#20 - MAY 2009

Vol 2 / Issue 08 / May 09

/Rs 30

Why loans for women entrepreneurs are not taking off

How the economy is changing businesses Lucrative Opportunities in Spying!

investor of the month/

Sohil Chand, NVP India

Managing ATMs Doing Business in Bahrain Opportunities in Nanotechnology

innovation/

Climate Control Apparel A Low-cost Incense Stick Maker

Aircraft Leasing is Big Business

Where should iXiGO go next?

The Business of Bicycles

Do you want to be a visionary entrepreneur?

15 reasons to tie up with TiE 100 pages including cover

Vol 2 / Issue 08 / MAY 09

BOARD OF ADVISORS C K Prahalad

University of Michigan

N R Narayanamurthy

Chief Mentor, Infosys

Kanwal Rekhi

Chairman, TiE

Romesh Wadhwani Chairman & President, Wadhwani Foundation Gururaj ‘Desh’ Deshpande

Chairman, Sycamore Networks

Saurabh Srivastava Chairman, Indian Venture Capital Association Kiran Mazumdar Shaw R Gopalakrishnan

Chairman & MD, Biocon Executive Director, Tata Sons

Philip Anderson

Professor of Entrepreneurship, INSEAD

Shyam Malhotra Editor-in-Chief Krishna Kumar Group Editor

ANALYSTS Ambrish Jha Aswathi Muralidharan Binesh Kutty Vimarsh Bajpai

OPERATIONS Ajay Dhoundiyal Product Manager VIjay Rana Design Anil John Photography

SALES & MA Jaideep Mario Gabriel Imran Ali Dayanath Levaj Jagadeesh Kingshuk Sircar

MARKETING Associate VP West West South South South-East Asia

/funding

Why loans for women 36 entrepreneurs are not taking off

PRINT & CIRCULATION SERVICES NC George Associate VP T Srirengan GM, Print Services Sudhir Arora Circulation Services Manager Pooja Bharadwaj Assistant Manager, Subscriptions Sarita Shridhar Assistant Manager, Reader Service Printed and published by Pradeep Gupta.

Owner, CyberMedia (India) Ltd. Printed at International Print-O-Pack Limited, B-204-206, Okhla Industrial Area, Phase 1, New Delhi-20 Published from D-74, Panchsheel Enclave, New Delhi-17.

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BANGALORE 205, 2nd Floor, # 73, Shree Complex, St.Johns Road, Tel: 41238238 CHENNAI 5B, 6th Floor, Gemini Parsn Apts, 599 Mount Road, Tel: 28221712 KOLKATA 23/54, Gariahat Road, Ground Floor, Near South City College, Tel: 65250117 MUMBAI Road No 16, D 7/1 MIDC, Andheri (East) Tel: 28387241 DELHI D-74 Panchsheel Enclave Tel: 41751234 PUNE D/4 Sukhwani Park North Main Road, Koregaon Tel: 64004065

Almost all public sector banks have special loan schemes for women entrepreneurs. But low awareness and a passive mindset ensure that there are very few takers

How the economy is changing businesses

46

SECUNDERABAD #5,6 1st Floor, Srinath Commercial Complex, SD Road. Tel: 27841970 SINGAPORE 1, North Bridge Road, # 14-03 High Street Center Tel: +65-63369142 CORPORATE OFFICE Cyber House, B-35, Sec 32, Gurgaon, NCR Delhi-122001.

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100 pages including cover

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MAY 2009

How the changing economy is impacting the way they do business

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/contents

58

opportunities/ Aircraft Leasing is Big Business .............. 14 10 out of the way hotel concepts .............. 28

opportunities/

Nanotechnology ........................................ 72

Managing ATMs

Managing ATMs ........................................ 76 The Business of Bicycles .......................... 82 investor of the month

Sohil Chand MD, Norwest Venture Partners India

NVP is a global venture capital firm. MD Sohil Chand is focused on making growth equity investments in Indian companies across a wide range of sectors, including telecom, technology, financial services, infrastructure and manufacturing.

global opportunities/ Doing Business in Bahrain ...................... 52 report/ Internet services by Akamai ..................... 62 event/ Online Ventures Rule................................ 93 Entrepreneurship in reel life .................... 96

Philip Anderson ........ 18

opportunity/ Lucrative Opportunities in Spying!

Rupin Jayal ............. 44 Anurag Batra ........... 80

Private detective agencies have sprung up all over India. They are involved in solving all sorts of personal, corporate, and criminal cases.

68 brand

capital

come

business

INSEAD/

companies

company

Where should iXiGO go next? ...................... 20

cost country crore customers delhi don’t entrepreneur entrepreneurs experience growth help high idea india indian industry investment

like

Fast-expanding banking facilities in rural areas and small towns, growing number of bank card users, and supportive RBI policies are boosting the growth of the ATM business

innovation/ A Low-cost Incense Stick Maker ............... 34

blogs/columns

based

76

look

make

management market marketing money need number people products second services start team technology think time used value venture want waste work world years

15 reasons to tie up with TiE ....................... 40

NEN /

innovation/ Climate Control Apparel This innovative piece of clothing and headgear can make life easier for those exposed to adverse climatic conditions

Campus Company .................................... 90

others /

26

Exchange ............................................... 08 Feedback ............................................... 12 MAY 2009 5

www.dare.co.in

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blogs/edit

Fighting fear, uncertainty and doubt There are only two weapons to fight FUD with. The first is the truth.

The truth about your business, your products, your capabilities and most importantly about yourselves. You need to face, confront, accept and where necessary overcome (the limitations of) the truth

F

UD the acronym for fear, uncertainty and doubt is a fairly common term in marketing circles, particularly in the IT industry. Creating FUD in the

customers’ minds about competitors’ product is a more or less standard marketing gimmick used by vendors across industries, especially when they have nothing else to talk about.

If you pause to take a look at the state of the world right now, then there is no other word that describes it better than FUD. We are caught in a collective web of fear, uncertainty and doubt about everything out there – about the economy, about our financial institutions, about our stock markets, about our leaders and often enough about ourselves too.

In the world of marketing warfare, the FUD sometimes gets so furious and so believable enough to doom otherwise excellent products. The same thing is happening on a much larger scale all around us now. In the not too distant past we were a nation that believed in a great destiny waiting to happen. We believed that the future belonged to us. A year later, we are deep in the doldrums – not sure what the future holds; not sure how to outlast the tough times.

There are only two weapons to fight FUD with. The first is the truth. The truth about your business, your products, your capabilities and most importantly about yourselves. You need to face, confront, accept and where necessary overcome (the limitations of ) the truth.

The second weapon is belief in yourselves and in your ability to fight and overcome the FUD around you. And that derives from the first weapon – knowing the truth.

/Krishna Kumar

MAY 2009 7

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• partners • mentoring • funding • guidance • advice • ideas...

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eing already into the renewable energy (solar PV) sector, I would like to diversify into the

I

am a fashion designer and am doing freelance work. I want to start a day-care facility for kids

carbon trading and offset business. I want to have

who are 3 months to 3 years old. I reside in MMDA

a mentor to guide for carbon credit technical know-

near Koyembedu, Chennai. Please guide me on how

how as well as assign practical industry projects.

to go about setting up the facility, the marketing

Gaurav Shah Electrick Solutions

A

business can always be classified into two categories—need and luxury. A need-based

business is almost recession-free, whereas the luxury segment invites huge incentives and attracts recession. I have chalked out a plan that includes

aspect and some other tips.

Pria

P

ublished: April 2009 Priyanka Jha wanted to start a lifestyle magazine,

for which she wanted to meet entrepreneurs who could help her with insights.

both the things – “Then Indian Wedding,” a need to

Responses: April 2009

get married in which often luxury is involved.

I want to contact Priyanka Jha for her

Recently in a survey by an established BPO and a

lifestyle magazine venture.

government enterprise it was found that 70% of the

Roshan Shah CEO, Gloscon

BPO employees were willing to go online to search for a partner whereas in government undertaking firms, only 20% of the employees would do the same.

After evaluating all the possibilities, I have come

I am interested in Priyanka Jha’s lifestyle magazine project and would like to contact her.

with a solution wherein lies a huge potential. The

Ajay Yadav

calculations suggest an investment of around Rs 1.5 crore for a pan-India presence with a return on investment of minimum 45% (post survey) and a growth potential of 90-140% as per national data at the minimum. Interested parties may get in touch.

Amit Suri

P

ublished: April 2009 Gurav Bansal of Eduvision was interested in

seed funding IT startups with core expertise in web development (php, msql)/internet marketing (seo, smo, ppc, ad agency).

I

am well aware of the scope of the energy sector as

Response: April 2009

non-renewable sources are gradually vanishing

In the April issue of DARE, I read an

and the renewable sources are setting the new trend.

exchange that Gaurav Bansal of Eduvision

I want to start my own venture and would like to

India Services is looking for young and dynamic

enter this business with minimum investment. I

founders with strong team and expertise. I am the

would like to contact those who could guide me to

founder of Spritle Software, a startup and would like

set up a plant in Ludhiana, Punjab (North India).

to contact him.

Karan Gupta

8

MAY 2009

Balaji D Loganathan, Founder & Agile Java Architect, Spritle Software

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• partners • mentoring • funding • guidance • advice • ideas...

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ublished: November 2008 Arjun Rajkumar wanted help for forming a base

team for his Internet-education venture.

I

have always been very keen in the retail sector, especially food and beverages. I have a good

location, which has the potential to grow, and a unique plan to start this venture. However, I need

Response: April 2009 I want to contact Arjun Rajkumar, who had mentioned about building a team for his next Internet-education venture in the exchange

funds to get started; I am not looking for a huge amount though. I would like to meet investors interested in the venture.

Neha Nirmal

section of the November 2008 issue of DARE. Suresh GT

W

e are manufacturing technology professionals seeking financial partners. Ours is a two-year

old, pre-revenue company, with a global footprint.

Our founders are recognized experts with 20+ years of cumulative global experience. Our USP is to reduce weight and cost of structural parts, mainly automotive, which is a key business driver today. We have helped many original equipment manufacturers (OEMs) in the

F

irst of all accept my heartiest congratulations for bringing out such a good magazine (and

maintaining the site) on such a subject, I think you guys rock!

Now let me introduce myself, I am an engineer by education and a marketing person by profession with an experience of almost ten years in the field of oil and gas. Right from the very beginning of my

last two years to cut costs and improve products. We are

professional career I wanted to start something of

looking for investments in the range US $1-3 million

my own. I intend to start Indian street food/snacks

for setting up a development trial proto facility scalable

outlets in Pune/Delhi, which can be later franchised

for production in India. An investment of one million is

all across the country (like say Jumbo King Vada Pav,

already committed by a Canadian Angel.

Mumbai).The food will be made available on stand-

Detailed business plan available. Exit options from three year end onwards. RoI > 30%. Revenue US $50 million by year 5. Addressing market size of US $30 billion. Scale up: Global.

alone carts, kiosks and even sit-down places can be considered later.

I have a few queries related to my idea: 1) Is there any professional outfit/consultant/

Abhay N

advisor/mentor who can help me with the business plan, revenue model, critical assessment,

W

e are IIT-ISB graduates promoting a venture in the stock photography industry. The web

portal is in beta phase and will be a state-of-the art market place for photographers and buyers.

We are looking for angel investors who would want to capitalize on this opportunity targeting the

their contact details.

2) What are the rules and regulations (if any) governing the placing of carts/kiosks on roadsides?(i.e. if one is required to take any permission/

multi-million dollar niche industry. Our business

license from any government department? If one

plan is ready and we require a funding to the tune of

is required to pay any rent/charge/tax to any one

Rs 20 lakhs.

for use of roads, etc) Ankur Seth

10

technical input, etc? If yes,then please provide me

MAY 2009

Purushottam Rajan

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• partners • mentoring • funding • guidance • advice • ideas...

