, and the things that mean the most -your character, your family, your own values, and your beliefs- are unaffected regardless of the outcome.

Red Herring 100 Asia

To celebrate the most innovative technology companies in the Asia Pacific region at Red Herring conducting Red Herring 100 Asia, August 29-31 in Hong Kong, China. Now in its third successful year, this high-profile event honors 100 cutting edge private technology companies from China, India, Japan, Singapore, Korea, Australia and Vietnam. Red Herring 100 Asia brings together an elite roster of entrepreneurial and global venture investment firms to showcase excellence in innovation.Asia’s top 100 startups from 2007 will be spotlighted, and many of their CEOs will share winning strategies in special keynote presentations. This event is a premier opportunity to exchange information and ideas, delve deeper into key topics, and network with peers and viable business partners

So if you think your compnay is working on some cutting edge technology and you want to talk about your technology and compnay I guess its a great plateform.

Apply here:http://www.herringevents.com/asia07/index.html

All the best!!!!!!!!!!!!!!!!!!

Web 2.0 Business Models

This is a comment from Michael Eisenberg blog sixkidsandafulltimejob.blogspot.com. I am very much impressed with the bravity of the comment. he is spot on.

"I am just back from a "cool web 2.0" IDB event (see http://www.ibdnetwork.com/index.php?option=content&task=view&id=156) Many companies presented, and the most common question from the panelists was "what is your business model". The ubiquitous response was "premium services and advertising" (PS&A). The audience did not buy this - at some point, when yet another cool web 2.0 entrepreneur responded PS&A, many in the audience actually laughed out. Smart crowd, I guess. You need substantial volume on your site in order to derive significant revenue from advertising. Most of these web 2.0 are one feature built around cool technologies – hard to believe they will drive enough traffic to support a substantial business. Premium services are even trickier – you must find an add-on service which is at least as useful as your basic free service. Plaxo, LinkedIn and the like did not figure that one out for years – and may never figure this out."


And for this comment i find another interesting comment there:
Right now, the internet market is a mess - full of customers who have no money and companies that do little but swallow the industry status quo (make everything free); hook, line and sinker. That said, the picture is more complicated and it may be the nature of the internet market it self that stops people building proper (as in, old fashioned) businesses.

Really, what we've just gotta see a proper fragmentation in the supply side of the market. We've gotta see companies sell premium quality services at premium prices - rather than having a homogeneous market of suppliers who commoditize each other.

A proper market has to be layered, as delimited by pricing different strategies between discount, at market and premium suppliers.

Of course, it wouldn't hurt if the majority of consumer internet weren't pennyless college kids (not that there is anything with that).

Now, on the contrary, trying to move away from marketing free software may be more of a problem that first seems. Basically, why on Earth should I try to build a real business (i.e. sell something) if in 12 months, what ever I am selling is gonna be technologically obsolete....



I think who ever imagines that any internet startup existing today will survive for even the next 5 years must be kidding them selves. After all, this is the software business and innovation around here happens a lot faster than I can restructure my product line.So what do I do if I just don't have the time to grow organically, charge through the roof and build sales teams etc....?Well...that's what happens, I take the next best option, do a bit of gambling and spell it out and clear that my business model is rolling dice in the hope of capital gains.

I know, sounds crazy....but is it really?

How to Build a Web 2.0 Technology Startup

I find this pithy artical on net. Its quite relevent and to the point.


The recent wave of Web 2.0 technology products is an indicator of today’s entrepreneurial vitality. Log onto Techcrunch, and you’ll likely see new several startups forming every day. Yet, there’s one continual theme you notice in every Web 2.0 startup: most technology startups haven’t opened their doors for the public.

Worse, grand opening announcements won’t come until several months later–if even that.
The problem with starting late? It delays those Web 2.0 startup companies from laying firm foundations for their companies. No, not their products, but the intangibles: professional connections, public inquiries, media relations, and whatnot. Most importantly, it stalls cultivating relationships with initial customers.

What should you do if you’re starting a Web 2.0 technology startup? If you’re planning on building an actual business, and not just selling out a product, here’s what we recommend:

Seek passion first. Profits, second.

Stop what you’re doing (or what you plan to do). Are you passionate about it? Do you live and breathe the idea, as if you were born to do it? It’s not just an opportunity, is it? The biggest crime we see entrepreneurs make involves jumping from opportunity to opportunity, thinking the next great idea exists in a specific industry. Then they fall prey to what we see as the entrepreneurial trap: they jump shark to the next “great” opportunity. Who can blame them? Sophomoric business books flaunt market opportunity.

Here’s two reasons why that’s total BS: First, what if a “greater” opportunity comes up afterward? You know it’ll happen. Will you jump shark? Probably.

Second: jumping from the next “great opportunity” will never augment your strengths. You’ll continually go to and fro, never finding a clear sense of direction, never building on top of the foundation you’ve pieced together. Instead, you’ll be like a bungling contractor — having good skills in various areas, but never seeking greatness.

Greatness lies not in finding and profiting from a great opportunity. Greatness lies in continually, repeatedly, and consistently enhancing your strenghts.

Michael Jordan wouldn’t be the most envious athlete if he had jumped over to Boxing in the 70s, Roller Derby in the 80s, Indy Racing in the 90s, and Poker in the 2000s. You shouldn’t jump at the next great opportunity as well.

