A lot of us get fascinated by Startups and always relate startup with challenging work, open-culture, rewards,innovation and fast growth. But there are startups which somehow are not good to work with due to different reasons. There are some basic ingredients which are very much required for any good startup. I am highligthing 10 type of startups which are not worth exploring ( The idea here is not to criticize startups but to make entrepreneurs/job-seekers aware of various sensitive issues):
1. Sharing " Not our Policy " - Some startups do have this kind of mentality. They think their idea and participation is the foremost and ultimate thing. This mentality is evident right from the beginning. Even during initial interaction these startups keep on asking thousands of question to you. But when you ask few questions,they become annoyed or decline to answer politely. Openness is one of the foremost rule of any business. Any startup is run by a set of people,and gauging their attitude and mind-set is very important. The people with wrong mindset won't share important details like revenues, sales target, available funding, growth-path etc. with you even at very advanced stage. Never-ever think of joining any such Startup. These people won't be fair with you during any stage of your engagement.
2. We all are leaders, but can't pay for your tea : Few startups do have good people as founder members, but they can't take any decision. They look for others before taking final call over any matter. They believe in several rounds of discussion even for very small issues. Most of them don't have guts to face any adverse situation and failure. They believe that group-thinking is always required and hence take huge amount of time to solve petty issues. Successful Startups are known for their responsiveness and agility. The top-management is very fast at taking decisions and always don't require consent of whole group. There are few cheer-leaders who take decisions quickly, keeping in mind internal and external factors. These startups are typically very slow moving and you may not enjoy working there.
3. We are the best, you can't compete : The founder members believe that they are best at doing everything. Anyone joining new will always be second to them. These people never trust others and always believe in doing work by themselves. Any startup which wants to grow faster should get good people and give them quality work. Any good founder should hire people who are smarter than him/her. The growth of any startup lies in the hand of every person associated with them directly or indirectly. Founder members should always groom future leaders within the company. Shared responsibilities and rewards would always help startup to scale-up faster. Any startup which gives less priority to meritocracy should be avoided without giving any second thought.
4. Vision Statement is only for website : You should never join a startup which thinks that Vision Statement is just a statement. If founder members are not visionaries then definitely that is not the right place to work at. The passion of founders should be visible at various forums. They should work towards achieving higher growth and increasing value for every stakeholders. If the management is quite shaky about a lot of things, then you should be cautious.
5. Employees are just resources : You should never join a startup which thinks that employees are just resources to get their work done. For anybody, decision to join a startup is quite difficult and hence startup should provide very healthy environment. Every employee should be given due attention and he should feel priviledged of being part of a great team. There should be sense of belonging and employees should be happy being part of small team.
6. We don't follow any policy : If any startup boasts that they don't follow any internal policies and they are very flexible, then you should become cautious. Lack of policies creates confusion and dissatisfaction at later stages. After crossing very initial stage ( i.e. once team grows more than 10 people) startup should figure out and document internal policies. These policies helps in handling a lot of issues quite easily. Also this helps employees/prospective employees to understand company in better manner. Startup should not create a chaos internally after it gains critical mass.
7. Just work for us, don't Think : A startup which restricts creative freedom should be avoided. Typically a lot of people join startups to learn lot of new things quickly. They also want to try out new things/ideas. Some of them want to own their startup at some point of time. If a startup is not providing enough learning opportunities then that is not the right place. Founders should promote innovation and internal ideas.
8. You should not worry for money : A lot of startups tell their employees that they should not worry for money because the work is pretty good. This justification won't work for long-time and shows lack of validated revenue model. Any good business should make profits and should be shared with employees appropriately. In case company is not in a position to provide cash then it should be suitably compensated by stocks, profit-sharing etc. Any company spreading the message that they will pay less and won't compensate by other means should be avoided. This basically shows greediness of founding members.
9. We are Unprofessionals : You should never join a startup which shows high level of unprofessionalism. They don't value time, their dressing sense is horrible, they don't care about their clients, they don't value commitments etc. These kind of people can't scale-up operations to the next level. In business, after crossing initial stage very high level of professionalism is required by each member.
10. Accumulate money as much you want : If the founding members say that startups mean money and success only, then you should be cautious. If people at top are just showing rosy picture then definitely there is some serious problem. A lot of ventures become unsuccessful, but a falied startup also provides huge learning opportunities.
Thursday, July 31, 2008
Monday, July 28, 2008
Venture Capital : Idenizen receives USD 2.25 Mn.
Bangalore based Education-related technology solutions provider Idenizen Smartware has received venture capital funding of $2.25 million (Rs 9 crore) from Vinod Dham-led NEA-IndoUS Ventures, to fund its pan-India growth plans.
The firm has nearly 100 SmartCampus installations under its belt catering directly to thousands of students, teaching and non-teaching staff, and managements of institutes.
Functional areas automated by SmartCampus include department administration, staff profile, staff and student attendance, staff payroll, examinations, library management, accounting, student information systems, and hostel management, among others.(source)
School Management is definitely one area which requires immediate attention with smart technology tools.
Friday, July 25, 2008
Venture Capital : Intel Capital to invest in Yatra, BuzzInTown & Emnet Samsara Media
With an overall strategy to enable innovation, Intel Capital seeks out and invests in promising technology companies worldwide. They will invest $17 million in three Indian companies. The three companies identified for investment are :-
Yatra.com : Online travel portal
BuzzInTown.com : Event-oriented social network
Emnet Samsara Media : An advertising company
The funding for the said investment would come from the $250 million Intel Capital India Technology Fund. The fund has already invested $125 million so far in the country, Mr Sodhani said, adding that apart from investing in technology companies, the fund would also focus on alternate sources of energy.
Further, Intel Capital is also focusing on investment in the WiMax network of the country. They are waiting for the government to speed up the process of spectrum allocation.
--
Intel Capital has a corpus of over $3 billion and its portfolio includes over 400 companies across the world.
Since 1991, Intel Capital has invested more than US$7.5 billion in approximately 1,000 companies in 45 countries. In that timeframe, 168 portfolio companies have gone public on various exchanges around the world and 212 were acquired or participated in a merger. In 2007, Intel Capital invested about US$639 million in 166 deals with approximately 37 percent of funds invested outside the United States.
Intel Capital has made a number of well known investments around the globe. These include Actions Semiconductor, Bellrock Media, Broadcom, CNET, CitrixSystems, Clearwire, Elpida Memory, FPT, India Infoline.com, Inktomi, Insyde Software, Integrant Technologies, Marvell, MySQL, NIIT, PCCW, Red Hat, Rediff.com, Research in Motion, Sasken, SiRF, Smart Technologies, Sohu.com, Techfaith, VA Linux, and WebMD.
Thursday, July 24, 2008
Venture Capital : iYogi secured $9.5 Million
Based in Gurgaon,India, iYogi is the first direct to consumer computer support service for millions faced with increasing computing complexity.
iYogi has secured a second-round funding of $9.5 million from a consortium of VCs led by SAP Ventures, a division of the German software major SAP. This is SAP Ventures first investment in India and the fund is close to investing in couple of other IT and ITeS companies in India.
They have a customer base of over 50,000, primarily in the US. Company will use the funding to expand operations in new geographies, to increase execution capability, delivery of new services and to enhance its marketing effort. The company plans to ramp up to 2,000 employees( from current 450)in next couple of years.
It has a unique offshoring model that focuses on providing technical support to individual retail customers (personal offshoring) rather than enterprise customers, mostly done by BPOs.
iYogi has secured a second-round funding of $9.5 million from a consortium of VCs led by SAP Ventures, a division of the German software major SAP. This is SAP Ventures first investment in India and the fund is close to investing in couple of other IT and ITeS companies in India.
They have a customer base of over 50,000, primarily in the US. Company will use the funding to expand operations in new geographies, to increase execution capability, delivery of new services and to enhance its marketing effort. The company plans to ramp up to 2,000 employees( from current 450)in next couple of years.
It has a unique offshoring model that focuses on providing technical support to individual retail customers (personal offshoring) rather than enterprise customers, mostly done by BPOs.
Wednesday, July 23, 2008
Monday, July 21, 2008
Proto.in4 Article 3 : What Venture Capitalists look in You & Your Company?
Indian Stratups require funds to ramp-up their operations and venture into new areas. After acquiring few initial clients and validating revenue model, Indian entrepreneur looks for people who can invest in his/her company.
A Venture Capitalist is always seen as an entity with tons of money, who decides to invest in any company based on expected returns. Quite a few people think that for them money is the foremost thing and they don't care about anything else. The real situation is quite different and there are several other factors which help them to take final decision:-
Chemistry between Startup & VC : Any Venture Capitalist looks for right chemistry between the startup/company and their organization. They try to analyze whether the dynamics between their company and founders is good, average or bad. Most of the times VC decide not to put money in companies with great idea but bad dynamics. They spend enough time with founders to understand their viewpoint and attitude. They want the business to grow and hence don't like founders who want to hold the top position forever. Venture Capitalists typically like people who think of growing the company leaving aside their personal benefits only. The flexibility and agility of founding team to sustain in competitive environment is thoroughly tested by any Venture Capitalist before making any investments.