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began reading your magazine since October 2008 and was floored by the in-depth content

that provided me with insights into extricating the entrepreneurial surge that lay dormant within me for so many years, due to a certain fear.

I have conceptualized an initiative and want to materialize it in a full-fledged company. The USP:

P

ublished: April 2009 1. Gurudatt Shenoy was planning to start a

software startup that will develop and market an innovative user identification technology and was looking for funds to take this up on a commercial level.

facilitating NGOS across India with innovative

2. Bhaskar S was planning to develop a website that

tools that help them manage their needs within

will be a single point for all the deals announced

an appropriate cost model. I am seeking only

daily and was looking for funding and support.

experienced VCs/angels investors/entrepreneurs

3. Sumit Sanghvi was looking for ideas in the

with good connections in the professional industry,

information and communications (ICT) sector

to help me get this initiative realized.

and was looking to form a team.

Neil Rego, Bangalore

4. Ernest is from the media sector and wanted to capitalize on the North-East Indian market. He

P

ublished: January 2009

was looking for angel or VC funding.

Vera wanted to understand the process involved

5. Arpan Deb buys websites that are not performing

in obtaining work-from-home assignments from

well at cheap prices, turns them around and

clients in India and abroad.

sells them for profit or retains them and sells advertisement, traffic and co-branding on

Response: April 2009 I would like to contact Vera, whose request was published in the January 2009 issue.

them. He was looking for a funding of Rs 1 crore for expansion.

Amet Tripathi Response: April 2009 Rajesh Pirgal of CPG Business Synergies

P

ublished: March 2009

had written into DARE saying she wants to

Sumit Das runs an international call center in

contact them.

Nasik and does data entry work for a domestic client.

He was looking for data entry work, PDF to DOC conversion work, OCR to DOC conversion work and non-voice data entry processes.

A

lot has been talked and written about waste management. Though every science graduate

Response: April 2009

knows about the potential of this industry, which

I would like to contact Sumit Das (GIPL

helps to create a hygienic city environment

Nasik) who runs a non-voice BPO and wants

with both revenue and employment generation,

to outsource non-voice process to others.

Amet Kumar I want to contact Sumit Das of GIPL, Nasik.

Dinesh Chaudhary

no concrete steps are taken. I am interested in taking up such a project in Bangalore, if proper support is given.

Krishna G Setty

MAY 2009 11

Feedback DARE.CO.IN

Submit your feedbacks at: website: www.dare.co.in OR email: dare@cybermedia.co.in OR SMS ‘DARE <your msg>’ to 56677

Online Movie Rental Business ARTICLE

DARE is my inspiration! MAG

I’m not going to defend the shopping

This is a detailed, well-written article

I am regular reader of DARE. I also

malls, but I have noticed they all seem

on the movie rental business. It would

keep sending feedbacks regularly.

to take on the character of their city.

be interesting to know how today’s

I would want to share that read-

For most of us, they are about the only

customers view this business. I have

ing your magazine has inspired me

option for buying moderately priced

used Seventymm and I can tell you

in becoming an entrepreneur. I have

clothing, house wares and other items

that their service does not satisfy me.

launched my own website called

of daily needs.

I am now not so inclined to try out

www.handmadeselling.com.

Whatever it may be, but I still vote

The concept is of buying and selling

for my friendly neighborhood ‘kirana’

handmade products online. It caters to

stores when it comes to groceries.

all the available handicrafts. My core

Here I would like to quote that unlike

Solar Planes: An Option for

inspiration has been the numerous ar-

a shopping mall, there is product cat-

the Future ARTICLE

ticles on handicrafts and e-commerce

egorization and the buyer has the op-

It is not clear from the article what ex-

published in your magazine.

tion of choosing his seller on the basis

any other rental service(s).

Pavithra

actly the breakthrough innovation is

Aditi Mishra

of his requirements.

Vinod Dixit

here. What is the great deal in building a solar plane with the size of an

Why Big Retail is in a Mess ARTICLE

Airbus but that seats only one person?

This refers to your “Why Big Retail is in

Printo: What next for an entrepreneurial

This could have been done any time,

a Mess” (April 2009). It seems that the

husband and wife? ARTICLE

the only reason no one did it was that

malls are about as exciting as watching

The most right decision on marriage

it is not a market requirement.

the grass grow. They all have the same

front is to have spouse from the same

stores, same stuff, over priced.

profession or be like-minded. Then

Secondly, I wish to know from Borschberg why is he targeting 0% carbon,

Over the past couple of years, malls

best of martial harmony is possible

i.e., would the plane be more practical

seem to be sprouting up everywhere.

as like-minded people get together

if he were to cut carbon emissions to,

With the sprouting up of so many

for life-long relations. When there is

say 10% or 20% and not totally zero?

commercial complexes in metros,

a same profession, the spouse un-

What if the aircraft includes a small-

I realized that we are spending a lot

derstands well the problems of the

er engine and solar power is used to

of money on building our infrastruc-

profession and can well appreciate

supplement it?

ture for commerce, but not nearly

the same. Otherwise most of the time

enough is being spent on building

there are more complaints than love

housing complexes.

in a married life of a couple if they are

Instead of charging the batteries during the flight, how about charging them from the plug before the flight?

For most customers, it’s either

from two different professions or one

Can that make this plane smaller and

good “value for money” or the “un-

is a housewife without any profes-

capable of carrying more passengers?

paralleled range” that draws them

sional background.

Ankur Bhatnagar

during special occasions and festivals.

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www.dare.co.in 12

MAY 2009

Mahesh Kapasi

DARE.CO.IN

sector/aviation

Aircraft Leasing is Big Business The aircraft leasing business has always been big, at least in terms of value. The current economic scenario is, however, providing its own set of challenges with defaults in payments and airline closures /Vimarsh Bajpai

Q

uick question: Who is the owner fleet deployed by air operators across ing global recession is causing airline operators to postpone the purchase of of the largest number of com- seven continents.

Udvar-Hazy is a leasing industry new aircrafts in favor of taking them mercial aircrafts in the world?

Hint: It is not an airline. In sheer num- veteran, having co-founded the ILFC on lease. Citing an opportunity, many bers, it is GE or rather GE Commercial in 1973, only to sell it to the AIG, the an airline is quietly stepping into the Aviation Services (GECAS), with 1,408 insurance giant, in 1990 for a whop- shoes of leasing companies by renting aircraft valued at US$ 33,259 million. ping US $1.3 billion. Besides customer out their excess capacities. Take the In terms of sheer value, GE is number performance, the ILFC today has its case of Jet Airways, believed to have two. Number one on that list is the In- own reasons to worry. Its parent com- leased out at least nine aircrafts, with ternational Lease Finance Corp (ILFC), pany recently got a US federal bailout more on the block. Kingfisher is also a fully owned subsidiary of troubled in- package of US $180 billion, leaving it said to have leased aircrafts to some surance giant American International in the clutches of the US government foreign carriers. Czech Airlines has Group (AIG), with 1,061 aircraft in its that now technically holds 80% of the entered into a pact with Nayzak Air company. This has raised questions Transport for leasing of two Boeing books valued at US $42,236 million.

Welcome to the world of com- on the ILFC’s survival, which depends 737-400 aircrafts, including crew, for mercial aircraft leasing, an industry on it meeting its debt obligations a year.

The upswing in the aircraft leasing that does not often feature in the and ensuring that its customers stay business shows in the financial results limelight, but which is facing some in business.

Despite the troubles that haunt of GECAS, which witnessed a 32% turmoil nevertheless.

As the members of the Internation- the aviation industry, the current eco- jump in lease agreements in the fourth al Society of Transport Aircraft Trad- nomic turmoil still means brisk busi- quarter of 2008 over the previous year. ing (ISTAT) wrapped up their annual ness for leasing companies. The ongo- This despite the fact that the last quarter of 2008 was by all conference in the US means a tough one. The last month, the message Top 10 Leasing Companies (2008) (value in $ million) company signed lease that emanated out of the agreements for 66 aircoveted gathering was Company Fleet Value crafts in the fourth quarloud and clear: the industry globally is facing 1. International Lease Finance Corp 1,061 42,236 ter (including 30 lease extensions and 36 fresh its worst slowdown, with aircraft manufacturers, 2. GE Commercial Aviation Services 1,408 33,259 pacts). In 2008, GECAS leased out 232 aircrafts, financiers and opera3. CIT Group 293 7,332 including 146 from its tors bleeding like never before. The sentiment 4. RBS Aviation Capital 202 7,065 existing fleet, 42 from the new order skyline is echoed by Steven Udvar-Hazy, CEO, ILFC, as 5. Babcock & Brown 268 6,830 and 44 extensions of existing leases, a jump he reportedly acknowl6. AWAS 325 5,892 of 10% over 2007. “The edged that none of his 200 customers were on 7. Aviation Capital Group 233 5,057 market is witnessing continued leasing deals the mark vis-à-vis revenue targets. The ILFC, 8. Boeing Capital Corporation 313 4,683 being signed between the leasing companies the biggest customer 9. AERCAP 231 4,255 and airlines worldwide. of aircraft manufacturing behemoths Airbus 10. Macquarie Finance 140 3,523 Dearth in financial resources to fund internal and Boeing, has over a purchases of aircrafts thousand aircrafts in its SOURCE: Flight Global (www.flightglobal.com) 14

MAY 2009

DARE.CO.IN

sector/aviation may force many airlines to increasingly rely on aircraft leasing companies,” says Global Industry Analyst, a market research publisher. As aircraft leasing activity gains momentum, DARE takes a quick look at the business.

What is aircraft leasing?

Leasing is a common practice in the airline business. Airlines take aircrafts on lease to reduce costs and to increase the number of flights quickly. Waiting periods for new aircrafts is long, running into years. Thus, leasing is often the only way out to quickly ramp up operations. Some airlines, despite owning a good number of aircraft, prefer to take a few on lease to keep their cost in check.

Types of leases There are different types of leases, depending on the terms and conditions of the agreement. These are ACMI (Aircraft, Crew, Maintenance, and Insurance), also called the wet lease, dry lease, and damp lease.

ACMI (wet lease) In the case of ACMI, the lessor (the company leasing out the aircraft) provides the crew, including pilots, engineers and flight attendants, besides maintenance and insurance. The salaries of the crew are paid by the lessor and not the lessee (the company that takes aircraft on lease). However, in this type of lease, the cost of fuel, parking, landing etc are paid by the lessee.

According to GlobalPlaneSearch.com, “The lessor will charge for the block hour (choc off to choc on) and depending on the aircraft type, sets a minimum guaranteed block hours limit per month.” Whether the plane flies or not, the lessee has to pay for the minimum guaranteed block hours. “The period can [vary] from one month to usually one to two years. Everything less than one month can be considered as adhoc charter.”

the aircraft it leases out, but will not have to bother with providing a crew to the lessee. However, sometimes the leasing company provides a trainer on board for a limited period of time to give initial guidance to the crew of the lessee.

This happens if the model of the leased aircraft is different from the one that the crew of the lessee has been flying.

Growth drivers Dry lease A dry lease does not include crew, maintenance or insurance. “A typical dry lease starts from two years onwards and bears certain conditions as far as depreciation, maintenance, insurances etc are concerned,” according to GlobalPlaneSearch.com. The average tenure of this type of lease is usually more than two years. The terms of dry lease involves aspects such as depreciation, maintenance and insurance.

Dry lease is of two types: operating and finance.

In the case of an operating lease, an aircraft is leased out for a short period of time when compared to its total life. For instance, if the life of the aircraft is, say, 20 years, under an operating lease it would be leased out for a period of about seven years. In accounting terms, the aircraft taken on an operating lease does not show up on the balance sheet of the lessee.

After the stipulated lease period, the lessee returns the aircraft and a purchase option remains closed.