Instead do this: Where does your passion lie? After living a good number of decades on this planet, a passion of some sort is already ingrained in you. Cultivate it.
Once you seek your passion, you’ll find new and greater opportunities popping up. Paradox indeed. Harvard’s Amar Bhide contends about successful startups: “once they are in the flow of business, opportunities often turn up that they would not have seen had they waited for the big idea.”

If you’re not passionate about what you do, you’re in the wrong line of business.
First, find your passion. Then, start building.


Start early. Get something out.

Once you find your passion, do something that relates to it that can give you good and steady cash flow.
Forget business plans. Forget finding the “perfect” idea. Instead, see cashflow as the king of your new Web 2.0 company. It’s your startup’s blood, and only source for survival. Most startups forget this. They believe they’ll wait until their final product comes to fruition, and then reap rewards.

The brutal facts? It’s far less than 5% likely that the product will achieve what the founder envisioned. Most startup businesses that succeeded, as a Harvard study indicates, didn’t leave all their eggs in one basket. Instead, they experimented with smaller projects. Once those succeeded, they exploited the momentum by building higher-cost products. The important cashflow, of course, kept them afloat.

Harvard’s Amar Bhide: “Get operational quickly. Bootstrappers don’t mind starting with a copycat idea targeted to a small market. Often that approach works well. Imitation saves the costs of market research, and the start-up entering a small market is unlikely to face competition from large, established companies.”


Forget being perfect.

You will fail. That’s okay. As you’re starting your Web 2.0 Startup, know this: Perfection kills progression. Failures fuel creativity; that is, of course, you don’t give up. Learn to fail. Failing is good. It drives you to understand where possibilities and opportunities exist.
For every major success you see, the media forgot to report the one thousand failures from the same person. While other Web 2.0 entrepreneurs are fearing failures and quitting because of it, you’re not. You see failures as a natural part of building a startup. You see failures as something others don’t: a driver to that next successful product.

Experiment!

If you forget perfection, you’ll open your doors to experimentation — the secret sauce for the most innovative companies. In the business world, you’ll learn that you can’t plan for anything. A million-dollar idea (in your mind, anyway) could very well bomb.

Media reports hailed the Segway as the next great thing. It was supposed to transform roads. It didn’t. It sucked, and venture capitalists no doubt regret their blunders. On the flipside, an invention appearing out of the blue might — just — net you a million dollars. Think eBay, Yahoo, Google, etc. etc.. The point? Ideas aren’t formed from thoughtful analysis. It’s formed from experimenting, and trying different things.

Learn to use the law of probability to help you.
Say one product has a 10% success rate. Then, getting one success out of two experimental products is 32% (i.e. 10% * 10%). Five experiments? 63%. The more you experiment, the greater your chance for success.

Forget product features. Seek purposeful innovation.

Having fun experimenting with all the new Web 2.0 features? Stop! Forget tagging, curvy corners, AJAX and all the other BS just for the sake having them. Just because others are doing it. Just because they say it’s essential for Web 2.0. Just because.
Technology products are built for humans. If you want to build the next great Web 2.0 product, ignore what people are doing on TechCrunch. Instead, spend your time understanding the human brain. Know people’s motivations. Understand their desires.
Abraham Maslow. That’s a start.Once you understand humans, you’ll understand precisely what Web 2.0 features you’ll need for your intended product.You will not see the next great technology company as the most innovative user of Ruby on Rails. Instead, the next great Web 2.0 Technology Startup will understand and cultivate human desires.

Cultivate early customers.

A Web 2.0 Technology Startup without a blog is a startup without a compass. Like Magellan, you’ll need a direction to steer your company. A blog helps you cultivate your first customer relationships, gives you important feedback on product wants/not-wants, and quickens the product development process.
Sure, you can get by without a blog. But, understand that every company needs its early adopters. We’ve found blogs to be the best way of doing that.

Have fun.

Yeah, all too-good-to-be-true success stories tell you to have fun. And, we’re not arguing with that sentiment. We feel entrepreneurs have the most exciting and adventurous career paths. It should also be the most enjoyable.

Please, have fun!

One final thought: In one hundred years, you won’t take your Web 2.0 startup money with you. Start leaving an imprint, a legacy that continually affects and consistently improves the lives of your surrounding communities.
And, world.
Word to your mother.

What to look for in an Internet investment

Nisan Gabbay of startup-reviews listed leading indicators for potential success in consumer internet start-up . Its gives us a very fresh and convincing prespective.

Product that fits the needs of an underserved niche

Conceptually this is pretty easy to understand, so I’m probably not providing an earth-shaking insight here. However, a company that has truly unearthed a market need that isn’t being met by other services and delivers upon that need with the right feature set and value proposition represents the best opportunity for an Internet start-up today. I think that the venture community tends to underestimate the potential of niches to transform themselves into the mainstream plays, which explains why companies like eHarmony, Newegg, Zappos, and Betfair were not backed by top tier VC firms until after they had proven their success.

Strong ability to leverage natural search as the primary means of user acquisition

I think this is probably the most under recognized opportunity area for Internet entrepreneurs and investors today. It is no secret that search engines, and Google in particular, have become the gateway to the Internet. Search query volumes continue to grow at a fantastic clip, and as such offer one of the best ways to acquire users at no cost. It is particularly appealing to start-ups, because search neutralizes the need for brand recognition.