Business Term-Sheet : Venture Capitalist put money in companies keeping in mind an investment horizon of 3-5 years. The terms and conditions of any engagement is captured in a term-sheet which includes items like Price/Valuation, Type of Security, Liquidation Preference, Liquidation Preference, Dividend, Conversion Rights, Voting Rights, Registration Rights, Board of Directors etc. Negotiating the terms of the agreement is part of establishing a close working relationship with venture capitalist. Most of items of term-sheet are non-negotiable, but there are smart ways to negotiate the right deal. Venture capitalists have a lot of leverage negotiating terms that help them increase ROI simply because they have a firm grasp of the market. Things like liquidity preference (how much money they get out before the founders in a sale), veto rights and other preferred stock privileges can affect the long term economics of a deal substantially.Entrepreneurs generally rely on their attorney and contacts to help them understand the current trends in terms.
Due-Diligence : Venture capitalists do background research to get information about the founders and company. They don't take all your statements on face value. Similarly, the startup should also carry-out due diligence about the venture capitalist. They should see their investment portfolio and talk to few companies to get first hand information. They can also gather information related to experience, term-sheet etc. from different sources. The idea here is go get into a relationship which is mutually compatible and may not see mid-way jitters. After both parties have done due diligence the marriage happens.
VC is not Money-Machine : VC should not be seen as a person who is just throwing away his money to you. He brings a lot of expertise and contacts to help you grow. But at the same time he shouldn't be seen as a person who can solve all of your problems. He will always lend you supporting hand, while you need to be on the fore-front of business. VC is not interested in getting into each and every affair, but to give some strategic inputs and directions at appropriate time.
A VC should be seen as a partner who wants mutually beneficial relationship while giving you enough freedom and liberty.
A Venture Capitalist is always seen as an entity with tons of money, who decides to invest in any company based on expected returns. Quite a few people think that for them money is the foremost thing and they don't care about anything else. The real situation is quite different and there are several other factors which help them to take final decision:-
Chemistry between Startup & VC : Any Venture Capitalist looks for right chemistry between the startup/company and their organization. They try to analyze whether the dynamics between their company and founders is good, average or bad. Most of the times VC decide not to put money in companies with great idea but bad dynamics. They spend enough time with founders to understand their viewpoint and attitude. They want the business to grow and hence don't like founders who want to hold the top position forever. Venture Capitalists typically like people who think of growing the company leaving aside their personal benefits only. The flexibility and agility of founding team to sustain in competitive environment is thoroughly tested by any Venture Capitalist before making any investments.
Business Term-Sheet : Venture Capitalist put money in companies keeping in mind an investment horizon of 3-5 years. The terms and conditions of any engagement is captured in a term-sheet which includes items like Price/Valuation, Type of Security, Liquidation Preference, Liquidation Preference, Dividend, Conversion Rights, Voting Rights, Registration Rights, Board of Directors etc. Negotiating the terms of the agreement is part of establishing a close working relationship with venture capitalist. Most of items of term-sheet are non-negotiable, but there are smart ways to negotiate the right deal. Venture capitalists have a lot of leverage negotiating terms that help them increase ROI simply because they have a firm grasp of the market. Things like liquidity preference (how much money they get out before the founders in a sale), veto rights and other preferred stock privileges can affect the long term economics of a deal substantially.Entrepreneurs generally rely on their attorney and contacts to help them understand the current trends in terms.
Due-Diligence : Venture capitalists do background research to get information about the founders and company. They don't take all your statements on face value. Similarly, the startup should also carry-out due diligence about the venture capitalist. They should see their investment portfolio and talk to few companies to get first hand information. They can also gather information related to experience, term-sheet etc. from different sources. The idea here is go get into a relationship which is mutually compatible and may not see mid-way jitters. After both parties have done due diligence the marriage happens.
VC is not Money-Machine : VC should not be seen as a person who is just throwing away his money to you. He brings a lot of expertise and contacts to help you grow. But at the same time he shouldn't be seen as a person who can solve all of your problems. He will always lend you supporting hand, while you need to be on the fore-front of business. VC is not interested in getting into each and every affair, but to give some strategic inputs and directions at appropriate time.
A VC should be seen as a partner who wants mutually beneficial relationship while giving you enough freedom and liberty.
Proto.in Article2 : When, Why & How to start a business?
Proto.in4 covered various aspects of entrepreneurship. The session by Mahesh Murthy of Seedfund raised several critical points, which need to be seen before starting your own venture.
Novelty of Idea : The idea should have some novelty component. You should not read newspaper one day and think that the idea given in newspaper is worth exploring. If the journalist is publishing the idea in newspaper then either you are too late or idea is worthless to be explored. Try to evaluate the novelty and be a trend-setter. Try to venture into new areas and don't create a buzz about your idea in the initial stages. Evolve the idea and grow it to some level and let others talk about it after sometime. This way you can reach masses without spending a penny.
Right Time to Start : You should not get into entrepreneurship, because your current job is bad. The right time to get into entrepreneurship is when you have great idea which can change the world. You should have firm belief in your idea and should be able to sell the idea to others. If there are not enough takers for idea then definitely there is some serious problem i.e. either you are very bad at putting things and/or the idea is not that great. Don't try to be 20th company of any field. If you want to grow in any particular area, then try to be among first three companies.
How to Start : A lot of us feel that there should be enough market research before starting any business. We look at various reports published by Gartner, McKinsey etc. to see market trends and forecasts. The market research results go haywire many a times. The gut feeling and intuition clubbed with business acumen is very much required by any entrepreneur. Also for radical innovation from where are you going to get Market Research reports. A lot of traders ( quite successful entrepreneurs) from Gujarat & Rajasthan never read any research report and/or do any financial analysis. They just go by their gut feeling and passion to enter into new/existing business areas.
The keywords which holds highest value for entrepreneurship are trend-setter, out-of-the-box thinking, intuition, dedication and passion.
Novelty of Idea : The idea should have some novelty component. You should not read newspaper one day and think that the idea given in newspaper is worth exploring. If the journalist is publishing the idea in newspaper then either you are too late or idea is worthless to be explored. Try to evaluate the novelty and be a trend-setter. Try to venture into new areas and don't create a buzz about your idea in the initial stages. Evolve the idea and grow it to some level and let others talk about it after sometime. This way you can reach masses without spending a penny.
Right Time to Start : You should not get into entrepreneurship, because your current job is bad. The right time to get into entrepreneurship is when you have great idea which can change the world. You should have firm belief in your idea and should be able to sell the idea to others. If there are not enough takers for idea then definitely there is some serious problem i.e. either you are very bad at putting things and/or the idea is not that great. Don't try to be 20th company of any field. If you want to grow in any particular area, then try to be among first three companies.
How to Start : A lot of us feel that there should be enough market research before starting any business. We look at various reports published by Gartner, McKinsey etc. to see market trends and forecasts. The market research results go haywire many a times. The gut feeling and intuition clubbed with business acumen is very much required by any entrepreneur. Also for radical innovation from where are you going to get Market Research reports. A lot of traders ( quite successful entrepreneurs) from Gujarat & Rajasthan never read any research report and/or do any financial analysis. They just go by their gut feeling and passion to enter into new/existing business areas.
The keywords which holds highest value for entrepreneurship are trend-setter, out-of-the-box thinking, intuition, dedication and passion.
Sunday, July 20, 2008
Proto.in Article1 : The Art of Building Internet Business
A lot of businesses start with a small scale-operation and then gradually gain momentum and volume. For first generation entrepreneurs taking a call to pursue a business is even more difficult. The situation was no different for Murugavel Janakiraman - Founder of Bharatmatrimony.com. He started his venture from his bedroom way back in 1997. At that point of time, internet was just picking up and few people were using internet as a medium for discussion and information sharing. During initial stage he developed a forum for discussion and information dissemination.
After sometime he noticed that a lot of people were using such platforms for matrimony purposes. After some thought, he decided to focus on this area and founded Bharatmatrimony.com. During initial stage a lot of people were skeptical to put their photographs and information over the net. Also a lot of people were just hitting the website and not taking any action. In the initial stage they charged Rs. 300 once the marriage is finalized. After some time Bharatmatrimony was made paid service which charged for establishing contact. Slowly the business started picking up and they got several million registered users in no time. In 2006 they raised money to scale up their operations. Currently they have more than 1000 employees and 700+ Bharatmatrimony centers.