However, a finance lease is a long-term lease and the lessee can

Damp lease Damp lease is wet lease minus cabin crew. This means the lessor will take care of maintenance and insurance of

purchase the aircraft on the completion of the lease period. According to GlobalPlaneSearch.com, in the case of a finance lease, the lease payments are more than 90% of the market value of the aircraft, and the term of the lease is over 75% of the aircraft’s usable life.

SOURCE: International Lease Finance Corp

One of the biggest growth drivers for the leasing business is the slump in the fortunes of airline companies. Although a dip in aviation fuel prices has brought some solace, the situation is still troublesome. The concerns of aviation industry representatives finds reflection in the recent forecast of the International Air Travel Association (IATA), which predicts global air transport industry losses to touch US $4.7 billion in 2009. “Industry revenues are expected to fall by 12% to $467 billion, worse than after the 9/11 terror attack in the US. Our loss forecast for 2009 is now $4.7 billion. Combined with an industry debt of $170 billion, the pressure on the industry’s balance sheet is extreme,” says the IATA, which represents some 230 airlines comprising 93% of scheduled international air traffic.

Other growth drivers include a sharp increase in overall air traffic (which has slipped now due to the slowdown), dip in airfares and rise in the number of low-cost carriers.

The backing of huge financial institutions that till recently have had deep pockets to buy expensive aircrafts across a wide range have also driven growth. According to research firm ATKearney, “With more than 75% of the companies backed by big financial institutions, the industry has few independent players. Moreover, the industry is dominated by two players, with over 50% of the assets: GECAS, a unit of GE Commercial Finance, and International Lease Finance Corporation, owned by AIG. Backers such as these are able to provide a range of aircraft types, secured loans and other financial solutions, a variety of engines and parts and can even help DAR E train pilots.”

MAY 2009 15

DARE.CO.IN

blogs/INSEAD

Do you want to be a visionary entrepreneur?

Above all other things, a vision is a tool for sustaining hope, confidence and commitment in the face of uncertainty

P

/Philip Anderson

18

MAY 2009

erhaps few people have anticipated a date as eagerly as the 778 people who gathered in Kanungu, Uganda March 17, 2000. They had been promised by their visionary leader that they would witness an extraordinary event: the end of the world. As one follower explained it, “Some of our leaders talk directly to God. Any minute from now, when the end comes, every believer who will be at an as yet undisclosed spot will be saved.” Like-minded believers held a party to celebrate their forthcoming rapture, roasting three bulls and consuming 70 crates of soft drinks. However, when the end of the world did not arrive as expected, the denouement was tragic: the leaders of the Movement for the Restoration of the Ten Commandments of God poisoned their followers and set off an explosion that consumed the bodies.

I relate this grisly, heartbreaking bit of history to illustrate a point: great entrepreneurs are often considered powerful, visionary leaders—but so are some raving lunatics. Having a clear and compelling vision that you and your followers believe in absolutely doesn’t necessarily mean you’ll realize your goal. Those of us who write for and work with entrepreneurs often convey the thought that they need to convert their entrepreneurial dream into a convincing and vivid vision that other can buy into. But just how important is it for you to be a visionary entrepreneur, and how do you know your vision is productive?

Having a vision is a means to a set of ends, not an end in itself. Understanding those ends allows an entrepreneur to distinguish between productive and

unproductive investments in communicating a potent vision to his or her stakeholders. If you know what a vision is for and what it does, you can craft an appropriate one and update it when necessary.

Above all other things, a vision is a tool for sustaining hope, confidence and commitment in the face of uncertainty. Uncertainty can paralyze organizations. Uncertainty lends a certain spice and excitement to life when we are uncertain about things like the outcome of a sporting match or the ending of a movie. However, when people are faced with uncertainty about where they are going or what is their purpose, they find it difficult to advance. If you believe you know where you are headed, you can pursue a path with vigor, and even if it turns out to be the wrong route, you can often make reasonable progress. If you spend your time searching for a direction, forward movement stops.

Leaders replace fear, uncertainty and doubt with hope, confidence and trust. When they are uncertain, people find it difficult to cooperate with one another. Leaders restore belief that the people who follow them can rely on one another to pull in the same direction. Leaders do this by articulating a clear picture of a better tomorrow that makes sense to the people who must collaborate in order to reach that future.

A really good vision is like a movie in your head. It is a vivid picture of what it would be like to live in a better tomorrow. You can see what happens, hear what people are saying, feel the emotions associated with that better tomorrow. If you and others can vivid-

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blogs/INSEAD ly describe what that tomorrow is like and why it will be great to live in it, you can say with confidence that you have a shared vision. Whatever happens next, we need not fear uncertainty because we can describe what it will be like when we realize our aspirations.

However, a clear vision is necessary but insufficient to hold an entrepreneurial venture on course in the face of uncertainty. Entrepreneurs need to show with some frequency that they are making progress toward a better tomorrow, even if the path into that future is not the same one we started with. Visible progress reduces the uncertainty that is always associated with entrepreneurial ventures. It creates the self-fulfilling conviction that the organization is moving forward.

The doomsday cult I described earlier had a clear vision, but the only way to show progress toward it was to let time pass. Originally, its leaders predicted the end of the world would arrive January 1, 2000. When that date passed, they moved their prediction forward by 78 days. But they had no way to show that they were advancing, and when they ran out of ways to create the illusion of progress, they chose a catastrophic alternative.

Similarly, George Bush believed he had a clear vision when he invaded Iraq: implanting a Western-style democracy in the heart of the world’s most volatile region. Unfortunately, he didn’t ask whether the people who had to cooperate in order to realize that vision bought into it. More importantly, however, he never subjected his vision to a reality check. No amount of evidence could persuade Bush and Donald Rumsfeld that Iraq was slipping away from stability. Having convinced themselves that time would solve Iraq’s problems, they had no objective way to realize it was time to change course.

A powerful vision sustains confidence only if people can visibly see themselves progressing in the right direction. As long as they believe in the goal and believe they are closing the gap between what is and what must become, they’ll tolerate course changes. But when a vision is never subject-

ed to a reality test, it is just a matter of time before it loses its power to uphold belief in a venture’s direction.

So a visionary entrepreneurial leader must create a shared “movie in your head” that creates confidence and conveys purpose while staying anchored to reality. In addition, a meaningful vision acts as a compass for an organization. It helps people figure out what choice to make when it’s not obvious which choice will produce the right outcome. A compass is not a road map. It shows direction, rather than specifying the path forward. A vision that makes a difference provides clear guidance that helps people make

“

A really good vision is like a movie in your head. It is a vivid picture of what it would be like to live in a better tomorrow. You can see what happens, hear what people are saying, feel the emotions associated with that better tomorrow. If you and others can vividly describe what that tomorrow is like and why it will be great to live in it, you can say with confidence that you have a shared vision.

”

difficult decisions that hang together over time and across organizational boundaries. If we all agree on what a better tomorrow will look like, we can subject most choices to a test: will it move us toward that shared picture of what we want our future to be?

In my teaching around the world, I often cite the vision of Ittiam as an excellent example of how powerful an entrepreneurial vision can be. Ittiam’s story is told in the November, 2007 issue of DARE. Founded by seven senior managers who left Texas Instruments in India to pursue their joint dream, Ittiam has become a leading provider of original software for digital signal processors. The founders’ vision was to create the first made-in-India com-

pany with a billion dollar market capitalization built on original intellectual property, as opposed to process outsourcing or services.

Ittiam has not achieved that dream yet. But it has animated the firm for years and provided a guidepost when the firm reaches a crossroads. Ittiam’s compass points to true north when it acts in a way that makes it more likely that it can build a company whose intellectual property in the form of proprietary software is valued by the market at a billion dollars. Hundreds of extraordinarily talented employees have stuck with the firm through thick and think because they believe their joint enterprise is truly worthy of their commitment.

Especially now, in difficult economic times, you may wish to revisit your entrepreneurial vision, and give it a tune-up if necessary. First, ask yourself if the people who work in or with your organization have a shared “movie in the head” that allows each one to perceive vividly what tomorrow will be like if you achieve your dreams, and why it would be worthwhile to live in that tomorrow. Second, ask how you measure progress toward your goal and what tells you that your vision is helping you to move forward. How do you know you’re advancing toward your better tomorrow? Third, look back on some of the tough decisions you have had to make. Ask yourself if your vision helps provide you a basis for choosing. Is your vision a compass that helps you sustain a consistent direction, even as the path you pursue twists and turns?

Finally, think about when it is time for your vision to undergo a re-vision.

A particular vision that once was an effective means toward various ends can lose that potency. When you realize that your vision is failing any of the three tests I have described, it’s time to revisit your true purposes and find another way to describe a better tomorrow that those who must work to achieve it believe is worth the struggle.

DAR E The author is INSEAD Alumni Fund Professor of Entrepreneurship, Director, Rudolf and Valeria Maag International Center for Entrepreneurship and Director, 3i Venturelab MAY 2009 19

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Where Should iXiGO Go Next?

Starting in 2006, iXiGo has grown to a 20-member organization in 2008. The company is expected to reach cash breakeven in May 2009, but it is still caught in the dilemma whether to expand slowly and steadily, or to invest in growth when costs are unusually low /Philip Anderson

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loke Bajpai scanned the table of air fares on his mobile phone, comparing options and prices from different carriers. One benefit of being the CEO of iXiGO, the travel metasearch company he had cofounded in 2006, was his familiarity with every detail of his firm’s Web site that helped him find the best flights and hotels almost immediately when he traveled. iXiGO was a meta-search engine that aggregated travel listings from other sites, enabling easy comparison of travel options with a single search. By May 2009, iXiGO was approaching cash flow breakeven, and Bajpai knew he faced a major decision in the near future. Should the venture continue to grow organically, as it had since its birth, or was it time to raise more capital, spend more aggressively on brand-building and marketing, while perhaps even expanding iXiGO’s focus outside India? Bajpai was confident in his product and his team, but wondered what was the right choice during a global economic crisis: to invest in growth when costs were unusually low, or to conserve resources by picking the steadier, slower path.

Aloke Bajpai’s entrepreneurial journey Bajpai was born in Allahabad, but because his father worked for a bank that was among the first to have branches overseas, the family transferred to 20

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“I asked my manager if I could work on Saturday or Sunday, saying I wanted to do more and was capable of doing more. He said he would need permission from his boss for me to work on Saturdays and added that if I worked on Sundays, people in the company could go to jail.”

Kenya in 1987, where they lived for 4.5 years. After returning to India, Bajpai completed an electrical engineering degree at IIT Kanpur, graduating in 2001. He then moved to France to join Amadeus, a leading European travel technology company. “It was an absolute culture shock to move to France, adjusting to everything from driving on the wrong side of the road to telling people that you are a vegetarian and then having them offer you fish, on the theory that that's not meat,” he recalls. “It was really challenging to understand how French business works in the first few months. I learned a lot from how they are able to do things more efficiently in a small number of hours. But within four weeks, I asked my manager if I could work on Saturday or Sunday, saying I wanted to do more and was capable of doing more.

He said he would need permission from his boss for me to work on Saturdays and added that if I worked on Sundays, people in the company could go to jail.”

By 2003, Bajpai realized that he wanted to have a more meaningful role in business than being a technologist.

“I thought I would move on to start something of my own in India and I realized I didn’t have the business skills I needed or the international mindset that might be required, because today business is integrated globally,” he

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case/INSEAD says. After four years with Amadeus, Bajpai left to begin business school at INSEAD’s Asia Campus in Singapore.

He spent 16 weeks there, then eight weeks at INSEAD’s Europe campus in Fontainebleau, France, followed by eight weeks at the Wharton School of the University of Pennsylvania on an exchange program. He finished up in Singapore and earned his MBA in 2005. “INSEAD gave a level playing field to people from all sorts of backgrounds,” he remarks. “Not only do they teach you about the cultures and idiosyncrasies of various nationalities, but the amount of collaboration across school projects and extra-curricular work was astounding. In Indian

business schools, I think there is less emphasis on collaborative work and more on lectures and examinations.