Any company that can demonstrate an ability to achieve high natural search rankings for a high volume of search terms stands a good chance to become a success on some level. Recent examples here include Yelp and Digg, both of whom owe a great part of their success to natural search. In the case of Digg it was inbound linking from tech bloggers and for Yelp the production of a massive amount of searchable, local user-generated content that did not exist before.

Service that empowers people to make a living

Every Internet service needs power users, and I would argue that the best type of power users are those that have a vested personal financial interest in the success of that Internet service. There is probably no better example of this than eBay and the legion of people who earn either a full or partial salary from their eBay activities. iStockphoto is another good example, enabling semi-professional photographers access to the stock photography market, and some supplemental income for themselves. An emerging example is uShip, a company that is transforming the freight services market by leveling the playing field for sole proprietors.

Free (or near free) alternative for a previously high cost service

Again, not an amazing insight, but one that has been time tested on the Internet and hence I feel is worth re-iterating. Really this is just another way of framing the value proposition. Some good examples of this include Greenfield Online, the pioneer in online market research, Craigslist as a free alternative to classifieds, and iStockphoto for near-free expensive stock photography.

True viral distribution potential

A viral Internet service is one where each new user must involve friends to derive personal value from the service. This is best exhibited by communication and hyper-social services. Telling a friend is not an option; it is a necessity in order for the user to derive value from the service. Although it is easy to incorporate viral feature sets into any Internet service, actually getting users to utilize these features is quite hard unless they recognize the value they personally and immediately will receive by involving friends. Thus, while many Internet start-ups will claim to rely on viral marketing, only a select few will actually qualify as truly viral services.

Ability to jumpstart user acquisition through distribution partnerships

Having a distribution channel to jumpstart user acquisition isn’t a requirement, but it does increase the likelihood of success. Skype was able to acquire its first 500,000 users by being bundled with Kazaa. MySpace migrated users over from a dating service (CupidJunction) and made heavy use of database marketing. Bebo marketed to the install base of its established, sister property BirthdayAlarm.com. Even Digg launched via a TV show that reached 100,000+ of its target users (tech enthusiasts). As a counterpoint, successful services like Flickr, Craigslist, Piczo, RockYou, Xfire, and countless others did not benefit from proprietary distribution.

Story that lends itself to mainstream PR

Although many will claim the death of mainstream PR in Web 2.0, I would claim that it is still a key ingredient to achieving scale and mainstream adoption. Thus, companies that have the potential to be good PR stories after achieving some initial success, have a much greater likelihood of being break-away successes. The truth is, some services are sexy and make for good stories, whereas others do not. Companies like Hotornot and Craigslist made for great stories, and thus received massive amounts of press attention. More recent examples include MySpace, YouTube, and Zillow. Mainstream PR cannot provide the spark, but it can fuel the fire in a big way

Capital requirements of web2.0 start-ups

Here is VC's prespective on web2 start-up cost.

http://avc.blogs.com/a_vc/2006/12/web_20_is_a_gif.html

A Brief History of Hard Work, Adjusted for Risk

Seth Gobin wrote this intersting article on "hardwork" and its meaning in new economy.I find it quite amusing find it a good read.


Your great-grandfather knew what it meant to work hard. He hauled hay all day long, making sure that the cows got fed. In Fast Food Nation (Houghton Mifflin, 2001), Eric Schlosser writes about a worker who ruptured his vertebrae, wrecked his hands, burned his lungs, and was eventually hit by a train as part of his 15-year career at a slaughterhouse. Now that's hard work.

The meaning of hard work in a manual economy is clear. Without the leverage of machines and organizations, working hard meant producing more. Producing more, of course, was the best way to feed your family.

Those days are long gone. Most of us don't use our bodies as a replacement for a machine -- unless we're paying for the privilege and getting a workout at the gym. These days, 35% of the American workforce sits at a desk. Yes, we sit there a lot of hours, but the only heavy lifting that we're likely to do is restricted to putting a new water bottle on the cooler. So do you still think that you work hard?

You could argue, "Hey, I work weekends and pull all-nighters. I start early and stay late. I'm always on, always connected with a BlackBerry. The FedEx guy knows which hotel to visit when I'm on vacation." Sorry. Even if you're a workaholic, you're not working very hard at all.
Sure, you're working long, but "long" and "hard" are now two different things. In the old days, we could measure how much grain someone harvested or how many pieces of steel he made. Hard work meant more work. But the past doesn't lead to the future. The future is not about time at all. The future is about work that's really and truly hard, not time-consuming. It's about the kind of work that requires us to push ourselves, not just punch the clock. Hard work is where our job security, our financial profit, and our future joy lie.

It's hard work to make difficult emotional decisions, such as quitting a job and setting out on your own. It's hard work to invent a new system, service, or process that's remarkable. It's hard work to tell your boss that he's being intellectually and emotionally lazy. It's easier to stand by and watch the company fade into oblivion. It's hard work to tell senior management to abandon something that it has been doing for a long time in favor of a new and apparently risky alternative. It's hard work to make good decisions with less than all of the data.