The key learning's from the session: -
1. For 1st generation entrepreneurs, everything starts small and then grows gradually based on dedication and business decisions.
2. One should be flexible enough to do mid-way correction. If one strategy is not going well, be ready to try out new things.
3. Be passionate about what you are doing.
4. Be transparent to all stakeholders i.e. employees, partners, customers
5. Don't change your attitude with time as you grow bigger and achieve financial success.
6. Share your wealth with people who shared your dreams and joined you during initial stage of your venture
7. Be ready to take and enjoy risk. You past experience and family background doesn't matter a lot, if you have passion to realize your dreams.
After sometime he noticed that a lot of people were using such platforms for matrimony purposes. After some thought, he decided to focus on this area and founded Bharatmatrimony.com. During initial stage a lot of people were skeptical to put their photographs and information over the net. Also a lot of people were just hitting the website and not taking any action. In the initial stage they charged Rs. 300 once the marriage is finalized. After some time Bharatmatrimony was made paid service which charged for establishing contact. Slowly the business started picking up and they got several million registered users in no time. In 2006 they raised money to scale up their operations. Currently they have more than 1000 employees and 700+ Bharatmatrimony centers.
The key learning's from the session: -
1. For 1st generation entrepreneurs, everything starts small and then grows gradually based on dedication and business decisions.
2. One should be flexible enough to do mid-way correction. If one strategy is not going well, be ready to try out new things.
3. Be passionate about what you are doing.
4. Be transparent to all stakeholders i.e. employees, partners, customers
5. Don't change your attitude with time as you grow bigger and achieve financial success.
6. Share your wealth with people who shared your dreams and joined you during initial stage of your venture
7. Be ready to take and enjoy risk. You past experience and family background doesn't matter a lot, if you have passion to realize your dreams.
Saturday, July 19, 2008
Proto.in summary series
So,the high-energy and spirited semi-annual technology showcase & networking event ended today. The event was quite enriching in terms of gaining & sharing knowledge, meeting-up new people with lot of ideas & dreams and getting a feel of startup issues and probable solution approaches. The idea of the event was learning through engagement. On personal front I also learnt a lot from this event. I would try to capture this event in a series of blogs. I feel I should be done in 7 postings ( But who knows.... I may come up with even double posts).
I am listing here few items which would be covered:
1. The Art of Building Internet Business ( Taking BharatMatrimony.com as an example)
2. When, Why & How to start a business ( Building upon Mahesh Murthy's session)
3. What a Venture Capitalist look for in you & your business?
4. How a Card, Water, T-shirt matters?
5. Selling the dream & executing? ( Building upon Tekriti's talk)
6. Why a start-up should network? Realizing power of networks?
7. Blogging as a tool for creating brand and selling your services.
A lot of ideas and discussion in these postings would help you to start thinking and executing.
I am listing here few items which would be covered:
1. The Art of Building Internet Business ( Taking BharatMatrimony.com as an example)
2. When, Why & How to start a business ( Building upon Mahesh Murthy's session)
3. What a Venture Capitalist look for in you & your business?
4. How a Card, Water, T-shirt matters?
5. Selling the dream & executing? ( Building upon Tekriti's talk)
6. Why a start-up should network? Realizing power of networks?
7. Blogging as a tool for creating brand and selling your services.
A lot of ideas and discussion in these postings would help you to start thinking and executing.
Thursday, July 17, 2008
Open Coffee Club Posters
OpenCoffee Club : This is an attempt to establish recognized, open and regular meeting places where emerging & aspiring entrepreneurs can meet with investors, marketers, developers (and anyone else who fancies coming along) in a totally informal setting.The key is a regular place and a regular time - it's not important who comes along, some days it might be no one - just that people know if they want to meet, this is the time and this is the place.
We want to create some density for people -- a few places where people know they can meet or bump into others.Something that can be replicated anywhere else at little or no cost where entrepreneurs can meet and know people might be around for them to talk with.
Wednesday, July 16, 2008
Venture Capital firms invest $340-M in India during H1 ‘08
According to a study by Venture Intelligence in partnership with the U.S.-India Venture Capital Association.
Amount Invested in H1-2008 by (VC) firms : $340 million ( $158 Mn. during April-June)
Number of Deals : 51 (( 26 during April-June)
Apart from IT other key areas are alternative energy, media, retail and other consumer demand-led sectors.
Top VC Investments in H1 ‘08
1. 20 Mn. in Obopay working in the area of Mobile VAS (Payments by Essar Communications Holdings, Promethean India, Richmond Management, Others
2. 20 Mn. in Sai Advantium working in the area of CRO by MPM Capital
3. 18.5 Mn. in Cleartrip working in the area of Online Services (Travel)by DFJ, others
4. 15 Mn. in Deeya Energy working in the area of Energy Storageby DFJ, BlueRun, NEA, others
5. 15 Mn. in Soham Renewable Energy working in the area of Renewable Energyby D E Shaw
6. 11 Mn. in Jivox working in the area of Online Services (Video Advertising) by Helion Ventures, Opus Capital, others
7. 10 Mn. in Brand Marketing working in the area of Retail (Fashion Brands)by Matrix Partners India
8. 10 Mn. in Emergent Ventures working in the area of Carbon Credit Advisory by IDFC PE
9. 10 Mn. in Gridstone Research working in the area of Enterprise Software
(Stock Market) by Helion Ventures, Maverick Capital, Charles River Ventures
10. 9 Mn in Paymate working in the area of Mobile VAS (Payments) by Mayfield, KPCB, Sherpalo Ventures
Amount Invested in H1-2008 by (VC) firms : $340 million ( $158 Mn. during April-June)
Number of Deals : 51 (( 26 during April-June)
Apart from IT other key areas are alternative energy, media, retail and other consumer demand-led sectors.
Top VC Investments in H1 ‘08
1. 20 Mn. in Obopay working in the area of Mobile VAS (Payments by Essar Communications Holdings, Promethean India, Richmond Management, Others
2. 20 Mn. in Sai Advantium working in the area of CRO by MPM Capital
3. 18.5 Mn. in Cleartrip working in the area of Online Services (Travel)by DFJ, others
4. 15 Mn. in Deeya Energy working in the area of Energy Storageby DFJ, BlueRun, NEA, others
5. 15 Mn. in Soham Renewable Energy working in the area of Renewable Energyby D E Shaw
6. 11 Mn. in Jivox working in the area of Online Services (Video Advertising) by Helion Ventures, Opus Capital, others
7. 10 Mn. in Brand Marketing working in the area of Retail (Fashion Brands)by Matrix Partners India
8. 10 Mn. in Emergent Ventures working in the area of Carbon Credit Advisory by IDFC PE
9. 10 Mn. in Gridstone Research working in the area of Enterprise Software
(Stock Market) by Helion Ventures, Maverick Capital, Charles River Ventures
10. 9 Mn in Paymate working in the area of Mobile VAS (Payments) by Mayfield, KPCB, Sherpalo Ventures
Monday, July 14, 2008
Open Coffee Club Noida - July Edition
Yesterday, I attended July edition of Open Coffee Club Noida. The topics of discussion included Machine Learning, Knowledge Management, Differentiation, Open-Source to Guitar Classes. I would capture key discussion points along with my insights:
1. Machine Learning : As defined by Wiki - Machine-Learning is a broad sub field of artificial intelligence, machine learning is concerned with the design and development of algorithms and techniques that allow computers to "learn". The major focus of machine learning research is to extract information from data automatically, by computational and statistical methods. Hence, machine learning is closely related not only to data mining and statistics, but also theoretical computer science.
It was debated that there are still a lot of systems where input and output are known, but we have no/limited knowledge about the process of transformation. It was also said that inferences based on heuristics need to be re-verified at regular intervals and may not translate into predictive modeling.
2. Knowledge Management & Idea Generation : It is imperative for any organization to manage the knowledge available within organization or with other stakeholders in best form. The use of knowledge helps in organization's growth in short & long-run. New ideas should be generated om regular basis to make improvements and expand service/product offerings. Organizations like 3M, Google & Bosch give high emphasis to idea generation and execution. The customer oriented organizations should involve their users to give creative feedback. The ideas which are worthwhile should be implemented by organization to improve offering and customer satisfaction. The whole idea of such initiatives is to involve inside/outside people and take actions accordingly.
3. Open-source : Few participants were apprehensive about participation of people in giving creative feedback. In their opinion, why should somebody invest his/her time to give ideas?. The premise of open-source is shared learning, removing re-work and improving existing processes. A lot of people are interested in making processes/systems better and hence would love to contribute at their own cost. Even simple examples like information sharing with TV/Radio channels and voting for good performers by common man justifies the whole point. Even small incentive programs can be used to get more people involved. A lot of people are interested in contributing at their own cost.
4. Differentiation Strategy : What would be best strategy while developing a product already existing in the market? Should we include too many new features?