I learnt a lot about different kinds of people across functions, industries, and cultures. INSEAD also allows you to be politically incorrect, so you are encouraged to question everyone’s ideas or beliefs as well as your own.”

During an entrepreneurship course at INSEAD, one professor started his first class by waving a $10 note in his hand and quoting George Doriot, the founder of INSEAD—‘Without action, the world would still be an idea. “This phrase kept echoing in my head and I got up and grabbed the bank-note out of the professor’s hand,” Bajpai relates.

“The professor was happy that someone got his point. That was my first lesson in entrepreneurship.”

Bajpai was determined to return to India and launch a venture. While he was in business school, he developed a plan for a company that would provide in information technology parks lifestyle spaces where technical professionals could relax. “The concept was to create a calm place with food, beverages and massage chairs where they could spend time when they were not working,” he explains. “When I talked to people in India, they were not receptive and I realized that the idea was not scalable and had too many operational challenges.” Bajpai decided

The concept was to create a calm place with food, beverages and massage chairs where they could spend time when they were not working.

When I talked to people in India, they were not receptive, and I realized that the idea was not scalable and had too many operational challenges.

— Alok Bajpai Co-founder, iXiGO

MAY 2009 21

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case/INSEAD therefore to join another company in order to build up his resources and get re-acquainted with India. “I hadn’t lived in India for four years and I didn’t recognize the new buildings and roads in Delhi,” he says. “I realized I needed to ground myself in India before starting a company.”

Bajpai joined a midsized company that provided enterprise resource planning software for the travel industry. The firm, FinalQuadrant, was located in Noida, but was setting up operations in Europe and the United States. As vice president of distribution and business development, Bajpai helped them set up a partner program and build relationships in the UK and the US. “I reported directly to the CEO, so I learned a lot about the start up environment in India,” he remarks.

“I had a lot to learn, because this was the first time I had been in a sales role.

Looking back, the best thing I could have done after earning my MBA was to join a small, growing company.”

Before joining FinalQuadrant, Bajpai spent a week after his graduation in Nice, France, where Amadeus is located. He had coffee with a couple of his former colleagues and they thought about what they might be able to do in India that would build upon their skill sets. They thought about an online travel agency; an inbound or outbound tour company; a GDS (computer system for searching, reserving and purchasing travel products); or a travel search site. At that time, Kayak, which had started in the United States in late 2004, had gained remarkable traction and had grown 12-fold in a year by providing travel meta-search, which allows users to search for travel deals across multiple sites with a single query. “I talked to a couple of people at Amadeus and we agreed that if this model worked in the US, it should work better in India, because the Indian market for travel is more fragmented,” Bajpai recalls.

iXiGO emerges By 2006, it seemed clear to Bajpai that the time was right for someone to start India’s premier meta-search com-

“The isango experience taught us a lot about finding tech resources, building product teams in India and scaling up from three to twenty in a short time.” pany. “By the end of 2005, 12 airlines were operating in India,” he explains.

“Makemytrip.com had survived the dotcom bust by operating at a low scale in the US and had re-entered India in 2005. There was news that a Harvard alum was starting an online travel agency named Travelguru and another INSEAD alumnus was getting investment for a travel portal called Yatra.

With more carriers, agencies and fragmentation, the right ingredients were in place for a meta-search engine aimed at helping consumers find the best deals.”

In February, 2006, Bajpai left his position at FinalQuadrant to start a new company called Travenues, later renamed iXiGO. The new venture’s assets were an apartment in Gurgaon, three computers and a business plan consisting of ten PowerPoint slides. Two good friends from Amadeus joined a

“I had a lot to learn, because this was the first time I had been in a sales role. Looking back, the best thing I could have done after earning my MBA was to join a small, growing company.”

few months later and moved into the apartment. Jens Schütter, a German, became Product Head while Rajnish Kumar, also from IIT Kanpur, became CTO, with Bajpai serving as CEO. “For eight months, we woke up, brushed our teeth, sat at our computers all day, turned out the lights, went to sleep, and then did it all again the next day,” Bajpai reminisces. A few months later, a fellow INSEAD MBA, Dharmendra Yashovardhan, joined as COO, focusing on building partnerships. They hired one administrative/HR person and one developer in October 2006, and took out a lease on a very small office around the same time. To generate some cash during 2006, the founders also did product consulting and team building for another INSEAD alumni-led online travel venture, isango.com, an activities aggregator.

“The isango experience taught us a lot about finding tech resources, building product teams in India and scaling up from three to twenty in a short time,” Bajpai remarks.

The startup received a boost from a newly launched pan-India event called proto.in. A community of volunteers started this event to showcase Indian technologists who could demonstrate innovative prototypes to communicate their creative potential. iXiGO’s founders were invited to demonstrate their evolving meta-search product at the very first edition of proto.in in January 2007. Five months later, on June 3, 2007, iXiGO’s website went live.

The company’s founders relied on focus to help them succeed against fare search engines from Yahoo and Rediff.com. “A travel portal is very different from a travel vertical of a horizontal site and you always get a lot of pushback from advertisers if you don’t have a clear focus,” Bajpai explains. Compared to a travel agency, iXiGO’s competitive advantage lay in transparency. “You can search across all airlines in India and complete your transaction directly on the airline’s site,” Bajpai elaborates. “Travel agency sites move airlines up or down on their list based on relationships and they MAY 2009 23

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“Our value proposition lay in providing a transparent travel search engine that filters out the bait-and-switch 99 rupee fares so you know the total fare up front and can complete the transaction on an airline’s site.”

case/INSEAD charge booking fees on every transaction.” The founders considered working with online travel agencies, but their margins were too thin and the airlines wanted to work directly with iXiGO. “We positioned ourselves as a direct search engine for airlines only and discovered later that increased the value of our platform for airlines, because they wanted to reduce distribution costs by lowering their dependence on travel agencies,” Bajpai says.

“Our value proposition lay in providing a transparent travel search engine that filters out the bait-and-switch 99 rupee fares so you know the total fare up front and can complete the transaction on an airline’s site.” He continues, “We are also unique in our ability to

let you search routes that do not have direct flights by computing the route for you—we learned how to do that at Amadeus. If you sit in Patna and want to fly to London, we can connect you via Delhi, Dubai, or whatever it takes, because we have algorithms that show you how to get from A to B given constraints like duration and budget.”

At the time iXiGO’s meta-search engine launched, it had no advertisements. “We wanted a very clean, fast, and efficient product, so we decided to introduce ads only after we got critical mass,” Bajpai says. The site grew strictly through word-of-mouth. For the first six months, all the revenues came from airlines who paid iXiGO for leads or for completed bookings from a lead generated by the site. By March 2008, half of India’s airlines had signed up with iXiGO and most of the remaining joined by the end of the year. “You have to launch a product showcase, show you can build the right kind of quality of traffic and then you can sign commercial partners,” Bajpai comments. “We started building relationships with airlines before our launch, but we discovered that these things take more time in India than they do in other geographies, because face-toface time is important.”

After six months, the site began to include advertisements. “Even though we had a small number of eyeballs, some advertisers were interested in our audience, because it was very focused,” Bajpai notes. “Travel was the only thing in e-commerce that was really working and our visitors were all serious buyers who had credit cards.

They had a willingness to pay and an ability to consume, so we secured premium advertising rates within six months of our launch.”

Growing the business During 2008, the iXiGO team grew from eight to twenty people. iXiGO also won several recognitions, including a spot on the NASSCOM list of 100 most innovative companies in India. The partners were pleasantly surprised to find that a startup could hire world-class talent—including engineers from IIT 24

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case/INSEAD with several years of experience—who could generate a world-class product. Revenues grew five fold in a year, although Bajpai kept his marketing spending low. As a result, the enterprise scaled more slowly than it could have, because the founders were committed only to spending dollars they were generating. The site did diversify by adding all Indian hotels in April 2008 and adding bus transportation in September 2008. In October 2008, it added international hotels. “We search for the global hotel booking sites for hotels anywhere in the world,” Bajpai says. “For many Asian and European geographies, we include a lot more hotels, including both budget hotels and four or five star hotels, than our closest competitor Kayak does.”

Although it is legal for a metasearch engine to find and re-use anything publicly available on a website without attribution, iXiGO preferred to seek permission where possible.

“We are a small company and we didn’t want litigation, so we told everyone what we were doing and asked them to let us know if they had a problem with it,” Bajpai relates. “What we do is beneficial for airlines, hotels and bus operators, so most of the time they see the value we are providing and in fact want to give us incentives to help them secure more bookings.” Investing in relationships instead of spending by advertising has created an imitation barrier, Bajpai believes. “We have built relationships on the ground that are difficult to replicate,” he says. “When an airline is toying with a new e-commerce initiative, we are the ones they call for idea validation because they see us as a partner who works to benefit their own booking engine. Getting to that position is hard, but we have done it, because we have worked with the airlines to help them grow their direct bookings while they are trying to move to paying zero commissions to online and offline travel agencies.”

One area in which iXiGO has benefited online travel sellers is social media. “Because our strategy depended on word-of-mouth, we learned early how to engage well with consumers online,”

“You don’t just use social media to spread the word; you use them to engage people. For example, suppose somebody uses Twitter to tweet that he found a great fare on iXiGO. If you reply to him, thank him and tell him to check out another useful feature, you put the relationship on a personal level. You stay engaged with customers and can get the best feedback from them.”

Bajpai comments. “You don’t just use social media to spread the word; you use them to engage people. For example, suppose somebody uses Twitter to tweet that he found a great fare on iXiGO. If you reply to him, thank him and tell him to check out another useful feature, you put the relationship on a personal level. You stay engaged with customers and can get the best feedback from them. They look at you more as a friend than as a marketer and will discuss more with you than they would if they were clicking on your feedback link.” As a consequence, iXiGO can help its travel partners run promotion campaigns across social media when they introduce new schemes.

IXiGO continually improved the functionality of its site. For example, it was one of the first travel metasearch sites in Asia available on mobile phones for every form factor. The application displays pictures, maps and descriptions for hotels with links to call

centers. “We look at problems from the consumer’s perspective to see where they need more biased comparison information to overcome fragmentation,” Bajpai relates. “We also worked to provide usability tools that people want. For example, most sites will not be able to show you hotels within 2 kilometers of a destination, such as Connaught Place in Delhi. We can give you a list and show you those hotels on a map. We also pull in reviews from all major review sites; you simply click a link to read reviews. We put in a huge amount of work to ensure that iXiGO remains the most usable product in the travel category.”

In late 2008, iXiGO started aggressively to sign up distribution partners to power travel searches on other prime Internet properties in India.

NDTV, a large media house, chose iXiGO over bigger competitors to build their travel vertical. Soon after, in a landmark move, TravelGuru, a large online travel agency, gave up its agent model and moved to meta-search with iXiGO’s engine, a move that signaled the clout of the meta-search model as a customer and supplier value proposition. Overall, more than 20 such partners were signed up by Spring 2009.

By May 2009, iXiGO was growing rapidly and was bound to reach a cash-flow breakeven point in summer.

The key issue facing Aloke Bajpai and his partners was how to scale the business. Two key choices faced the entrepreneurs. First, should they continue to grow organically without spending too much on marketing and branding, or should they raise capital in order to invest much more and grow faster?

Second, should iXiGO retain its focus on travel in India, or should it invest to expand its international presence?

Says Bajpai, “We are launching new products that can be global in nature, so one key decision is whether to retain a strongly Indian identity. A startup has to choose whether to be perceived as an Indian travel search engine with global ambitions, or as a true global player.”