Today, working hard is about taking apparent risk. Not a crazy risk like betting the entire company on an untested product. No, an apparent risk: something that the competition (and your coworkers) believe is unsafe but that you realize is far more conservative than sticking with the status quo.

Richard Branson doesn't work more hours than you do. Neither does Steve Ballmer or Carly Fiorina. Robyn Waters, the woman who revolutionized what Target sells -- and helped the company trounce Kmart -- probably worked fewer hours than you do in an average week.
None of the people who are racking up amazing success stories and creating cool stuff are doing it just by working more hours than you are. And I hate to say it, but they're not smarter than you either. They're succeeding by doing hard work.

As the economy plods along, many of us are choosing to take the easy way out. We're going to work for the Man, letting him do the hard work while we work the long hours. We're going back to the future, to a definition of work that embraces the grindstone.

Some people (a precious few, so far) are realizing that this temporary recession is the best opportunity that they've ever had. They're working harder than ever -- mentally -- and taking all sorts of emotional and personal risks that are bound to pay off.

Hard work is about risk. It begins when you deal with the things that you'd rather not deal with: fear of failure, fear of standing out, fear of rejection. Hard work is about training yourself to leap over this barrier, tunnel under that barrier, drive through the other barrier. And, after you've done that, to do it again the next day.

The big insight: The riskier your (smart) coworker's hard work appears to be, the safer it really is. It's the people having difficult conversations, inventing remarkable products, and pushing the envelope (and, perhaps, still going home at 5 PM) who are building a recession-proof future for themselves.
So tomorrow, when you go to work, really sweat. Your time is worth the effort.

Seths godin's The realistic entrepreneur's guide to venture capital

Optimism is a key to success, but it doesn't necessarily work so well when it comes to VC. Because this is a cottage industry with thousands of players, all with different objectives, it's very easy to keep knocking on doors, just waiting to find the right match. It's also easy to spend a year or more adjusting your business to what each VC asks for ("bring me the broomstick of the wicked witch!" while you could have been out there building a real organization.)
Here are a bunch of conditions that you ought to take seriously before you invest the time and the energy to track down outside money for your great idea:


1. Investors like to invest in categories they've already invested in. If your business is so new that it's never been tested before, or is in a category VCs hate, think twice.

2. Investors want you to sell out. As soon as possible. For as much as possible. They have no desire to own part of your company forever.

3. Investors want to invest in a project that's tested. If you can't make it work in the 'small', why do you think it'll work when it's big?

4.Being a little better than the market leader is worthless.

5.Investors don't want you to use their money to cover your losses. They want you to build an asset (a patent, an audience, channel relationships) that's actually worth something.

6.Investors want someone to run your company who has successfully run a company before.

7.Investors want to be able to come to one of your board meetings and still make it home in time for dinner.

8.VCs like curves more than they like cliffs.

9.There are actually very very few business problems that can be solved with money.

10.You will probably have to replace many of your employees if you raise money from someone.
11.VCs understand that being the best in the world (#1) is the place with the biggest rewards, so it's unlikely they will settle for any performance (even a profitable one) that puts you in second or third place.

12.VCs are very smart and very connected, but they're smart enough to know that their connections and their insights can't fix a broken business.

13.Investors are very focused on the company, not you. They're not interested in having you take out your original investment or paying you a large salary as profits go up.

14.Business plans are bogus. The act of writing one is critical, but no one is going to read more than three pages of what you write before they make a decision.

15.The companies that VCs most want to invest in are the companies that don't need their investment to survive.

Ten Rules for Web Startups

A few friends and colleagues have linked to Evan William's Ten Rules for Web Startups.Its a good read

#1: Be Narrow

Focus on the smallest possible problem you could solve that would potentially be useful. Most companies start out trying to do too many things, which makes life difficult and turns you into a me-too. Focusing on a small niche has so many advantages: With much less work, you can be the best at what you do. Small things, like a microscopic world, almost always turn out to be bigger than you think when you zoom in. You can much more easily position and market yourself when more focused. And when it comes to partnering, or being acquired, there's less chance for conflict. This is all so logical and, yet, there's a resistance to focusing. I think it comes from a fear of being trivial. Just remember: If you get to be #1 in your category, but your category is too small, then you can broaden your scope—and you can do so with leverage.

#2: Be Different

Ideas are in the air. There are lots of people thinking about—and probably working on—the same thing you are. And one of them is Google. Deal with it. How? First of all, realize that no sufficiently interesting space will be limited to one player. In a sense, competition actually is good—especially to legitimize new markets. Second, see #1—the specialist will almost always kick the generalist's ass. Third, consider doing something that's not so cutting edge. Many highly successful companies—the aforementioned big G being one—have thrived by taking on areas that everyone thought were done and redoing them right. Also? Get a good, non-generic name. Easier said than done, granted. But the most common mistake in naming is trying to be too descriptive, which leads to lots of hard-to-distinguish names. How many blogging companies have "blog" in their name, RSS companies "feed," or podcasting companies "pod" or "cast"? Rarely are they the ones that stand out.

#3: Be Casual

We're moving into what I call the era of the "Casual Web" (and casual content creation). This is much bigger than the hobbyist web or the professional web. Why? Because people have lives. And now, people with lives also have broadband. If you want to hit the really big home runs, create services that fit in with—and, indeed, help—people's everyday lives without requiring lots of commitment or identity change. Flickr enables personal publishing among millions of folks who would never consider themselves personal publishers—they're just sharing pictures with friends and family, a casual activity. Casual games are huge. Skype enables casual conversations.