A lot of people said that even if you are late-entrant, you should not think of making a product which may be perceived as a different offering. Product differentiation is possible up to a level, after which the other factors like Marketing, End-User Requirements, Environmental factors come into play. So you should look at multiple factors rather than just concentrating on making your product completely different from existing ones.
5. Niche Emerging Business : There are a lot of unexplored business areas in India, one of which being good professional trainers for musical instruments. At some places the people involved are too busy and costly while at some other places the quality of service is poor. There is pressing need of good companies offering such services at reasonable price and with good service quality. Once specific example is of a Guitar Training Company founded by group of IITians which is offering good training at reasonable price. Even in future they can think of extending their services to multiple locations using Franchisee model.
Overall, it was an enriching experience to hear and share good ideas. All like-minded people from different domains should definitely get-together here at no cost ( or at the cost of your own coffee).
1. Machine Learning : As defined by Wiki - Machine-Learning is a broad sub field of artificial intelligence, machine learning is concerned with the design and development of algorithms and techniques that allow computers to "learn". The major focus of machine learning research is to extract information from data automatically, by computational and statistical methods. Hence, machine learning is closely related not only to data mining and statistics, but also theoretical computer science.
It was debated that there are still a lot of systems where input and output are known, but we have no/limited knowledge about the process of transformation. It was also said that inferences based on heuristics need to be re-verified at regular intervals and may not translate into predictive modeling.
2. Knowledge Management & Idea Generation : It is imperative for any organization to manage the knowledge available within organization or with other stakeholders in best form. The use of knowledge helps in organization's growth in short & long-run. New ideas should be generated om regular basis to make improvements and expand service/product offerings. Organizations like 3M, Google & Bosch give high emphasis to idea generation and execution. The customer oriented organizations should involve their users to give creative feedback. The ideas which are worthwhile should be implemented by organization to improve offering and customer satisfaction. The whole idea of such initiatives is to involve inside/outside people and take actions accordingly.
3. Open-source : Few participants were apprehensive about participation of people in giving creative feedback. In their opinion, why should somebody invest his/her time to give ideas?. The premise of open-source is shared learning, removing re-work and improving existing processes. A lot of people are interested in making processes/systems better and hence would love to contribute at their own cost. Even simple examples like information sharing with TV/Radio channels and voting for good performers by common man justifies the whole point. Even small incentive programs can be used to get more people involved. A lot of people are interested in contributing at their own cost.
4. Differentiation Strategy : What would be best strategy while developing a product already existing in the market? Should we include too many new features?
A lot of people said that even if you are late-entrant, you should not think of making a product which may be perceived as a different offering. Product differentiation is possible up to a level, after which the other factors like Marketing, End-User Requirements, Environmental factors come into play. So you should look at multiple factors rather than just concentrating on making your product completely different from existing ones.
5. Niche Emerging Business : There are a lot of unexplored business areas in India, one of which being good professional trainers for musical instruments. At some places the people involved are too busy and costly while at some other places the quality of service is poor. There is pressing need of good companies offering such services at reasonable price and with good service quality. Once specific example is of a Guitar Training Company founded by group of IITians which is offering good training at reasonable price. Even in future they can think of extending their services to multiple locations using Franchisee model.
Overall, it was an enriching experience to hear and share good ideas. All like-minded people from different domains should definitely get-together here at no cost ( or at the cost of your own coffee).
Open Coffee Club Delhi - July Edition Vol. 2
In my last post I captured few points discussed by participants during OCC meet. Here are other key points discussed along with my comments :
Hiring & Retention Policy : Most of us think that employee retention is very important. You should have somebody working for you as long as possible. A lot of people tend to forget that the cost of employee becomes fixed-cost once he is associated for longer duration. Also his expectations during appraisals are quite high, if he is staying with the same organization for some time. The productivity of employee also decreases in most of the cases once he becomes complacent. In some cases, companies feel that they made a mistake by hiring wrong person. So, employees should not always be seen as assets and attrition should not have a negative connotation. One specific example of a BPO was given where they hire 100+ people every month. A lot of employees join here at a salary as low as Rs. 4000 and work for 3-4 months before moving to some other organization. But from company's perspective the cost of hiring & training is lower than keeping highly paid long-term employees. Even maintaining a work-force who works for you on part time basis is also a good option for organizations.
So folks, within your organization try to figure out cost of long-term vs. short-term employees before judging whether attrition is good or bad for you.
E-commerce & Mobile Advertising : All of us hear a lot about e-commerce and mobile advertising. The potential for both these technologies is quite huge, but currently it will take some time to pick-up. Few big challenges for e-commerce is establishing credibility and service guarantee. In India still there are only 2.5 Million e-commerce transactions happening. Once everything is in place and people will have good faith e-commerce will pick-up fast. The companies offering their services using e-commerce as a base should be ready for great end-user experience, good supplier network and security of financial information.
Mobile advertising is currently INR 40 Cr. industry and it growing fast. Smaller players are also using these means to touch-base with their customers. Getting a SMS from nearest Mall or restaurant is becoming popular. The only problem is information overload for end-users in long run. Intelligent background study is also required to send relevant messages to right people. The key lies in providing right advertisements to right people at right place and right time.
Need of low-cost solutions for SME's : There are huge number of emerging organizations in India and abroad. There is an urgent need to have customized application packages bundled for Small & Medium Enterprises. These kind of offerings would be priced reasonably,having key features only and easy to use. Think of a strip-down version of ERP software for SME's at reasonable price. The emerging organizations need good system in place to manage their business and technical functions.
Overall the discussion was quite enriching and people who missed out this time should definitely join next time.
Hiring & Retention Policy : Most of us think that employee retention is very important. You should have somebody working for you as long as possible. A lot of people tend to forget that the cost of employee becomes fixed-cost once he is associated for longer duration. Also his expectations during appraisals are quite high, if he is staying with the same organization for some time. The productivity of employee also decreases in most of the cases once he becomes complacent. In some cases, companies feel that they made a mistake by hiring wrong person. So, employees should not always be seen as assets and attrition should not have a negative connotation. One specific example of a BPO was given where they hire 100+ people every month. A lot of employees join here at a salary as low as Rs. 4000 and work for 3-4 months before moving to some other organization. But from company's perspective the cost of hiring & training is lower than keeping highly paid long-term employees. Even maintaining a work-force who works for you on part time basis is also a good option for organizations.
So folks, within your organization try to figure out cost of long-term vs. short-term employees before judging whether attrition is good or bad for you.
E-commerce & Mobile Advertising : All of us hear a lot about e-commerce and mobile advertising. The potential for both these technologies is quite huge, but currently it will take some time to pick-up. Few big challenges for e-commerce is establishing credibility and service guarantee. In India still there are only 2.5 Million e-commerce transactions happening. Once everything is in place and people will have good faith e-commerce will pick-up fast. The companies offering their services using e-commerce as a base should be ready for great end-user experience, good supplier network and security of financial information.
Mobile advertising is currently INR 40 Cr. industry and it growing fast. Smaller players are also using these means to touch-base with their customers. Getting a SMS from nearest Mall or restaurant is becoming popular. The only problem is information overload for end-users in long run. Intelligent background study is also required to send relevant messages to right people. The key lies in providing right advertisements to right people at right place and right time.
Need of low-cost solutions for SME's : There are huge number of emerging organizations in India and abroad. There is an urgent need to have customized application packages bundled for Small & Medium Enterprises. These kind of offerings would be priced reasonably,having key features only and easy to use. Think of a strip-down version of ERP software for SME's at reasonable price. The emerging organizations need good system in place to manage their business and technical functions.
Overall the discussion was quite enriching and people who missed out this time should definitely join next time.
Saturday, July 12, 2008
Open Coffee Club Delhi Meeting - July Edition Vol.1
Yesterday, I attended Open Coffee Club Delhi July edition meeting. The meeting saw bunch of aspiring & emerging entrepreneurs sharing their ideas on different issues. The energy level of guys at Cafe Coffee Day was quite encouraging,despite of loud music,which was reduced to some extent after request. I would try to summarize some of the key-points:
1. Office Space for Startups : With rising cost of infrastructure in metros,getting a space for startups is a big problem. Another problem is due to small team-size, since most of the available places start from 600-700 Sq. ft. which can easily accommodate 6-8 people. The cost of such a place may range from anywhere from Rs. 30,000-80,000 depending on location. Let me give you some specifics, Rate in Noida (sec -16) is Rs.50-75 per sq.ft. while in Gurgaon is Rs. 80-120. Even if we take lowest figures i.e. Rs. 30,000 for a team of 2 the cost per seat would be Rs. 15000. The numbers are not at all attractive for any early-stage startups. Now let me tell you some options in NCR (National Capital Region).
a. NSIC, Okhla, New Delhi : They have an incubation center, where you can get a cubicle for 3 @Rs.10,000 with internet connection. They do have shared conference room for meetings. Here your per seat burn-rate would be close to Rs. 3,500. More For specific details you can contact Avinash, Founder of RouteGuru.
b. JSS Noida, Incubation center : They have an incubation center, where you can get a place for 2@Rs. 5,000-6,000 with all supporting infrastructure. Contact : Mr. Raunak Mustaffa
Email:itbi@jssstepnoida.org Tel:91-120-240115 Extn:268
c. The other option is Amity Incubator in Sec-125,Noida. Contact : Apoorv R. Sharma - Tel No. 0120-4659000, 4392243,E-mail : info@aii.amity.edu .
d. CDAC Incubator : The facility is quite good at reasonable cost. They charge something between 20,000-25,000 Rs. for 8-10 people desk-space. All supporting infrastructure is also present there.