WHERE SHOULD iXiGO GO NEXT? CONTD. ON PG 56 ç MAY 2009 25

INNOVATION

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nything can spark off an idea; all it needs is a sharp mind to catch it. Such was the case with Kranthi Vistakula, who in 2004, while studying at the Massachusetts Institute of Technology (MIT), developed a prototype of weather-sensitive clothing. The idea was borne out of a “personal problem” with the cold weather in the US. He had to wear multiple layers of clothing while going to college. Once inside the class, he had to remove it, only to wear it again when going out on short breaks. So he thought, “Why can’t there be a garment that can be air-conditioned?”

And that got him thinking on developing a technology that when fitted to clothes could help regulate temperature depending on the weather outside.

Climate

ClimaGear range of jackets are light weight (1.4 kg), quite, easy to use, fashionable and have easily rechargeable batteries

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The initial response from his friends was that of disbelief. However, Vistakula was undeterred and in 2005 bagged a US$ 5,000 prize at MIT to develop the first prototype of a weather-sensitive jacket. While it was an “ugly piece of clothing,” with tapes here and wires there, the idea in itself was very well received. This led him to further improve on his dream product. The second and third prototypes went on to win him more money and accolades during the various competitions he showcased it.

By the end of 2007 he was convinced that commercial production of this product would make good business sense and in 2008 he registered his company, Dhama Apparel. Since then he has been operating from the incubator at the National Institute of Design (NID), but will soon have a shared facility with a major manufacturer for large-scale production of his product line that also includes neck accessories and headgear.

INNOVATION The innovation Vistakula has chosen Climagear as the name for his range of jackets; Climaneck as the name for his neck accessories; and Climamet for his helmet and headgear range. The jacket can heat or cool the user depending on the requirement. It weighs 1.4 kg and uses the concept of thermoelectric effect. “There are conductor chips that work on the Peltier Effect. I have developed a novel combination of different technologies,” he says. “It can work anywhere up to 50ºC, maintain a 10 to 20ºC temperature differential, is lightweight, easy to use, and remove 100 watts of heat from your body, thus increasing your productivity.”

The jackets use laptop batteries (lithium polymer) and wires. The sin-

DARE.CO.IN should be in soon. So impressive was his innovation that Vistakula received an initial grant of approximately Rs 13 lakh under the Central Government’s Technopreneur Promotion Program (TePP). His second grant of Rs 45 lakh will reach him soon. These and many more recognitions have provided a further boost to the morale of his team.

Market and strategy Vistakula’s products are expected to hit the market soon. While the retail route may be a distant future, institutional customers are first on the radar. The market potential for these products is indeed huge, both in the manufacturing and defense sectors. “Pricing models have yet to be worked upon. Commercial pro-

This innovative piece of clothing and headgear can make life easier for those exposed to adverse climatic conditions

Control Apparel /Vimarsh Bajpai gle recharge of the batteries could last up to eight hours. Rubber has been used to give aesthetic value to this product. The Climagear range could be extremely helpful for military personnel, outdoor workers, sports enthusiasts and those who spend long hours in adverse climatic conditions.

Sinilarly, the neck accessories are also battery powered and weigh 140 gm. While it takes a month to get a single jacket ready, if manufactured on a large-scale, 15 to 20 can be made each day.

This innovation has a worldwide patent. Vistakula has applied for an additional patent that

duction of this is yet to begin,” says Vistakua. “Right now we are working with institutional customers. Welders, army, construction workers, etc.”

His company may tie up with leading

sports brands to market the helmets and neck scarves.

The idea may have had only a few takers earlier, but such is not the case now. Dhama is now in talks with a VC firm to acquire funds for expansion.

For this, Vistakula will have to sell stakes in his company, but it would also mean large-scale commercial production. Instead of developing his own facility, Dhama may go in for a shared arrangement with an Indian manufacturing giant.

Challenges Asked about challenges, Vistakula speaks of the experience of a true entrepreneur, “As a product development company, it takes a long period of time because a lot of research goes into it.

So you have to accept some things— no income and no revenue. Besides, social pressure is huge because people in India do not understand the concept of entrepreneurship.”

Because he was from MIT, people took his idea more seriously, but it was still shot down a few times. As he had a prototype ready, it was easier to make a pitch to investors.

However, Vistakula believes that investors in idea put more trust in startups in the services sector than products. “In India, it seems VC firms, etc prefer service sector companies over product companies. If I do a website, I may have a bigger chance DAR E of getting funded,” he says.

Fact Sheet Innovator

Kranthi Vistakula

Innovation

Climate control apparel

Technology & material

Peltier Effect (thermoelectric effect); laptop batteries, wires, peltier chips, cloth, rubber etc

Product range

Jackets, neck wear, helmets

Weight (jacket)

1.4 kg

Advantages

Lightweight Easy to use Maintain at 20-40ºC Fashionable

Price

To be decided MAY 2009 27

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opportunity/hotel

10 Out-of-the-way

Hotel Concepts A good clean room with proper service â&#x20AC;&#x201D; that is the least one expects while staying in a hotel.

But there are some unusual ones that go beyond oneâ&#x20AC;&#x2122;s expectations and compel you to travel just to stay there 28

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/Ambrish Jha

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ver wondered why you like to stay in some hotels more than others? Probably the ambience in a particular case, the services it offers, the views, or perhaps its very theme. A hotel in Kerala, for example, may be popular for its wellness programs, while one in Rajasthan for its heritage value. Various creative ideas of people across the world have translated into a range of unique hotels.

These have created niche market for themselves and resulted in imitations in other parts of the world born from appreciation and admiration. Over the next few pages we explore some of these unique ideas.

Hotels in jails Some jails are not reserved for criminals; rather, you will have to pay, and in some cases quite a lot, to experience these jails. Hotels in jails may sound bizarre, but this has been turned into reality at quite a few places. The Jail at Mount Gambier in South Australia is one such example. This hotel is meant primarily for people wanting to stay on a low budget. Rooms are available at as low as US$ 22. France has an ambitious program to raise 44 billion Euros by selling off nine jails to private hotel chains.

Britainâ&#x20AC;&#x2122;s oldest jail in Oxford has been converted into a boutique hotel

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opportunity/hotel be compromised and that it will be kept open for public viewing. There are various other jails falling apart in the name of preserving historical monuments. Perhaps a leaf out of Mount Gambier’s The Jail or Malmaison in Oxford will prove more handy on this front.

ICEHOTEL in Jukkasjarvi, Sweden

Photo: Big Ben Productions

Tree-house hotels

by the Malmaison hotel chain. The most famous of the jail hotels, however, is the Four Seasons Istanbul. This luxury hotel started in 1996 at a venue that was known as Sultanahmet Jail till 1969 and was used for detaining writers, journalists, artists and dissident intellectuals. Initially, the Four Seasons played down the infamous history of the place, but they soon realized that the murky past was rather good for business. Liberty Hotel in Boston also has 18 of its rooms built in what was once a prison.

Can such hotels be built in India?

Cellular Jail, which is in shambles, can probably still be saved from complete ruin if sold to a hotel chain with the rider that its historicity will not

Tribals have used tree houses for ages, but of late these have emerged in the form of hotels in different parts of the world, as luxury for some and as ecofriendly for some others. Germany, South Africa, USA, Vietnam and also India boast tree house hotels. For various reasons tree-houses have caught the fancy of travelers. In India, one can find these type of hotels at quite a few places, particularly in the vicinity of jungles. This is more popular in the south Indian states of Tamil Nadu and Kerala where tree resorts like Green Magic Tree House Resort (Vythiri), Carmelia Haven Resort (Idukki), Tranquil Tree House Resort (Wynad), B-six Holiday Resort, and Safari Land Farm are in operation. Usually these tree resorts have regular kinds of rooms as well.

The exteriors of these tree houses have a primitive look, but they are well-equipped with modern facilities such as electricity, telephones, television, running water and Western-style attached bathrooms. Rooms are furnished with bamboo beds, colorful sheets, blankets, carpets and a verandah is usually present. Prices range from Rs 4000 to 11,000 per night, depending on the facilities available. In a resort in Panna, Madhya Pradesh, for instance, a tree house costs nothing less than Rs 10,000 a night during peak tourist season.

Setting up tree house hotels translate into an investment of Rs 15 to 20 lakh. (See the July 2008 issue of DARE, or visit http://www.dare.co.in/opportunities/services/mainstreamingtree-house-resorts.htm.)

In caves Certain prehistoric dwellings, mines and caves have been converted into hotels in various parts of the world.

The UK-based newspaper Independent has, in fact, made a list of five best cave hotels in the world. They include: Les Hautes Roches, Rochecorbon, France; Cappadocia Cave Suites, Turkey; The Caves, Jamaica; Alexander’s Santorini, Greece; and the Desert Cave Hotel, Australia.

In the Jamaica-based The Caves, there aren’t any rooms built in the caves, as Monique Griffiths, Executive Assistant Manager, explains. She says, “The caves are actually below the hotel and we have special dining areas and a bar that are in the caves. The caves are natural; we have only developed the areas to make them more comfortable for use.”

However, Cappadocia Cave Suites claims on its website that all its rooms incorporate original cave structures, cave bedrock, unique lighting, antiques and local handicrafts. Restoration works are ongoing and expected to finish later this year. Once completed, the hotel will have 38 suites. Desert Cave Hotel, on the other hand, has 19 underground suites to give people the experience of living in what used to be mines at one time.

India has also many abandoned caves in the Deccan and Malwa plateaus, the Vindhyas, and the Aravalis.

It remains to be seen if anyone is up to the challenge of constructing similar hotels, yet taking care not to disturb their historical significance.

Aircraft as hotel One of the latest hotel ideas to have hit the world, an aircraft hotel, is now operational in Stockholm. An abandoned Boeing 747 jet has been converted into a 25-room hotel at Arlanda Airport in the Swedish capital. This is a basic hotel, devoid of luxuries. It offers a 65 square feet room with a built-in platform bed, overhead luggage space, and a flat-screen television. Showers and toilets are shared, just as in any operational aircraft. There is, however, a reception to welcome guests and a cafe to serve food and beverages. This unique hotel has a conference room on the aircraft’s upper deck and a wedding suite in the cockpit.

MAY 2009 29

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opportunity/hotel

An aircraft hotel in Waitomo, New Zealand

A 1950 Bristol Freighter, one of the last planes used by the Allied forces in Vietnam, has been fully refurbished into a two-unit hotel, rater motel, in Waitomo, New Zealand. Barry Woods, owner and designer of this hotel, says one of the two units, in the cockpit, can sleep up to four people.

“It has a double bed and a sofa that pulls out to a large single bed,” he says.

“It has a double mattress on the floor, and this is more suitable for kids as it has a very low ceiling. Children need to be over seven years old to climb a ladder to the cockpit safely. This unit has very little floor space.”

The tail unit of the plane can also sleep up to four people as it has a double bed and a set of bunks. A double bedroom is separated from the main area by a curtain. Bunks being slightly narrower than normal ones are more suitable for children, Woods says, though “Adults also do not mind sleeping in this,” he adds.

Underwater hotels Watching fish and other aquatic organisms in aquariums can be fascinating. But imagine what the view would be like from inside. An underwater hotel provides just that. Though very few such hotels exist currently, a few others are under construction.

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The world’s first underwater hotel, the Jules’ Undersea Lodge, Florida, became operational in 1986. The entrance to the hotel is 21 feet below water level, and knowledge of scuba diving is a must to stay here. However, a crash course is available for newbies from the trainers employed by the hotel. Once inside, you can not only enjoy watching the marine life from your 42-inch window, but you can have other luxuries like air-conditioning, hot showers and DVD players.