#4: Be Picky

Another perennial business rule, and it applies to everything you do: features, employees, investors, partners, press opportunities. Startups are often too eager to accept people or ideas into their world. You can almost always afford to wait if something doesn't feel just right, and false negatives are usually better than false positives. One of Google's biggest strengths—and sources of frustration for outsiders—was their willingness to say no to opportunities, easy money, potential employees, and deals.

#5: Be User-Centric

User experience is everything. It always has been, but it's still undervalued and under-invested in. If you don't know user-centered design, study it. Hire people who know it. Obsess over it. Live and breathe it. Get your whole company on board. Better to iterate a hundred times to get the right feature right than to add a hundred more. The point of Ajax is that it can make a site more responsive, not that it's sexy. Tags can make things easier to find and classify, but maybe not in your application. The point of an API is so developers can add value for users, not to impress the geeks. Don't get sidetracked by technologies or the blog-worthiness of your next feature. Always focus on the user and all will be well.

#6: Be Self-Centered

Great products almost always come from someone scratching their own itch. Create something you want to exist in the world. Be a user of your own product. Hire people who are users of your product. Make it better based on your own desires. (But don't trick yourself into thinking you are your user, when it comes to usability.) Another aspect of this is to not get seduced into doing deals with big companies at the expense or your users or at the expense of making your product better. When you're small and they're big, it's hard to say no, but see #4

7: Be Greedy

It's always good to have options. One of the best ways to do that is to have income. While it's true that traffic is now again actually worth something, the give-everything-away-and-make-it-up-on-volume strategy stamps an expiration date on your company's ass. In other words, design something to charge for into your product and start taking money within 6 months (and do it with PayPal). Done right, charging money can actually accelerate growth, not impede it, because then you have something to fuel marketing costs with. More importantly, having money coming in the door puts you in a much more powerful position when it comes to your next round of funding or acquisition talks. In fact, consider whether you need to have a free version at all. The TypePad approach—taking the high-end position in the market—makes for a great business model in the right market. Less support. Less scalability concerns. Less abuse. And much higher margins.

#8: Be Tiny

It's standard web startup wisdom by now that with the substantially lower costs to starting something on the web, the difficulty of IPOs, and the willingness of the big guys to shell out for small teams doing innovative stuff, the most likely end game if you're successful is acquisition. Acquisitions are much easier if they're small. And small acquisitions are possible if valuations are kept low from the get go. And keeping valuations low is possible because it doesn't cost much to start something anymore (especially if you keep the scope narrow). Besides the obvious techniques, one way to do this is to use turnkey services to lower your overhead—Administaff, ServerBeach, web apps, maybe even Elance.

#9: Be Agile

You know that old saw about a plane flying from California to Hawaii being off course 99% of the time—but constantly correcting? The same is true of successful startups—except they may start out heading toward Alaska. Many dot-com bubble companies that died could have eventually been successful had they been able to adjust and change their plans instead of running as fast as they could until they burned out, based on their initial assumptions. Pyra was started to build a project-management app, not Blogger. Flickr's company was building a game. Ebay was going to sell auction software. Initial assumptions are almost always wrong. That's why the waterfall approach to building software is obsolete in favor agile techniques. The same philosophy should be applied to building a company.


#10: Be Balanced

What is a startup without bleary-eyed, junk-food-fueled, balls-to-the-wall days and sleepless, caffeine-fueled, relationship-stressing nights? Answer?: A lot more enjoyable place to work. Yes, high levels of commitment are crucial. And yes, crunch times come and sometimes require an inordinate, painful, apologies-to-the-SO amount of work. But it can't be all the time. Nature requires balance for health—as do the bodies and minds who work for you and, without which, your company will be worthless. There is no better way to maintain balance and lower your stress that I've found than David Allen's GTD process. Learn it. Live it. Make it a part of your company, and you'll have a secret weapon.

#11 (bonus!): Be WaryOvergeneralized lists of business "rules" are not to be taken too literally. There are exceptions to everything.

The World's Top Web Markets

Comscore has a new ranking of countries by Internet usage. If I were the CEO of a Web company planning to expand worldwide, I'd hit these countries in this order:

Top Countries by Internet Penetration (Unique Visitors)

Jan-07 Percentage (000) Change
Worldwide 746,934 10%
United States 153,447 2%
China 86,757 20%
Japan 53,670 4%
Germany 32,192 3%
UK 30,072 1%
South Korea 26,350 8%
France 24,560 4%
India 21,107 33%
Canada 20,392 11%
Italy 18,106 13%


Figures for India looks quite interesting and encouraging for any aspiring internet entreprenuer. With present PC penetration and usage pattern these figure will improveamny a times as cost of PC has come to a all time low of 10k. With all indian telecome operator promising for a better broadband future we will witness a revolution in India cyberspace.






* Excludes traffic from public computers such as Internet cafes and access from mobile phones or PDAs
The next five countries catching up fast are, in order, Brazil, Spain, Russia, the Netherlands and Mexico, with the non-European countries growing the fastest.