The other option is to form a group of 6-8 people from 2-3 emerging startups and share the infrastructure cost. This way your cost per seat may go down to upto Rs. 3500-4000 which is decent. Even people running their businesses in NCR with bigger facilities can think of sharing their infrastrucre on rent. Any takers?
2. Venturing into New Areas: One of the participant was working for UNICEF for last few years. Now after deeper introspection, he realized that he should come back to corporate world. Which areas he should focus on?
a. Leveraging past domain expertise always helps you to grow faster. It was suggested that he should try to explore opportunities where he can leverage his knowledge of not-for-profit sector. There are special initiatives like Driving Simulation School, Training Schools for Security Guards, IITians for ITI, Reach 4 India which can be explored. These initiatives provide right exposure to business & social aspects.
b. He can come-up with some good initiatives which can be pitched within UNICEF or any other organization working in similar areas. The initiative can take him away from purely social-work to business related work.After all the experience which he has gained should be utilized properly.
There are a lot of other points like cost-cutting strategy by hiring right people, e-commerce proliferation,customized application packages for SME's which I would cover in the next blog. After all, its good learning experience when bunch of creative minds sit together.
1. Office Space for Startups : With rising cost of infrastructure in metros,getting a space for startups is a big problem. Another problem is due to small team-size, since most of the available places start from 600-700 Sq. ft. which can easily accommodate 6-8 people. The cost of such a place may range from anywhere from Rs. 30,000-80,000 depending on location. Let me give you some specifics, Rate in Noida (sec -16) is Rs.50-75 per sq.ft. while in Gurgaon is Rs. 80-120. Even if we take lowest figures i.e. Rs. 30,000 for a team of 2 the cost per seat would be Rs. 15000. The numbers are not at all attractive for any early-stage startups. Now let me tell you some options in NCR (National Capital Region).
a. NSIC, Okhla, New Delhi : They have an incubation center, where you can get a cubicle for 3 @Rs.10,000 with internet connection. They do have shared conference room for meetings. Here your per seat burn-rate would be close to Rs. 3,500. More For specific details you can contact Avinash, Founder of RouteGuru.
b. JSS Noida, Incubation center : They have an incubation center, where you can get a place for 2@Rs. 5,000-6,000 with all supporting infrastructure. Contact : Mr. Raunak Mustaffa
Email:itbi@jssstepnoida.org Tel:91-120-240115 Extn:268
c. The other option is Amity Incubator in Sec-125,Noida. Contact : Apoorv R. Sharma - Tel No. 0120-4659000, 4392243,E-mail : info@aii.amity.edu .
d. CDAC Incubator : The facility is quite good at reasonable cost. They charge something between 20,000-25,000 Rs. for 8-10 people desk-space. All supporting infrastructure is also present there.
The other option is to form a group of 6-8 people from 2-3 emerging startups and share the infrastructure cost. This way your cost per seat may go down to upto Rs. 3500-4000 which is decent. Even people running their businesses in NCR with bigger facilities can think of sharing their infrastrucre on rent. Any takers?
2. Venturing into New Areas: One of the participant was working for UNICEF for last few years. Now after deeper introspection, he realized that he should come back to corporate world. Which areas he should focus on?
a. Leveraging past domain expertise always helps you to grow faster. It was suggested that he should try to explore opportunities where he can leverage his knowledge of not-for-profit sector. There are special initiatives like Driving Simulation School, Training Schools for Security Guards, IITians for ITI, Reach 4 India which can be explored. These initiatives provide right exposure to business & social aspects.
b. He can come-up with some good initiatives which can be pitched within UNICEF or any other organization working in similar areas. The initiative can take him away from purely social-work to business related work.After all the experience which he has gained should be utilized properly.
There are a lot of other points like cost-cutting strategy by hiring right people, e-commerce proliferation,customized application packages for SME's which I would cover in the next blog. After all, its good learning experience when bunch of creative minds sit together.
Friday, July 11, 2008
10 Slides Fast-Track Business Plan Presentation
I am reproducing this article here for the benefit of budding entrepreneurs.
Business commentators are divided on the ability to effectively plan in the new economy. Some opine that the pace of change is so rapid that it is impossible to plan for the future. Successful companies during this competitive era are preparing clear, flexible business plans that develop their vision of their intended destination. Planning is necessary to develop your vision, but it needs to be flexible. As a result, I am advocating a variation of the traditional business plan that I call the "e-plan."
The e-plan helps you capture your vision while providing a flexible platform for responding to the inevitable changes and shifts in the economy. The new economy is no place for the 100-page business plan that flushes out every conceivable detail. This exercise is not about earning a gold star on your business plan from a difficult teacher or some picky banker. Rather, it is about capturing your vision in a flexible format that facilitates the execution of your business model -- that is the essence of the e-plan.
Elements of The E-Plan
Executive Summary
In the following text, I provide a one-paragraph summary of each of the slides in the e-plan. Just because a plan is concise, however, doesn't mean developing it is easy. I devote an entire chapter of my book, entrepreneurship.com to each of these slides: what information investors are looking for, how to gather and condense this information, and insights gleaned from the successes and failures of other start-ups. This article is intended as an introduction to the e-plan; my book will guide you through process of preparing one.
This one- or two-page document is the single most important part of your plan. In a nutshell, it summarizes your particular market opportunity and the solution to a problem that your business offers. Busy investors often don't have the time to read the complete business plan, particularly when they are qualifying potential businesses. They usually rely on the executive summary to provide a snapshot of your business model. One way to look at the summary is to think of it as the story of your business. What need does your business fulfill? How can you best summarize your business in 60 seconds or less? What is your vision?
Slide 1: Name of Company
Suffice it to say that the name of any Internet business is extremely important. As you might have already found out, selecting a domain name these days is no simple matter. Choice domain names are being bought and sold for heavy premiums. With the domain name so important, it is obviously something to which you need to give considerable thought. Start immediately searching for one if you don't have a name already.
Slide 2: Mission Statement
The mission statement is an abbreviated form of the executive summary. In one or two sentences, what does your company stand for?
Slide 3: Management Team
The management team is of particular concern to investors. Note that I use the word team. Writer John Dunne proclaimed that "no man is an island." In addition, no entrepreneur is an island, either. The entrepreneurs that can attract the right people are the ones that ultimately succeed. The management team is the backbone of the company. A founder that cannot attract a quality management team will have trouble attracting good employees as well as customers.
Slide 4: Market
This slide will analyze the size of the potential market as well as its growth rate. One of the primary advantages of the Internet is that the target markets are so huge.
Slide 5: Industry
Industry concerns a discussion of the structure of the particular industry that you are targeting. Who are the buyers and the sellers? Who are the suppliers? What is the market chain of the industry? How would you diagram it? Is the industry in a growth mode?
Slide 6: Pain -- The Market Opportunity
This slide considers the pain or the opportunity in the market. Where is that part of the market broken or inefficient? How does it create an opportunity for you? Where is a problem that your business will solve? The best business opportunities are based on the most compelling needs of the marketplace. This often applies to a highly fragmented industry or an industry with an inefficient market chain.
Slide 7: Solution
What is your solution to the problem or pain in the marketplace? What is your answer to the disintermediation or the need in the marketplace? How does your product or service benefit the marketplace? Why is your solution unique from others? Do you have a competitive advantage that can be sustained? Is your solution scalable, allowing it to be implemented on a large scale?
Slide 8: Marketing Plan
This slide represents an overview of your marketing plan. How are you going to attract customers? Are there viral marketing possibilities you can exploit? Viral marketing is a strategy in which customers do much of the marketing for you. What unique marketing advantages do you have? What important alliances can you develop?
Slide 9: Financial Projections
This portion of the plan involves the projection of revenues and expenses from the business. Although many investors discount projections, they can play an important role in examining the financial portion of the business model. The most useful projections are developed around a meaningful unit of measure, or metric. For example, revenues and expenses could be analyzed and expressed on a per customer basis. What is your acquisition cost per customer? What is his or her worth in terms of lifetime revenue? How many customers do you need to break even? Your projections should detail your use of start-up funds, which include capital expenses and working capital needs until the business reaches breakeven.