Similar hotels are coming up in Fiji, Dubai and Turkey as well. The one in Dubai is called Hydropolis and is expected to be functional by the end of this year. With a project cost, estimated at US $550 million, as reported by newspapers in the Gulf, the hotel will be a big one with as many as 220 rooms built at 66 feet below the surface. It will be different from the Jules’ Lodge in the design as the rooms are to be connected to the ground through a transparent train tunnel.

The Fiji project, called Poseidon Undersea Resort, was expected to have been functional by 2008, but has been delayed and is expected to start operations in 2010. Maximum occupancy at this five-star undersea resort at a depth of 40 feet from the surface is 144. Rooms rents are expected to be

around US $1500 a night, and the entire hotel can be booked for six nights, seven days for US $3 million.

The Istanbul underwater hotel will probably also be operational by 2010 as well. There are plans to build underwater hotels in places like London, New York, Munich, and Monaco. Obviously not all would be under the sea; some will be under the surface of river or lake. An underwater hotel in a lake called the Utter Inn has been operational in Vasteras, Sweden, since 2000.

In this one-room inn guests can sleep 9 feet below the surface at 1 km from the banks.

With a number of rivers and lakes, and a huge coastline in India, opportunities for such hotels seem immense.

It is just a matter of time before some one takes the plunge.

Floating hotels Cruises are quite commonplace, but a floating hotel? This refers to a structure built on water with the sole purpose of floating and not transportation.

Such hotels can be seen at quite a few places around the world. India also has one, the Floatel, located on the Hooghly river in Kolkata. It is a fourstar hotel with 46 guest rooms, and it advertises itself as an eco-friendly establishment (see Box).

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opportunity/hotel

Floatel, a floating hotel in Kolkata How did you conceive the idea of the Floatel?

The idea is mine, as I have experience in the shipping industry and offshore oil exploration. I picked up from the offshore oil industry, which exploits oil resources in the high sea. I designed this hotel based on a technical idea and my educational background in naval architecture. I designed it to fit for a location on the river Hooghly. I got it built in Santosh shipyard in Singapore and towed to the present location.

What were the difficulties you faced while starting the hotel?

Being a totally new concept, I faced immense difficulties in getting clearances and licenses. There were lots of questions raised under the existing acts and statues.

It took eight long years to get clearances.

I conceived this idea in 1994 and the first trial run could begin only in November 2006. While starting a pioneering project one must be ready to face a long gestation period. We had to seek clearances from both the state government and the central government over various issues. One must have patience and financial strength for this kind of project.

What was the total investment?

With the total time and cost overrun, and everything included, total investment came to about Rs 26 crore.

Did you buy the ship on which hotel is built?

A floating hotel cannot be made on an existing ship. A unique configuration

above the waterline is required for building floating structures, be it a hotel or a shopping mall or a hospital. The bottom of the craft can be same for all structures, but above-the-waterline configurations depend on what the craft is going to be used for. The design has to be fitted with this configuration.

How many rooms does Floatel have?

What are their tariffs?

We have 52 rooms altogether, including three large suites and nine banqueting areas, which can accommodate about 2,200 persons. We have a dedicated bar and a restaurant with a capacity of 150. Our rack rate starts at Rs 7,000, and luxury suites go up to Rs 30,000.

Occupancy rate before the slowdown came was about 80%.

Manab Pal, MD, Floatel

“Being a pioneer is difficult”

Have you been affected by the slowdown?

Almost 99% of our customers are from outside Kolkata. More than 30% are from foreign countries. Overall, more than 80% of our business comes from corporate sector. Most businesses are affected by the slowdown.

MAY 2009 31

DARE.CO.IN Hotel in plantations and orchards Hotels in the natural setting of tea or coffee plantations or in orchards are gaining popularity, though such properties remain scarce. Major teagrowing countries like India and Sri Lanka have hotel cottages built amidst tea plantations. Some of the most renowned tea estate hotels include Makaibari and Glenburn, both in Darjeeling. Coffee tourism is also gaining popularity in the coffee-producing south Indian states, with plantations opening up their idle bungalows for tourists. These properties not only offer eco-friendly and pleasing environment to stay, but enlighten tourists about the fascinating processes of tea and coffee making.

Orchard hotels are not large in number either, but they do attract people wanting the experience of staying in natural settings. There are a few heritage hotels built in mango orchards in Rajasthan. Corbett has a hotel built in a mango orchard. Welcome Group manages such a property in Jodhpur and offers luxurious suites.

Hotels built in apple orchards at places like Manali in Himachal Pradesh have also started attracting tourists. Devlok Hotel, Manali, for instance, offers cottages on weekly, monthly and yearly basis to business travelers. It also offers rooms for economy class tourists from where they can have a view of apple orchards and pine forests.

opportunity/hotel of the temperature outside. Ice hotels not only have rooms made out of snow and ice, they have provision for warm accommodation as well. After a stay of one night in the cold, you are encouraged to stay one or two nights in a warm room. Warm rooms are like normal hotel rooms built alongside cold ice rooms. Cold accommodation in IceHotel is available on a tariff of anything between US $145 and 785 per person on a twin-sharing basis. Warm accommodation, in contrast, is much cheaper, between US $163 and 205 per person on a twin-sharing basis.

Is it possible to build such hotels in India in regions that remain under snow for more than five months a year?

Possibly in regions north of Badrinath in Uttarakhand and north of Rohtang Pass in Himachal Pradesh.

Hotel in a drainpipe Odd though it may sound, there is indeed a hotel inside drainpipes in Austria. Called Dasparkhotel, it is situated on the banks of the river Danube in Ottensheim. It operates on a unique “pay as you wish” scheme, whereby guests are given the opportunity to decide how much they want to pay for their stay. Amenities are quite basic—a custom-made mattress, circular electronic door and a lamp. The hotel was started by an art student called Andreas Strauss with the aim of pro-

Ice hotels Ice hotels are quite unique in the very sense that they are temporary hotels made entirely of snow and ice blocks.

They are, as the very name suggests, seen in the vicinity of the Arctic Circle.

These are seen in winters in countries like Norway, Sweden, Canada and Finland. According to Wikipedia, the first ice hotel, called IceHotel, was at Kiruna in Sweden. A hotel is created every year with ice artists working on the ice blocks to create all sorts of sculptures.

Even beds and glasses used by guests are made of ice. According to the information on the website of IceHotel the temperature inside the hotel is never less than -5°C to -8°C, regardless 32

MAY 2009

ICE CHURCH 2007 by artists Cindy Berg, Marjolein Vonk, Jan Willem van der Schoot & Marinus Vroom. Photo Big Ben Productions

viding eco-friendly, yet economically feasible, facility for passing travelers.

While starting such a hotel in India can be easy, it remains to be seen how many people will opt to to stay in such accommodation!

Gallery hotels There is a unusual hotel property in Berlin, Germany, called Propeller Island City Lodge, which is more like an art gallery than a hotel. The rooms are also not numbered, but have names like Flying Bed, Grandma’s, Padded Cell, Glass House, Freedom, Forest, Landscapes, Electric Wallpapers and Upside Down. There are altogether 31 rooms in the hotel, each with a rent of 79 to 115 Euros. Each room has its own special features. For instance, Grandma’s has its bathroom hidden in the wardrobe, and the items in the room are very old. The room called Space Cube, on the other hand, gives two persons the option to decide whether to sleep on the same bed or in separate beds. Depending on the decision, you can crank the illuminated barrier between the bed halves up or down.

The most “normal” room in the hotel is the Electric Wallpaper. The hotel has its own gallery with lots of graphic and art works, where you can see and buy furniture and art created by Lars Stroschen, the person who took five years to create this artistic hotel.

Helga’s Folly is another artistic boutique hotel situated in Kandy, Sri Lanka. The walls of the hotel are decorated with murals, framed photos, newspaper clippings, huge mirrors and various other articles. Helga, who owns the hotel, calls the property “anthotel”, has impressed her visitors so much so that one of her British guests composed a song in her honor and interestingly the song was on top of the charts in 2003. Room tariff ranges between US $145 and 240 a night.

There is a hotel in Pondicherry managed by Neemrana Hotels with rooms having names, but they are not galleries of an artistic value. Perhaps, some day an Indian artist’s inspiration too will translate into a hotel like HelDAR E ga’s or Lars Stroschen’s.

INNOVATION

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A Low-cost Incense Stick Maker More efficient than the existing manual bamboo splint-making devices, this innovation is portable, inexpensive and easy to operate /Aswathi Muralidharan

“H

ow many people have you heard about who have made it big by selling bamboo products? I guess none, because bamboo is a means of earning livelihood for the poor and not for the rich,” says 55-year-old innovator Usman Shekhani of Chhattisgarh. Deeply moved by the plight of a poor bamboo craftsman, the serial innovator created a unique manual bamboo splint-making device for incense sticks that won him a national award in 2005.

The demand for incense sticks in India is huge not only in the domestic market, but also internationally. However, the major part of the market is dominated by unorganized small-scale players, who still use traditional manufacturing methods. The splints device made by Shekhani could as well be a boon for them. According to the inventor, this device is inexpensive and pro-

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Agarbatti Industry: Exports Year

Exports Growth rate (million tons) (%)

2005-6

2,056

22.00

2006-7

2,924

17.00

2007-8

3,509

20.00

SOURCE: Gujarat Agarbatti Manufacturers and Dealers Association

duces better quality sticks than those made manually. Moreover, being handdriven, the machine is easy to operate and repair and can be used even in remote areas that have power shortages.

manufactured by a company in Bhopal for around Rs 70,000 to 80,000,” he says.

“Most of the incense sticks are produced in Assam and Tripura.

As our region also produces a lot of bamboo, I thought why can’t we manufacture incense sticks here, which will also be a solution to the existing unemployment and poverty.”

With this, the innovator set out to Bhopal and when he approached the incense stick-making company, he was given the address of a bamboo craftsman, Gulab Rao, in whose premises one such machine was installed.

“When I visited the place I was appalled to see the condition of Gulab Rao,” says Shekhani. “He had taken a bank loan to buy the machine, and took me for a bank executive.” To Shekhani’s surprise, he found the machine in one corner of the room covered with rubbish. “The machine had broken down within 15 days and because of the loan that he had taken to purchase the machine, he was immersed in deep debt.” Moved by the plight of Gulab Rao, Shekhani decided to create a machine that was hand-driven and affordable for the poor.

The genesis The idea came about when a friend of Shekhani’s asked him to find out more about an incense stick making machine that was advertised in a local daily.

“The power-driven machine was being

How it works In 2001, two years after the idea was conceived, Shekhani was successful in producing the first prototype. The device was first tested in Raipur, but

INNOVATION

DARE.CO.IN proximately 5 kg of ice-cream sticks.”

In a day, a bamboo worker can easily produce 5 kg incense sticks.

Cost involved

Fact Sheet Innovator

Usman Shekhani

Innovation

Bamboo splint-making device for incense sticks

Material of construction

Wood and carbon steel

Dimensions

4” x 2” x 3” (splint maker)

Weight

100 gm (splint maker)

Output per day

5 kg of splints for incense sticks

Advantages

More efficient than existing manual devices Easy to operate and repair Hand-driven, hence can be used by anyone, anywhere

Cost

Single pack: Rs. 550, Family pack: Rs 750

it did not meet with much success.

He says, “At first I had only the handy cutter device. So the bamboo had to be first sliced into chips using a knife and then fed into the machine. However, people found the slicing part to be too time consuming. This was when I decided to create another simple device for slicing the bamboo into chips.” Six versions and several combinations later, he was ready with an innovative low-cost handy cutter device that was portable, hand-driven and simple to operate.

At present, the device consists of two parts—the bamboo slicer and the splint maker. The bamboo is first passed through a slicer that cuts the bamboo into thin strips. The strips are then fed into the cutter that cuts it into five equal pieces. The cutter consists of a wooden bracket, high-speed

steel blades, adjustable screws, and a spring-loaded pushing roller. Moreover, the device can also be set to make sticks of different diameters. According to the inventor, “In a minute it can make nearly 100 sticks.”