Yahoo's "Peanut Butter"

This critical, internal Yahoo memo was being forwarded all over the place allegedly Brad Garlinghouse, a Yahoo senior V.P.

Here it is

Three and half years ago, I enthusiastically joined Yahoo! The magnitude of the opportunity was only matched by the magnitude of the assets. And an amazing team has been responsible for rebuilding Yahoo!It has been a profound experience. I am fortunate to have been a part of dramatic change for the Company. And our successes speak for themselves. More users than ever, more engaging than ever and more profitable than ever!I proudly bleed purple and, yellow everyday! And like so many people here, I love this company

But all is not well. Last Thursday's NY Times article was a blessing in the disguise of a painful public flogging. While it lacked accurate details, its conclusions rang true, and thus was a much needed wake up call. But also a call to action. A clear statement with which I, and far too many Yahoo's, agreed. And thankfully a reminder. A reminder that the measure of any person is not in how many times he or she falls down - but rather the spirit and resolve used to get back up. The same is now true of our Company.

It's time for us to get back up.

I believe we must embrace our problems and challenges and that we must take decisive action. We have the opportunity - in fact the invitation - to send a strong, clear and powerful message to our shareholders and Wall Street, to our advertisers and our partners, to our employees (both current and future), and to our users. They are all begging for a signal that we recognize and understand our problems, and that we are charting a course for fundamental change, Our current course and speed simply will not get us there. Short-term band-aids will not get us there.It's time for us to get back up and seize this invitation.I imagine there's much discussion amongst the Company's senior most leadership around the challenges we face. At the risk of being redundant, I wanted to share my take on our current situation and offer a recommended path forward, an attempt to be part of the solution rather than part of the problem.

Recognizing Our Problems

We lack a focused, cohesive vision for our company. We want to do everything and be everything -- to everyone. We've known this for years, talk about it incessantly, but do nothing to fundamentally address it. We are scared to be left out. We are reactive instead of charting an unwavering course. We are separated into silos that far too frequently don't talk to each other. And when we do talk, it isn't to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics.

Our inclination and proclivity to repeatedly hire leaders from outside the company results in disparate visions of what winning looks like -- rather than a leadership team rallying around a single cohesive strategy.

I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular.

I hate peanut butter. We all should.

We lack clarity of ownership and accountability. The most painful manifestation of this is the massive redundancy that exists throughout the organization. We now operate in an organizational structure -- admittedly created with the best of intentions -- that has become overly bureaucratic. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens the company with unnecessary costs.

Equally problematic, at what point in the organization does someone really OWN the success of their product or service or feature? Product, marketing, engineering, corporate strategy, financial operations... there are so many people in charge (or believe that they are in charge) that it's not clear if anyone is in charge. This forces decisions to be pushed up - rather than down. It forces decisions by committee or consensus and discourages the innovators from breaking the mold... thinking outside the box.

There's a reason why a centerfielder and a left fielder have clear areas of ownership. Pursuing die same ball repeatedly results in either collisions or dropped balls. Knowing that someone else is pursuing the ball and hoping to avoid that collision - we have become timid in our pursuit. Again, the ball drops.

We lack decisiveness. Combine a lack of focus with unclear ownership, and the result is that decisions are either not made or are made when it is already too late. Without a clear and focused vision, and without complete clarity of ownership, we lack a macro perspective to guide our decisions and visibility into who should make those decisions. We are repeatedly stymied by challenging and hairy decisions. We are held hostage by our analysis paralysis.

We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company.
• YME vs. Musicmatch
• Flickr vs. Photos
• YMG video vs. Search video
• Deli.cio.us vs. myweb
• Messenger and plug-ins vs. Sidebar and widgets
• Social media vs. 360 and Groups
• Front page vs. YMG
• Global strategy from BU'vs. Global strategy from Int'l

We have lost our passion to win. Far too many employees are "phoning" it in, lacking the passion and commitment to be a part of the solution. We sit idly by while -- at all levels -- employees are enabled to "hang around". Where is the accountability? Moreover, our compensation systems don't align to our overall success. Weak performers that have been around for years are rewarded. And many of our top performers aren't adequately recognized for their efforts.

As a result, the employees that we really need to stay (leaders, risk-takers, innovators, passionate) become discouraged and leave. Unfortunately many who opt to stay are not the ones who will lead us through the dramatic change that is needed.
Solving our Problems

We have awesome assets. Nearly every media and communications company is painfully jealous of our position. We have the largest audience, they are highly engaged and our brand is synonymous with the Internet.

If we get back up, embrace dramatic change, we will win.

I don't pretend there is only one path forward available to us. However, at a minimum, I want to be pad of the solution and thus have outlined a plan here that I believe can work. It is my strong belief that we need to act very quickly or risk going further down a slippery slope, The plan here is not perfect; it is, however, FAR better than no action at all.There are three pillars to my plan:1. Focus the vision.2. Restore accountability and clarity of ownership.3. Execute a radical reorganization.

1. Focus the vision

a) We need to boldly and definitively declare what we are and what we are not.

b) We need to exit (sell?) non core businesses and eliminate duplicative projects and businesses.


My belief is that the smoothly spread peanut butter needs to turn into a deliberately sculpted strategy -- that is narrowly focused.