Slide 10: Valuation Analysis
This final slide can be thought of as a segue between where your presentation ends and negotiation begins. Build the case for the valuation of your company based on your business model. Choose the most relevant metrics to compare your business with one traded publicly. This slide is very useful in talking with potential investors and employees.
Uses of The E-Plan
The main audience for your e-plan is you. First and foremost, the e-plan is a way of quickly capturing your vision and putting it in a format for execution. The plan has to make sense to you and guide you in propelling your vision into reality.
The next audience for your business plan is potential investors. Investors today simply don't have the time to wade through long plans. A short, direct format serves the purpose better. Moses Joseph of Anila Corporation relayed that knowledge of the market is much more important than a written business plan. He mentioned that he can tell whether a person really knows the market within five minutes of talking to him or her. In Joseph's opinion, the value is not so much the written plan but rather the discipline of the planning process itself. This process forces you to fully examine the particular market opportunity and confront certain critical issues associated with your venture. It is very important for entrepreneurs to completely and fully understand their markets.
The next audience for your business plan is your potential employees, suppliers, and affiliates. For this use, a good business plan can show them that your business is for real and that you have given it considerable thought.
Enter The E-Plan
Extensive business plan were often aimed at traditional lenders who wanted to be sure that no stone was left unturned. Chances are that in today's economy, many of the old stones will disappear and be replaced by new ones by the time a conventional business plan is finished.
I was never a fan of the business plan treatise. Supplementary information, such as product circulars and marketing materials, can be included in an appendix, but the narrative part of the plan should be a maximum of 20 pages. The object is not to unearth every conceivable detail but to think through your business model. Few plans are read in their entirety by potential investors, and the new economy requires an even more concise way of formulating a business model.
This new format -- the e-plan -- is designed to help all the users of the business plan, which includes the entrepreneur as well as potential investors and employees. It is streamlined both for speed of digestion and ease of use.
The e-plan consists of an executive summary and approximately a dozen PowerPoint slides. Each slide addresses an important component of your business model. I consider the e-plan to be more of a compass than a map. It is designed to guide you in the right direction but is flexible enough to accommodate shifts and changes in the marketplace. As these changes occur, the e-plan can be used to produce a corresponding shift in strategy.
Some of the advantages of the e-plan format are its overview, flexibility, and presentation.
Overview. The executive summary and the slide format provide a quick overview of all important components of your business model and provide a comprehensive understanding of the model. The e- plan serves as a ready reference for the big picture.
Flexibility. The slide format provides you with the ability to change directions quickly. As changes occur in the marketplace, your big picture can be changed accordingly.
Presentation. The slide format also facilitates the presentation of your business to potential investors and employees. Chances are that more people will be hearing your presentation as opposed to reading your plan.
Article Copyright 2001 by Tim Burns, author of Entrepreneurship.com. All Rights Reserved. Click here
Business commentators are divided on the ability to effectively plan in the new economy. Some opine that the pace of change is so rapid that it is impossible to plan for the future. Successful companies during this competitive era are preparing clear, flexible business plans that develop their vision of their intended destination. Planning is necessary to develop your vision, but it needs to be flexible. As a result, I am advocating a variation of the traditional business plan that I call the "e-plan."
The e-plan helps you capture your vision while providing a flexible platform for responding to the inevitable changes and shifts in the economy. The new economy is no place for the 100-page business plan that flushes out every conceivable detail. This exercise is not about earning a gold star on your business plan from a difficult teacher or some picky banker. Rather, it is about capturing your vision in a flexible format that facilitates the execution of your business model -- that is the essence of the e-plan.
Elements of The E-Plan
Executive Summary
In the following text, I provide a one-paragraph summary of each of the slides in the e-plan. Just because a plan is concise, however, doesn't mean developing it is easy. I devote an entire chapter of my book, entrepreneurship.com to each of these slides: what information investors are looking for, how to gather and condense this information, and insights gleaned from the successes and failures of other start-ups. This article is intended as an introduction to the e-plan; my book will guide you through process of preparing one.
This one- or two-page document is the single most important part of your plan. In a nutshell, it summarizes your particular market opportunity and the solution to a problem that your business offers. Busy investors often don't have the time to read the complete business plan, particularly when they are qualifying potential businesses. They usually rely on the executive summary to provide a snapshot of your business model. One way to look at the summary is to think of it as the story of your business. What need does your business fulfill? How can you best summarize your business in 60 seconds or less? What is your vision?
Slide 1: Name of Company
Suffice it to say that the name of any Internet business is extremely important. As you might have already found out, selecting a domain name these days is no simple matter. Choice domain names are being bought and sold for heavy premiums. With the domain name so important, it is obviously something to which you need to give considerable thought. Start immediately searching for one if you don't have a name already.
Slide 2: Mission Statement
The mission statement is an abbreviated form of the executive summary. In one or two sentences, what does your company stand for?
Slide 3: Management Team
The management team is of particular concern to investors. Note that I use the word team. Writer John Dunne proclaimed that "no man is an island." In addition, no entrepreneur is an island, either. The entrepreneurs that can attract the right people are the ones that ultimately succeed. The management team is the backbone of the company. A founder that cannot attract a quality management team will have trouble attracting good employees as well as customers.
Slide 4: Market
This slide will analyze the size of the potential market as well as its growth rate. One of the primary advantages of the Internet is that the target markets are so huge.
Slide 5: Industry
Industry concerns a discussion of the structure of the particular industry that you are targeting. Who are the buyers and the sellers? Who are the suppliers? What is the market chain of the industry? How would you diagram it? Is the industry in a growth mode?
Slide 6: Pain -- The Market Opportunity
This slide considers the pain or the opportunity in the market. Where is that part of the market broken or inefficient? How does it create an opportunity for you? Where is a problem that your business will solve? The best business opportunities are based on the most compelling needs of the marketplace. This often applies to a highly fragmented industry or an industry with an inefficient market chain.
Slide 7: Solution
What is your solution to the problem or pain in the marketplace? What is your answer to the disintermediation or the need in the marketplace? How does your product or service benefit the marketplace? Why is your solution unique from others? Do you have a competitive advantage that can be sustained? Is your solution scalable, allowing it to be implemented on a large scale?
Slide 8: Marketing Plan
This slide represents an overview of your marketing plan. How are you going to attract customers? Are there viral marketing possibilities you can exploit? Viral marketing is a strategy in which customers do much of the marketing for you. What unique marketing advantages do you have? What important alliances can you develop?
Slide 9: Financial Projections
This portion of the plan involves the projection of revenues and expenses from the business. Although many investors discount projections, they can play an important role in examining the financial portion of the business model. The most useful projections are developed around a meaningful unit of measure, or metric. For example, revenues and expenses could be analyzed and expressed on a per customer basis. What is your acquisition cost per customer? What is his or her worth in terms of lifetime revenue? How many customers do you need to break even? Your projections should detail your use of start-up funds, which include capital expenses and working capital needs until the business reaches breakeven.
Slide 10: Valuation Analysis
This final slide can be thought of as a segue between where your presentation ends and negotiation begins. Build the case for the valuation of your company based on your business model. Choose the most relevant metrics to compare your business with one traded publicly. This slide is very useful in talking with potential investors and employees.
Uses of The E-Plan
The main audience for your e-plan is you. First and foremost, the e-plan is a way of quickly capturing your vision and putting it in a format for execution. The plan has to make sense to you and guide you in propelling your vision into reality.
The next audience for your business plan is potential investors. Investors today simply don't have the time to wade through long plans. A short, direct format serves the purpose better. Moses Joseph of Anila Corporation relayed that knowledge of the market is much more important than a written business plan. He mentioned that he can tell whether a person really knows the market within five minutes of talking to him or her. In Joseph's opinion, the value is not so much the written plan but rather the discipline of the planning process itself. This process forces you to fully examine the particular market opportunity and confront certain critical issues associated with your venture. It is very important for entrepreneurs to completely and fully understand their markets.
The next audience for your business plan is your potential employees, suppliers, and affiliates. For this use, a good business plan can show them that your business is for real and that you have given it considerable thought.
Enter The E-Plan
Extensive business plan were often aimed at traditional lenders who wanted to be sure that no stone was left unturned. Chances are that in today's economy, many of the old stones will disappear and be replaced by new ones by the time a conventional business plan is finished.
I was never a fan of the business plan treatise. Supplementary information, such as product circulars and marketing materials, can be included in an appendix, but the narrative part of the plan should be a maximum of 20 pages. The object is not to unearth every conceivable detail but to think through your business model. Few plans are read in their entirety by potential investors, and the new economy requires an even more concise way of formulating a business model.