A bamboo stick, which is generally 5 to 6 m in length, has several knots. The knotted part, which is 20 to 22 cm long, cannot be used to make aggarbattis, and is therefore generally cut out and thrown away. According to Shekhani, “This part, instead of being wasted or burned, can be used to make thin icecream (gola, chuski, kulfi) sticks, buds, and toothpicks by traditionally cutting it using a knife. These sticks generally sell for Rs 10 per kg in the market.” He makes a rough calculation and says, “Therefore, if you have 10 kg of bamboo, then you can easily make 4.5 kg of splints for incense sticks and ap-

The product is available in two packs and is priced quite nominally. The single pack, which consists of one single stick cutter, costs Rs 550, and the family pack, which consists of two stick cutters, is for Rs 750. Shekhani says, “With a meager amount of Rs 1,000, a family can start using this machine.

The investment would include the cost of the device and the bamboo required for making the stick.” The innovator also trains and gives demonstrations to people who want to use the machine.

Shekhani continues, “I do not tell people that by investing in my machine you will make big profits, but all that I can guarantee is that it will make them self-sufficient. As this is a manual device rather than an electrical one, we haven’t made it big and cumbersome.

Moreover, electric devices, which cost around Rs 1 to 1.5 lakh, have not been very successful.” He goes on to add that people who wanted to set up a small unit with his device have now bought several more and started off successfully. Till date Shekhani has managed to sell more than 3,000 units of his device.

Current status and future plans Usman Shekhani received a patent for the product in 2005 with help from the National Innovation Foundation (NIF). The foundation also helped him with a funding of Rs 45,000. With the aid of the NIF and local NGOs, he has managd to sell his products in 10 states, including Bihar, Jharkhand, Uttar Pradesh, Maharashtra, Orissa, Uttranchal and Madhya Pradesh.

Discussing the future, he says, “I plan to set up small agencies in several states to facilitate my work, because I have not found any substantial support in the form of commercial centers.” Besides, he is also working on an advanced bamboo splint-making device that can be used for producing DAR E sticks at a commercial level.

MAY 2009 35

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Why loans for women entrepreneurs are not taking off W

Almost all public sector banks have special loan schemes for women entrepreneurs. But low awareness and a passive mindset ensure that there are very few takers /Aswathi Muralidharan 36

MAY 2009

hen Neeta Kumar, a 41-year-old entrepreneur from Lucknow, decided to set up an artificial village in the outskirts of the city, it took her a year-and-ahalf to manage funds for her project. While running from pillar to post with her project report in tow, Kumar had a hard time convincing bank officials that Kala Gaon, her dream venture, would be a viable business proposition and that she would not default on her loan. During the course of her struggle for funding she even bumped into people who asked her to set up a shopping mall instead of a marketplace for artisans. Her ordeal finally came to an end in the spring of 2006 when she threw open the gates of Kala Gaon supported by a Rs 60 lakh loan from Punjab National Bank. Today, the theme village is a major tourist attraction in Lucknow and has given a platform to several rural artisans and sculptors.

Kumar’s story is quite common in a country where women are still hesitant to don the entrepreneur’s hat. Take the case of Kavita Singhal, a jewelery designer. “I belong to a family that has been in jewelery designing for years. Though my family was supportive of my decision to enter this trade, I needed funds to start my own venture,” she says. Singhal initially found it difficult to convince banks that she would be able to market her products and run a profitable venture.

Eventually, she managed to convince Canara Bank, where she has had a savings bank account for many years, to grant her a loan of Rs 1 lakh. Today, she manages to sell jewelery worth Rs 30,000 to 35,000 per month through her own outlet that she plans to expand in the near future.

Almost all public sector banks run special schemes to fund women entrepreneurs; yet it proves to be difficult for women to acquire loans easily. This is partly because of the mindset of bank officials who believe that women will have to run that extra mile to market their products, making it hard to make decent sales. Low awareness about these schemes is another reason for their slow uptake. In this article, DARE gives an overview of the various schemes offered by nationalized banks, challenges that women entre-

DARE.CO.IN

funding/loans preneurs face when it comes to avail funding and tips on how to make the going easy.

The DNA of a woman entrepreneur DARE spoke to a number of women entrepreneurs during the course of research on this story and found that there is a common thread linking most, if not all, of them. A typical woman entrepreneur belongs to two broad categories — she is either from a financially secure background and is willing to take risks with her own venture or she is from an economically weaker background and wants to start an enterprise to sustain her family. Ganesh Prabhu, a professor at the Indian Institute of Management Bangalore, corroborates the point and says, “Most of the women who come to women entrepreneurship workshops are either from well-to-do-families, who think the risk is worth taking or those who belong to the lower-income group and are interested in starting a business for survival.”

Women, typically, take up their hobbies as a business, especially when starting their enterprise singlehandedly. They generally get into businesses that interest them. This is evident from the fact that most women prefer starting home-based businesses from toy making and fashion designing to creating computer software.

According to Prof. Prabhu, “A woman entrepreneur will typically not think that since more people are doing a particular business and earning significant profits out of it they should enter the arena. Profit and size seems to be of less importance and satisfaction of doing it is of more importance to them.” He adds, “This is good in a way because this helps them to learn the basics well before they take bigger risks and invest high.”

Bank funding: Schemes and advantages Several nationalized banks in India have special schemes for promoting entrepreneurship, especially enterprises owned by women. For a woman to benefit under such a scheme, she should have a minimum of 50% owner-

ship in the comSome Schemes for Women Entrepreneurs pany. According to Prof. Prabhu, Bank of India Priyadarshini Yojana “When a woman Canara Bank CAN Mahila opts for the bank funding route, Central Bank of India Cent Kalyani the assessment is Dena Bank Dena Shakti made in the same Oriental Bank of Commerce Orient Mahila Vikas Yojana way as other loans, but the terms Punjab National Bank Mahila Udyam Nidhi Scheme and conditions are Punjab & Sind Bank Udyogini Scheme much favorable.

State Bank of India Stree Shakti Package Most of the nationalized banks State Bank of Mysore Stree Shakti in India have such SIDBI Mahila Udyam Nidhi schemes and also something called Tamilnad Mercantile Bank Mahalir as the single-window coordination facility wherein one have applied for, whether you have the department will handle all the linkages experience or not, what is your own contribution in this project etc. If we required for getting the loan.”

The schemes mostly give conces- find it viable then we go ahead with sion on interest rate of approximately the loan.” The concession in the inter0.25 to 1%, depending on the loan est rate is also extended to other conamount. The procedure for applying sumer loans. During the last financial is similar to other loans, the benefit of year, the Chandigarh branch of Bank such schemes being that a preference of India, disbursed approximately is given to women. For example, under Rs 81 lakh to women entrepreneurs in the Priyadarshini scheme of the Bank 37 accounts. of India (BoI), the concession on rate Similarly, Dena Bank under the of interest varies from 0.25% to 0.50% Dena Shakti scheme promotes women on retail banking that includes several entrepreneurship by funding a number loans like personal loans. According to of activities. Earlier, the scheme covVK Bansal, Chief Manager, Zonal Office, ered only the manufacturing sector, but BoI, “Applying under these schemes is now has been extended to agriculture similar to applying for other schemes. and allied activities, small enterprises, You have to submit an application micro and small (manufacturing and along with the details of your business. service) enterprises, retail trade, microThen it will be processed for informa- credit, education and housing. Dena tion such as what kind of business you Bank gives a concession of 0.25% on

Perceptions What women say

What banks say

Not aware of special schemes

Many women are usually silent partners, included just to get the benefit

A relief of just 0.25 to 1% in interest rate is not worth the trouble The process is too time consuming and requires far too many visits to the branch Often do not get what is promised

Skeptical whether women will be able to market their products and services; once convinced, do not hesitate to give loans Not many women come seeking loans for their startups Have special cells for helping entrepreneurs, especially women MAY 2009 37

DARE.CO.IN

funding/loans

“The bank liked my concept and was quick to offer a me a loan of Rs 3 lakh. The entire loan procedure took just about a little more than a week’s time and around five to six visits.”

— Vinnie Chaddha a beneficiary of the Dena Shakti scheme interest rate. As per the bank’s website, the loan ceiling is described as follows, “The maximum ceiling limits that can be considered for financing to women beneficiaries under this scheme will be as per the directives of RBI stipulated for various sectors under priority sector such as loans up to Rs 20 lakh under retail trade, Rs 20 lakh under education and housing and Rs 50,000 under micro credit as well as the bank’s specific schemes circulated to branches/offices from time to time.” Considering the fact that a bank has to disburse 5% of the previous year’s adjusted net bank credit (ANBC) to women under all schemes, Dena Bank has a target of approximately Rs 1,185 crore, according to a source.

Vinnie Chaddha of Reboot Shoe Laundry advocates the Dena Shakti scheme. She says, “I was a participant at the Business Baazigar reality show on Zee TV that was aired three years back. My idea was one of the favorites of a judge, so he introduced me to Dena Bank.” The bank, which was convinced of the idea, granted her a loan under the scheme. She says, “The bank was quick to offer a me a loan of Rs 3 lakh.

The entire loan procedure took just 38

MAY 2009

about a little more than a week’s time and around five to six visits.” On being quizzed whether “knowing somebody helped” to speed up things, she was quick to reply, “Funding depends on a number of things such as the loan amount, the concept etc. In my case, the loan amount was small, the concept was very fresh and I provided a guarantor for the loan amount.”

An added advantage is that some banks such as the State Bank of India (SBI) and Canara Bank have consulting cells for entrepreneurs. At Canara Bank, besides consulting, the cell also provides skill training, counseling and at times avenues for marketing their products as well. The counseling cells help provide a more realistic view of the business as they often give references of similar businesses and the issues they faced while starting up.

During the last financial year, the bank disbursed Rs 489 crore for women under various schemes in the Delhi circle, a bank source revealed.

Some loans also provide relief in terms of collateral security. Take for example, Oriental Bank of Commerce’s (OBC) Oriental Mahila Vikas Yojana.

Under the scheme, no collateral secu-

rity is required up to Rs 10 lakh and in the case of small-scale industries (SSI) no collateral security is required for up to Rs 25 lakh. The bank’s website states, “Only hypothecation of assets created out of the bank’s finance will be taken as security.” When contacted, a senior bank official said, OBC is one of the banks that have reached its target of disbursing 5% of the previous year’s ANBC. Besides, the bank is also actively engaged in providing microcredit by providing doorstep services to rural women.

Other nationalized banks with special schemes for women entrepreneurs are State Bank of India, Canara Bank and Punjab National Bank to name a few.

Challenges: A practical picture Though a number of credit schemes are available for women, there are several bottlenecks as well. The first major problem is that while there is a lot of discussion on empowering women and promoting women entrepreneurs, these bank schemes only provide a minor relief in terms of interest rate and at times on collateral. The other terms and conditions of the schemes are similar to consumer loans. Moreover, in practice there is a major gap between policy and practice. Besides the project report, the sanction of the loan also depends on a case-to-case basis on the entrepreneur and the bank officer she approaches.

The higher the loan amount, the more difficult it is to get loans. Uma Reddy, Founder President of Engineering Manufacturing Entrepreneurs Resource Group (EMERG) puts forward her theory and says, “One of the problems is that it may be easy for a bank official to give a larger loan to a man compared to smaller loans to a woman because many smaller loans mean more paperwork. A woman mostly starts on a small scale. So at that level, she faces difficulty while accessing loans. It again happens at the growth level, where a woman wants to expand and is in need of a loan. At that stage, they give you only 10% more of their previous year’s turnover. This is obviously not enough.”

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funding/loans Besides, there is a need to sensitize bank officials. Neeta Kumar of Kala Gaon says, “It took me more than one -and-a-half years to get a bank loan.