We can't simply ask each BU to figure out what they should stop doing. The result will continue to be a non-cohesive strategy. The direction needs to come decisively from the top. We need to place our bets and not second guess. If we believe Media will maximize our ROI -- then let's not be bashful about reducing our investment in other areas. We need to make the tough decisions, articulate them and stick with them -- acknowledging that some people (users / partners / employees) will not like it. Change is hard.


2. Restore accountability and clarity of ownership

a) Existing business owners must be held accountable for where we find ourselves today -- heads must roll,

b) We must thoughtfully create senior roles that have holistic accountability for a particular line of business (a variant of a GM structure that will work with Yahoo!'s new focus)

c) We must redesign our performance and incentive systems.

I believe there are too many BU leaders who have gotten away with unacceptable results and worse -- unacceptable leadership. Too often they (we!) are the worst offenders of the problems outlined here. We must signal to both the employees and to our shareholders that we will hold these leaders (ourselves) accountable and implement change.


By building around a strong and unequivocal GM structure, we will not only empower those leaders, we will eliminate significant overhead throughout our multi-headed matrix. It must be very clear to everyone in the organization who is empowered to make a decision and ownership must be transparent. With that empowerment comes increased accountability -- leaders make decisions, the rest of the company supports those decisions, and the leaders ultimately live/die by the results of those decisions.

My view is that far too often our compensation and rewards are just spreading more peanut butter. We need to be much more aggressive about performance based compensation. This will only help accelerate our ability to weed out our lowest performers and better reward our hungry, motivated and productive employees.


3. Execute a radical reorganization

a) The current business unit structure must go away.

b) We must dramatically decentralize and eliminate as much of the matrix as possible.

c) We must reduce our headcount by 15-20%.

I emphatically believe we simply must eliminate the redundancies we have created and the first step in doing this is by restructuring our organization. We can be more efficient with fewer people and we can get more done, more quickly. We need to return more decision making to a new set of business units and their leadership. But we can't achieve this with baby step changes, We need to fundamentally rethink how we organize to win.

Independent of specific proposals of what this reorganization should look like, two key principles must be represented:

Blow up the matrix. Empower a new generation and model of General Managers to be true general managers. Product, marketing, user experience & design, engineering, business development & operations all report into a small number of focused General Managers. Leave no doubt as to where accountability lies.

Kill the redundancies. Align a set of new BU's so that they are not competing against each other. Search focuses on search. Social media aligns with community and communications. No competing owners for Video, Photos, etc. And Front Page becomes Switzerland. This will be a delicate exercise -- decentralization can create inefficiencies, but I believe we can find the right balance.

I love Yahoo! I'm proud to admit that I bleed purple and yellow. I'm proud to admit that I shaved a Y in the back of my head.

My motivation for this memo is the adamant belief that, as before, we have a tremendous opportunity ahead. I don't pretend that I have the only available answers, but we need to get the discussion going; change is needed and it is needed soon.

We can be a stronger and faster company - a company with a clearer vision and clearer ownership and clearer accountability.We may have fallen down, but the race is a marathon and not a sprint. I don't pretend that this will be easy. It will take courage, conviction, insight and tremendous commitment. I very much look forward to the challenge.
So let's get back up.
Catch the balls.
And stop eating peanut butter.

Starting a company in India

Doing Business As An Indian Company

As an alternative to doing business in India, you may want to conduct business as an Indian company through a joint venture or a wholly owned subsidiary. The difference between the two is that in a joint venture, a foreign company partners with an Indian entity. In an owned subsidiary on the other hand, the foreign company fully owns equity in another Indian company. For most industry sectors, especially in the IT field, the foreign company is not required to obtain prior approval from the Secretariat of Industrial Approvals in India and the Foreign Investment Promotion Board. Moreover, to encourage units in the IT sector, numerous government schemes exist, such as: Domestic Tariff Areas, Special Economic Zones, Free Trade Zones, Export Processing Zones, 100 percent EOUs, and Software Technology Parks (STPs). In particular, STPs enjoy the following special benefits:
(a) automatic clearance and approval to operate as a subsidiary,
(b) income tax holidays,
(c) customs duty exemptions on imports,
(d) excise duty exemptions and sales tax reimbursement on indigenous procurement,
(e) high-speed data communication links for software exports, (f) no separate export/import licenses,
(g) Green Card for priority treatment in government clearances and services.

The Specifics Of Incorporating

In India in order to incorporate a company in India, the first step is to file an application with the Registrar of Companies. Six proposed names of the subsidiary company must be provided in an order of preference. The Registrar of Companies wants the company’s name to contain at least one word indicative of the nature of the company’s business. For instance, an IT company should include words such as “software” or “technology” and the names should end either in “Private Limited” or “Public Limited.” If the first few words of the proposed name of the Indian company are those of the parent foreign company, a “No Objection” letter on the letterhead of the parent foreign company allowing the use of the name by the Indian subsidiary expedites the name registration process. Pursuant to the Indian Companies Act, 1956, a minimum of two shareholders is required to incorporate an Indian company. Further, during the incorporation process, the names, addresses, dates of birth, father’s name, nationality, and notarized copies of passports of the proposed directors of the Indian subsidiary must also be provided.Next, the Indian law requires a Memorandum and Articles of Association to be undertaken by the Indian subsidiary. A power of attorney may be required from the parent company by which an agent is appointed. The power of attorney must be notarized and authenticated by the Indian Embassy in the foreign company’s original country.