This new format -- the e-plan -- is designed to help all the users of the business plan, which includes the entrepreneur as well as potential investors and employees. It is streamlined both for speed of digestion and ease of use.
The e-plan consists of an executive summary and approximately a dozen PowerPoint slides. Each slide addresses an important component of your business model. I consider the e-plan to be more of a compass than a map. It is designed to guide you in the right direction but is flexible enough to accommodate shifts and changes in the marketplace. As these changes occur, the e-plan can be used to produce a corresponding shift in strategy.
Some of the advantages of the e-plan format are its overview, flexibility, and presentation.
Overview. The executive summary and the slide format provide a quick overview of all important components of your business model and provide a comprehensive understanding of the model. The e- plan serves as a ready reference for the big picture.
Flexibility. The slide format provides you with the ability to change directions quickly. As changes occur in the marketplace, your big picture can be changed accordingly.
Presentation. The slide format also facilitates the presentation of your business to potential investors and employees. Chances are that more people will be hearing your presentation as opposed to reading your plan.
Article Copyright 2001 by Tim Burns, author of Entrepreneurship.com. All Rights Reserved. Click here
Wednesday, July 9, 2008
Support from Family Members for Entrepreneurs
Sometime back I wrote about 6 Key Aspects before Quiting your Job to start at your own which includes one key aspect "Financial commitment & support". The support of family-members and friends during initial days helps a lot to keep the ball rolling. Any startup venture has initial gestation period before tasting success. For first generation entrepreneurs the time-period may be even longer. I am detailing few scenarios in which you get support from family-members & close friends:
1. Scenario 1 : You went out to meet a potential client, to pitch your product/service. He listened to you for few minutes and then moved out suddenly saying he need to attend a meeting in next 2 minutes. He asked his subordinate to keep a copy of your presentation. You forwarded the presentation and came back to your office. You felt that the boat drowned even before sailing for some time. The potential client was strategic and your mood was offbeat due to the series of events. You came back to your home, but still your mind was processing the same data. Your spouse & kids anticipated that you are feeling low. Your spouse discussed few general things and positive things happening in life. Your kids gave a cute smile and asked silly questions. These things helped you to come-out of bad experience. You discussed the whole episode with your spouse and she said its OK, losing one potential client is not the end of your journey. Next morning your batteries are recharged, and your are geared-up for next business meeting.
2. Scenario 2 : You hired a very good software engineer few months back and he was doing great job for your company. One fine day he came to your desk and informed that he is leaving your company in next 15 days. You felt a lot of pain, since a lot of deadlines were associated with this chap and now all estimations may go haywire. Somehow you convinced that guy to stay for 1 month. You were thinking, what to do next and suddenly you thought of calling one close friend. After few minutes of casual chat you discussed your problem with him. He said that he got few references and passed on the details to you. You talked to them and got a good candidate within next 2 weeks.
3. Scenario 3 : Today is last day of the month and you need to pay salaries to your employees. A few employees need to pay EMI of their home-loan, hence a single day delay would mean some financial loss for them. You are getting monthly service fees from your client ( which is around 50% of your total revenues) and normally you receive it by 25th of the month, but this month they won't be able to pay before 05th day of next month. Now you are stuck? The current reserves can take care of 60% of your requirements, but still you need 40%. You give a call to one of your old friends who is running his own business and he assured you to give 20% immediately. The amount is credited to your account in an hour. The rest 20% you manage from your close family-members. On receipt of money from client you return the money with BIG THANKS.
So in short you get financial support, emotional support, strategic directions , feedback and lot of other good things from your family-members and friends. So keep them involved to make your venture successful.
Read similar story here.
1. Scenario 1 : You went out to meet a potential client, to pitch your product/service. He listened to you for few minutes and then moved out suddenly saying he need to attend a meeting in next 2 minutes. He asked his subordinate to keep a copy of your presentation. You forwarded the presentation and came back to your office. You felt that the boat drowned even before sailing for some time. The potential client was strategic and your mood was offbeat due to the series of events. You came back to your home, but still your mind was processing the same data. Your spouse & kids anticipated that you are feeling low. Your spouse discussed few general things and positive things happening in life. Your kids gave a cute smile and asked silly questions. These things helped you to come-out of bad experience. You discussed the whole episode with your spouse and she said its OK, losing one potential client is not the end of your journey. Next morning your batteries are recharged, and your are geared-up for next business meeting.
2. Scenario 2 : You hired a very good software engineer few months back and he was doing great job for your company. One fine day he came to your desk and informed that he is leaving your company in next 15 days. You felt a lot of pain, since a lot of deadlines were associated with this chap and now all estimations may go haywire. Somehow you convinced that guy to stay for 1 month. You were thinking, what to do next and suddenly you thought of calling one close friend. After few minutes of casual chat you discussed your problem with him. He said that he got few references and passed on the details to you. You talked to them and got a good candidate within next 2 weeks.
3. Scenario 3 : Today is last day of the month and you need to pay salaries to your employees. A few employees need to pay EMI of their home-loan, hence a single day delay would mean some financial loss for them. You are getting monthly service fees from your client ( which is around 50% of your total revenues) and normally you receive it by 25th of the month, but this month they won't be able to pay before 05th day of next month. Now you are stuck? The current reserves can take care of 60% of your requirements, but still you need 40%. You give a call to one of your old friends who is running his own business and he assured you to give 20% immediately. The amount is credited to your account in an hour. The rest 20% you manage from your close family-members. On receipt of money from client you return the money with BIG THANKS.
So in short you get financial support, emotional support, strategic directions , feedback and lot of other good things from your family-members and friends. So keep them involved to make your venture successful.
Read similar story here.
Tuesday, July 8, 2008
IIT's role in promoting Entrepreneurship : 2008 Global Conference
The IIT Global Alumni Conference has established itself as a premier event by bringing together an eclectic group of industry visionaries, thought leaders and IIT Alumni from across the globe.
The overall theme for the 2008 Global Conference to be organized at IIT Chennai from 19th to 21st December is "Inspire, Innovate, Transform". Under this banner, six thematic tracks have been identified to help provide greater focus, and to enable participants to derive the maximum value in their area of interest. These tracks are:
1. IIT's role in promoting Entrepreneurship
2. Research & Technology initiatives in Nation-building
3. Vision & Leadership in Rural Transformation
4. Challenges & Opportunities in India's Infrastructure
5. Enhancing Quality & Accessibility in Education
6. Innovate or Stagnate: India's road ahead
In the Entrepreneurship track, key issues involving IITs can be reviewed:
• Impact/ Payback/ Value-Add Analysis for IITs
• Science & Technology in the Service of Society
• Role in Nation-Building, Sustainable Development
• Finance and Support Options for Micro-Entrepreneurs
Click here to see the list of panelists & speakers.
One can participate as a panelist, speaker or moderator in any of the tracks mentioned above? Click here
What's your take on IITians role in promoting Entrepreneurship.
Sunday, July 6, 2008
6 Key Aspects before Quiting your Job to start at your own
Sometime back, I was talking to a manager of incubation center and he was discussing specific case of a senior executive of big MNC, who started his venture recently. This gentleman was having a great idea, but he wasn't sure about startup dynamics & uncertainties and also the idea of losing annual benefits of INR 7.5 Million was frightening him. He was totally confused?
Then one fine day he decided to start this venture on part-time basis for few months and based on initial development he thought of deciding his future road-map. The idea started taking shape appropriately and within 2 months he started running his venture full-time.
This is very common dilemma for people who want to start their venture after working for few years. I think every person trying to start his venture should look at following 6 aspects before quiting job:
1. Idea Valuation : One should try to test the value of idea by involving all key participating parties. One should talk to customers, suppliers, friends, family-members and investors to get their feedback on envisioned idea. Valuation of market-size using standard market research tools also helps a lot. The valuation should be done subjectively & objectively. The subjective elements would be - need of product/service, competition, innovation etc. If you are smart, then your idea won't get copied and you would get feedback from stakeholders too.
2. Self- Assessment : One should carry out detailed self-assessment to find out strengths and weaknesses. If possible, try to list down and your strengths. Try to evaluate your professional expertise in terms of technology knowledge, team-management, quality , anger management, client interaction and other business aspects. Running your own startup would require multi-tasking and prior knowledge of technology & business aspects would help a lot. One should strongly believe in the idea and execute it well. A lot of things/situations would be new and one should be comfortable handing such things/situation.People with less professional experience should try to start anticipating these key aspects of any business/technology.
3. Financial Commitments & Support : One should try to estimate past & future financial commitments. The point is to take a stock of bare minimum financial requirements ( assuming everything would be normal).Also one should try to see for alternate sources of income during initial phase of start-up, in case you are self-funded. I remember Sanjeev Bikchandani ( CEO- Naukri.com)joined a management institute, as part-time faculty to support his venture and get some cash in hand. Try to gauge the support level of your family members and close-friends who may help you out in case of any adversities.