During the Indian subsidiary’s first board of directors’ meeting, the company must have the following items on its agenda:
(a) adoption of appointment of First Directors named as such in the Articles of Association;
(b) adoption of the registered Memorandum and Articles of Association;
(c) taking on record the Certificate of Incorporation of the company;
(d) taking on record the Registered Office of the company;
(e) approval of the financial year;
(f) appointment of First Auditors within one month of the date of incorporation of the company;
(g) approval of Common Seal of the company;
(h) approval of preliminary and pre-incorporation expenses; (i) allotment of shares and issuance of share certificates to the subscribers;
(j) authorizing a Director to represent the company in general and in taking the necessary steps to register it with various government authorities.

Subsequent to the first board meeting, the following steps must be taken:
(a) opening a company bank account;
(b) obtaining the statutory registers, attendance registers and minute books for the meetings;
(c) preparation of the common seal;
(d) printing share certificates;
(e) obtaining a Permanent Account Number (“PAN”);
(f) obtaining Tax Deduction Account Number (“TAN”);
(g) obtaining Importer-Exporter Code (“IEC”) Number;
(h) obtaining registration under various labor statutes including the Shops and Establishments Act and Provident Funds Act; (i) registration and enrollment with the Professions Tax authority; and (j) registration under Central and Sales Tax Act.The authorized share capital of the proposed Indian subsidiary depends on the words contained in the company’s name. For instance, the authorized share capital of Rs. 50 million ($1 million) is allotted for the use of word “Corporation” in the company name. The authorized share capital of Rs. 10 million ($216,000.00) is for the use of words “International,” “Globe,” “Universal,” “Continental,” or “Asia,” as the first word in the company name. Therefore, words such as those mentioned above are allowed as names only if the authorized share capital of the company totals certain specified amounts.The registration fees payable to the Registrar of Companies at the time of new company’s registration depend on the intended authorized share capital of the company. A private limited company must have a minimum authorized and paid share capital of Rs. 100,000.00. The registration fees generally range from approximately Rs. 4,800.00 ($100.00) to Rs. 98,000.00 ($2,250.00); however, registration fees can go up to Rs. 25 million depending upon the authorized capital.In conclusion, when setting up a business in India, careful attention should be given to the industry in which your company will operate. Additionally, a thorough understanding of the Indian regulations is essential to a successful establishment of your business.1[1] Both foreign companies in India as well as Indian companies are subject to Indian Companies Act, 1956. 2[2] STPs are located in Noida, Navi Mumbai, Pune, Gandhinagar, Hyderabad, Bangalore, Chennai, Bhubaneshwar, Jaipur, Mohali, and Thiruvanathapuram.

Starting Business in the New India

The sleeping elephant has woken up. Or is it another Asian tiger. Call it what you may, but the truth is that India is on the move. Since economic liberalization began in 1991, India has been clocking an 8 percent GDP growth year after year, foreign direct investments are hitting $10 billion annually, and the stock market has tripled in the last three years. The 300 million strong middle class, with new money in their pockets are continuing to fuel the economic engine.

http://www.siliconindia.com/magazine/fullstory.php/PNH721713089

Thinking small: Entrepreneurship in India

Despite all the fuss about offshoring to Bangalore, Amar Bhidé claims it can’t transform India’s economy. Here, he explains the reforms needed to spur business growth and put India on the fast track.http://www0.gsb.columbia.edu/ideasatwork/magazinefeature?&right3.uni=avb24&top.title=Thinking+small%3A+Entrepreneurship+in+India&main.id=594824&right2.id=594824&right3.view=whoswho.minifaculty&main.view=articles.detail&right3.ctrl=whoswhomgr.list&right2.ctrl=contentmgr.detail&top.pagetitle=&right2.view=articles.related&main.region=main&main.ctrl=contentmgr.detail&top.showsendarticle=yes

India and China are the only real Brics in the wall

Few concepts have gained more currency among business people and politicians in recent years than the idea of the Brics – the giant, emerging economies of Brazil, Russia, India and China, whose weight and influence is supposedly changing economic and political realities. Grouping the four, however, obscures a simple fact: while the rise of China and India represents a real shift in the power balance, Russia and Brazil are marginal economies propped up by high commodity prices. This difference has profound implications.
http://www.ft.com/cms/s/2147c02e-82e9-11db-a38a-0000779e2340,dwp_uuid=9c33700c-4c86-11da-89df-0000779e2340.html

Why India will overtake China

Since past few years India vs China discussion is going everywhere .Media, investers,politicians all are equally inetersted to present there case either in favour or in against India. Although India is a late starter in this race for Asian domination it has potentail to be tough sports against China if not a winner.

It will be too early to declare who will win this marathon but it is clear that China's hard infrastructure will help her to be on the top of the things for coming years.

India need speed and more importantly descipline to make sure it meat the expectations of its people. Constant comparision with China will put pressure on government to act, industry to include China in their strategy.

Next few year will provide India opportunity and challenge to conferm its postion in world affairs.

http://money.cnn.com/2006/08/30/magazines/fortune/IndiavsChina_pluggedin.fortune/index.htm