4. Short-term & Long-term plan: Before starting your venture you should have clarity about your short-term and long-term plans. Try to set some targets for next 2-3 years for benchmarking performance against targets. Also in case the venture becomes unsuccessful, then one should have clarity about future course of action.
5. Right Team in Place : One should have right mix of people to make any venture successful. Before quiting your job one should try to form the right team ( formal/informal commitments ). This would boost-up your confidence and help venture grow at fast pace. Right mix of people helps a lot in securing funding from angels and venture capitalists.
6. Right Network in Place : Building a good network of people would help you to take your venture to greater heights. Try to establish & develop contacts of people working in different fields. You can start with your college, organization, social-networking platforms, events etc to look-out for good people. Be proactive in relevant groups & social forums. A lot of people would help, if they start believing in you and your vision.
If you have evaluated following points and most of them work in your favour then the time is just right to start your venture.
$6.00 Welcome Survey After Free Registration!
Then one fine day he decided to start this venture on part-time basis for few months and based on initial development he thought of deciding his future road-map. The idea started taking shape appropriately and within 2 months he started running his venture full-time.
This is very common dilemma for people who want to start their venture after working for few years. I think every person trying to start his venture should look at following 6 aspects before quiting job:
1. Idea Valuation : One should try to test the value of idea by involving all key participating parties. One should talk to customers, suppliers, friends, family-members and investors to get their feedback on envisioned idea. Valuation of market-size using standard market research tools also helps a lot. The valuation should be done subjectively & objectively. The subjective elements would be - need of product/service, competition, innovation etc. If you are smart, then your idea won't get copied and you would get feedback from stakeholders too.
2. Self- Assessment : One should carry out detailed self-assessment to find out strengths and weaknesses. If possible, try to list down and your strengths. Try to evaluate your professional expertise in terms of technology knowledge, team-management, quality , anger management, client interaction and other business aspects. Running your own startup would require multi-tasking and prior knowledge of technology & business aspects would help a lot. One should strongly believe in the idea and execute it well. A lot of things/situations would be new and one should be comfortable handing such things/situation.People with less professional experience should try to start anticipating these key aspects of any business/technology.
3. Financial Commitments & Support : One should try to estimate past & future financial commitments. The point is to take a stock of bare minimum financial requirements ( assuming everything would be normal).Also one should try to see for alternate sources of income during initial phase of start-up, in case you are self-funded. I remember Sanjeev Bikchandani ( CEO- Naukri.com)joined a management institute, as part-time faculty to support his venture and get some cash in hand. Try to gauge the support level of your family members and close-friends who may help you out in case of any adversities.
4. Short-term & Long-term plan: Before starting your venture you should have clarity about your short-term and long-term plans. Try to set some targets for next 2-3 years for benchmarking performance against targets. Also in case the venture becomes unsuccessful, then one should have clarity about future course of action.
5. Right Team in Place : One should have right mix of people to make any venture successful. Before quiting your job one should try to form the right team ( formal/informal commitments ). This would boost-up your confidence and help venture grow at fast pace. Right mix of people helps a lot in securing funding from angels and venture capitalists.
6. Right Network in Place : Building a good network of people would help you to take your venture to greater heights. Try to establish & develop contacts of people working in different fields. You can start with your college, organization, social-networking platforms, events etc to look-out for good people. Be proactive in relevant groups & social forums. A lot of people would help, if they start believing in you and your vision.
If you have evaluated following points and most of them work in your favour then the time is just right to start your venture.
$6.00 Welcome Survey After Free Registration!
Saturday, July 5, 2008
Proto.in Entry Passes: Now in Noida and Delhi
Tickets of Proto.in ( Priced 500 INR/ticket ) now available in Noida & Delhi. Contact:
Sudhakar Mishra
KritiKal Solutions Pvt. Ltd.
A-28, Ground Floor,
Sec -16, Noida,
U.P. India 201301
M : 09911816702
Deepak Khanna/Tanya Seth
Travel Boutique Online
75-76 Adchini, 2nd floor
Aurobindo Marg,
New Delhi
Directions:
Take right turn under the IIT flyover towards Mehrauli. The building is on the left side about 1 K.M down the road (just before Turquoise Cottage). There is an Allahabad Bank branch on the ground floor and a large “Travel Boutique Online” board as well.
Proto.in is the startup event that happens in India, inviting entrepreneurs from within and around the subcontinent to participate, share, discuss and draw strength from the growing entrepreneurial demand and knowledge base that is created, in an effort to create world-class product leaders from the region. Proto is about celebrating entrepreneurship, and encouraging it where it matters the most - at the startup level!
1. To Showcase Innovative technology products born out of India
2. To Encourage, grow and create entrepreneurial awareness
3. To create a community of startup entrepreneurs, who can grow in strength and numbers, drawing wisdom from each other.
4. To act as a bridge between well-established companies, veteran entrepreneurs, venture capitalists, analysts, journalists, professionals and grass-root entrepreneurs.
$6.00 Welcome Survey After Free Registration!
Friday, July 4, 2008
Startup Myths Shattered - Eye-Opener for Budding Entrepreneurs
Before starting any venture we keep on rethinking the risks of a new business. Our mind is full of many doubts & uncertainties.Most of us believe that starting a business is risky, costly, and only for extraordinary individuals. No, says University of Central Florida management professor Bruce Barringer, who discusses his new book. Hear him in conversation with Business Week.
Download this episode (right click and save)
$6.00 Welcome Survey After Free Registration!
Download this episode (right click and save)
$6.00 Welcome Survey After Free Registration!
Wednesday, July 2, 2008
Company Formation in India
Once your idea starts maturing, the next logical step is to begin the company formation procedure. It helps founders to formalize the business with underlying benefits like limited liability, transfer of ownership, perpetual succession, benefits in taxation, raising of money, sale of business entity.
One need to evaluate the various available options before finalizing the company structure. For some companies a partnership may work fine while for others private limited would be the best choice.
One need to understand the incorporation procedure & requirements for Company formation to ease-out the whole process.
STEP I: DECIDING THE FORM OF COMPANY TO BE INCORPORATED
STEP II: OBTAINING DIN & DIGITAL SIGNATURE CERTIFICATE
STEP III: CHECKING OUT THE NAME AVAILABILITY. Check Now.
STEP IV: STAMPING OF MEMORANDUM & ARTICLES OF ASSOCIATION (MOA/AOA)
STEP V: FILING OF FORM 1, 18 & 32 ALONG WITH MOA/AOA
All the above-mentioned activities would result in getting CERTIFICATE OF INCORPORATION and initiation of Company. Source
The total expenses in Company formation is roughly INR 25K and time required is not more than 3-4 Weeks ( Even few people completed the whole process in 2-3 Days).
For more details visit MCA Website.
One need to evaluate the various available options before finalizing the company structure. For some companies a partnership may work fine while for others private limited would be the best choice.
One need to understand the incorporation procedure & requirements for Company formation to ease-out the whole process.
STEP I: DECIDING THE FORM OF COMPANY TO BE INCORPORATED
STEP II: OBTAINING DIN & DIGITAL SIGNATURE CERTIFICATE
STEP III: CHECKING OUT THE NAME AVAILABILITY. Check Now.
STEP IV: STAMPING OF MEMORANDUM & ARTICLES OF ASSOCIATION (MOA/AOA)
STEP V: FILING OF FORM 1, 18 & 32 ALONG WITH MOA/AOA
All the above-mentioned activities would result in getting CERTIFICATE OF INCORPORATION and initiation of Company. Source
The total expenses in Company formation is roughly INR 25K and time required is not more than 3-4 Weeks ( Even few people completed the whole process in 2-3 Days).
For more details visit MCA Website.
Good Opportunity : Payment via Mobiles to Hit $300B by 2013
Few days back I wrote about potential of mobile-oriented startups. Now that has been substantiated further by analyst house Juniper Research. According to analysts mobile expenditures will expand fivefold over the next five years. Ticketing for transportation and entertainment will be the lion's share.
Western Europe is currently dominated by digital goods and services sold via SMS, while in the Far East region Japan is well established in physical goods sales over the mobile web.( Source)
SMS & Internet mobile will drive m-commerce and other mobile related offerings.This is a good sign for companies existing/venturing into this domain. They should try to build good service-model to attract & retain huge mobile population.
Western Europe is currently dominated by digital goods and services sold via SMS, while in the Far East region Japan is well established in physical goods sales over the mobile web.( Source)
SMS & Internet mobile will drive m-commerce and other mobile related offerings.This is a good sign for companies existing/venturing into this domain. They should try to build good service-model to attract & retain huge mobile population.
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