We faced a lot of problems as we were artists. A bank even said, why don’t you build malls instead?” To counter this, according to Uma Reddy, “There should be facilitation cells for women.

As such the scheme or the cell is not the idea, but the idea is to support and develop women entrepreneurs. This is really not happening now.” Reddy, who herself is an entrepreneur, says, “I had also approached [a bank] for a loan, but even with many years of experience in the field, I faced a lot of problems. The process of getting a loan is still not women-friendly, because you have to visit the bank multiple times.

This should be made easy.”

Some tips Research the various schemes available Before approaching a bank, one should be aware of the various schemes that banks offer. This helps in being more practical and knowing which schemes you are eligible for. According to Uma Reddy, “You should be very well equipped with the various schemes.

It prepares you to go to a official and demand to be funded under a scheme and benefit from it.”

Try to market your product first One of the major difficulties a woman faces is marketing. Even banks are very skeptical about this while extending loans. Prof. Prabhu says, “Before starting up, I would ideally advice women to first test their product in the local market. They can invest some money from their pockets and get a small amount of their product manufactured by a local manufacturer. They can then try selling their product in the market.

This helps in not only understanding the business better, but also when approaching the bank.”

Be thoroughly aware of your business plan Creating a business plan is of utmost importance. However, Uma Reddy explains that, “Many a times what happens is that they sit with consultants to

“The processes are too difficult. A lot of persistence is needed. As a country we are 102nd in setting up an enterprise and all these problems add to it.”

– Uma Reddy Founder President, EMERG make the project report. In that case, it is very important to know the details of financial documents very well such as what is your debt equity ratio, when will be your break even etc.” Prof. Prabhu corroborates the point and says, “Sometimes, what happens is that they go too early to the bank and when the banks ask questions they get scared.

Then, the banks might as well say, why should I give you loan when you even haven’t thought of this.”

but there can be many hidden things.”

She explains, “You might have taken a loan for, say, three years, but if your business does well and you want to pay the loan back, then there might be a pre-payment penalty that you may not have been aware of. Another thing is that often the interest rate is calculated at the end of the month, but if you have paid the loan on say the 5th of the month, then ideally the interest should be calculated for 25 days and not for 31 days.”

Read loan documents carefully You might have heard this statement many times, but ignored it. When going for a loan, it is extremely important to sit with the banker and understand all clauses and calculations.

Anjana Vivek, founder of VentureBean Consulting, says, “You have to think through all scenarios before getting into a loan agreement. People often only look at the interest rate number,

Join a women’s network This helps in keeping in touch with other women entrepreneurs who are already in the field. This also aids in learning from the experience of other women. Another added advantage is that at times it helps in networking with bank officials. There are a number of such organizations such as AWAKE, DAR E EMERG and FIWE. MAY 2009 39

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/INSEAD

15 reasons to tie up with TiE Learn the trade secrets of entrepreneurship from the reputed charter members, get connected to the VC investors, avail the platform to attend industry specific forums and be a part of result oriented networking—all at The Indus Entrepreneurs (TiE) network /Irawati Gowariker and Philip Anderson

I

n the early ‘90s, a handful of silicon-valley stalwarts pledged their time and resources to support the cause of budding entrepreneurs. This effort gave birth to the The Indus Entrepreneurs (TiE) network, which is today the world’s largest non-profit organization to foster entrepreneurship. Also known as Talent Ideas and Enterprise, TiE has 11,000 general members and 2,500 charter members that include top entrepreneurs, VCs, private equity,

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angel investors, law firms, technology and management professionals.

Pravin Gandhi, past president of TiE-Mumbai, crisply classifies TiE’s objectives under three ‘A’s—Awareness, Assistance and Advocacy. With an estimated US $200 billion in economic wealth creation, TiE’s sphere of influence pans across twelve countries through 53 chapters. “Our varied programs, under the triple ‘A’s, attempt to make the member an active par-

ticipant in the entrepreneurial ecosystem”, elaborates Gandhi, who currently heads the chapter’s affairs and finance as a board member.

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/INSEAD So, how can an entrepreneur make the most of the TiE brand, which is globally synonymous to entrepreneurship? A question we posed to three executive directors of TiE. Bringi Dev (Bengaluru chapter), Geetika Dayal (Delhi chapter) and Manak Singh (Mumbai chapter) spoke passionately about their experience on the ground, bringing to light 15 distinct advantages of being in the TiE network as presented below:

Taste the brew

1

TiE’s ‘brew’ is an essential mix of guidance, education, connections and mentorship. Offered by successful entrepreneurs (charter members) to budding entrepreneurs, this triedand-tested brew, as most members tell us, has recharged and refreshed their entrepreneurial minds.

Pointing out that the brew is also brimming with energy, Manak Singh mentions, “In Mumbai and Delhi, over 70% of our charter members are actively involved in diverse mentor-

ing activities of TiE.” Bringi Dev goes a step further to describe the critical roles played by these key members.

“Charter members commit themselves to mentoring and coaching startups, sitting on the board of the Entrepreneurship Acceleration Program (EAP) or participating as instructors or speakers at TiE Institute workshops, educational programs, seminars, chapter leadership teams and special interest groups and committees. They also help raise funds through sponsorships”, Dev mentions.

Open to all

2

“TiE is a completely neutral, inclusive platform that is sector and stage agnostic,” Geetika Dayal notes. She also describes TiE’s simple entry formalities, “Membership can be procured online at a nominal fee. After that, they receive regular information on TiE programs that they can participate in. They can also seek mentoring services and get access to several other membership benefits,

online as well as offline.” Encouraging membership from non-IT sectors, Dev says, “Currently about 60% of our members are tech-oriented and a significant 40% of our members are from different sectors.” And while TiE Mumbai’s monthly mentoring sessions such as TiE Over Coffee are restricted to members, Singh emphatically adds, “Nearly 70-75% of our other activities are open to all.”

"TiE is a completely neutral, inclusive platform which is sector and stage agnostic.

Membership can be procured online at a nominal fee. After that, they receive regular information on TiE programs that they can participate in."

— Geetika Dayal

Courtesy: TiE Mumbai

Executive Director, TiE Delhi Chapter

Women’s networking session MAY 2009 41

DARE.CO.IN Knowledge is power

3

Kiran Mazumdar-Shaw, Aditya Mittal, Narayana Murthy, Shiv Nadar, Nandan Nilekani, CK Prahalad, Kanwal Rekhi and Arun Sarin to name a few.

To leverage the priceless experience of its charter members, TiE chapters have about 50 sessions a year with a varied range of formats, frequencies and duration. The largest amongst them is the annual TiE Entrerpeneurial Summit (TES). The last TES, held in Bengaluru had 1700+ delegates, 135+ distinguished speakers and over 43 hours of invaluable learning in just

three days. Dev spells out its highlights as, “TES 2008 had 43 in-depth sessions from the global gurus of entrepreneurship, 22 high-powered panel discussions, eight inspiring My Story sessions and was attended by four of the 16 renowned GCMs.”

Mentorship

4

With a stellar resource pool of experience, mentorship is clearly TiE’s key value proposition. Geetika, formerly an entrepreneur before taking on her executive position at TiE

Courtesy: TiE Mumbai

“Entrepreneurs helping entrepreneurs makes TiE’s knowledge exchange a rich learning ground,” says Singh. A framework of processes and tools within the TiE ecosystem enables experienced charter members to serve as leadership role models, trusted counselors/teachers and counsel to members to assist their professional development and growth. TiE global charter members (GCMs) are distinguished individuals like Vindi Banga, Vinod Khosla, Anand Mahindra,

/INSEAD

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/INSEAD notes, “The biggest challenge for an entrepreneur is to pen down his idea, formulate a comprehensive business plan and get proof of concept. TiE helps to evaluate budding entrepreneurs’ business plans and helps entrepreneurs structure their business ideas. Through programs such as Entrepreneurship Nurturing Program (ENP), the entrepreneur is connected to the right mentor. The mentor guides the entrepreneur, giving a shape to his or her idea, setting up the venture (legal), hiring, equity distribution, product development, customer leads, access to funding and scaling up.”

Take the case of budding entrepreneur Devendra Khari. Khari used the knowledge he gained at a mentoring session of TiE to acquire funding in just a week! For his speedy achievement, Devendra thanks his mentor Vivek Agarwal, adds, “The mentoring session guided me on funding, gave me tips on effective marketing and answered queries on some critical areas of my business.”

Not only has TiE been instrumental in making positive changes in governmental economic

Connections to VC investors

5

Although TiE is not a venture/ investments organization, TiE members, through their network relationships, often invest in companies with TiE affiliations. “Funding is a pain point for a lot of startups looking at seed or angel money as well as mature companies looking to scale. TiE helps in connecting entrepreneurs to necessary angels and other VC’s in its network. The connections are not just limited to domestic investors, but international ones as well. TiE also provides a dedicated platform known as the deal flow sessions wherein preselected members can showcase their business plans to investors,” explains Dayal. Besides giving entrepreneurs the opportunity to showcase themselves, Manak adds, “Towards the end of our ENP program, a mentor usually refers his/her mentee to a prospective investor or they tie up with an angel network or financial institution for debt funding”. Bringi Dev has a similar observation to make of

policies in some of the global emerging markets, it is credited to have influenced the liberalization of key sectors including telecom and VC investments in India the hugely successful EAP launched

by TiE-Bengaluru.

Your voice counts

6

TiE provides the right platform to voice industry issues to concerned bodies. TiE undertook a comprehensive seed capital study jointly with Stanford University to advocate policy changes in India. Not only has

TiE been instrumental in making positive changes in governmental economic policies in some of the global emerging markets, it is credited to have influenced the liberalization of key sectors including telecom and VC investments in India.

Window to globalization

7

A TiE membership provides a meeting ground for successful as well as early-stage, small and midsize entrepreneurs, investors, service providers, MNCs, policy makers and academia round the globe. A noteworthy leverage of its global connectivity is a VC delegation led every year by TiE’s silicon valley chapter to India.

Global yet local

8

This global network also provides the dual advantage of its local presence, sensitizing its charter members to the local issues of budding entrepreneurs. In India alone, TiE has 13 chapters, affiliated in spirit with TiE global.

15 REASONS TO TIE UP WITH TIE CONTD. ON PG 64 ç MAY 2009 43

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/blog

Why did I buy this?

When creating the pre-sale package it is critical not to oversell. Exaggerated claims, over-generous promises and ardent courting become millstones around the neck of the brand once the customer becomes a purchaser

H

/Rupin Jayal

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ow often have you regretted having just invested in a new car, motorcycle, fridge, airconditioner, or what have you?

Suddenly all the other brands seem so much better in almost every way.

Some have better features, others seem to be better value, friends and colleagues suddenly seem to know so much better and even though you may have taken forever to decide, that gnawing feeling of discontent just seems to grow.

Why? More importantly, when you are the one selling the product or service, how do you prevent—or at least minimize—the impact of this phenomenon that goes by the term “postpurchase cognitive dissonance”? One of the causes of this, ironically, is if the job of selling the brand is done too well. This raises expectations, sometimes to unreasonable levels, that become very difficult to fulfill. Maximum effort is made to complete the sale and once that is done the attention of those involved in making it goes to the next victim —sorry, customer!

This does not mean that the presales effort needs to be reduced. That would be like suggesting that children should be starved so they don’t become obese. When creating the pre-sale package it is critical not to oversell. Exaggerated claims, overgenerous promises and ardent courting become millstones around the neck of the brand once the customer becomes a purchaser. Tailoring the promise to what can be reasonably delivered is absolutely critical.

There are three reasons for this.

The first is the speed with which bad news can be made to travel in today’s connected world. A disgruntled cus-

tomer no longer influences just his or her immediate community; they can, with a sufficiently well-designed rant, spread the word around the world.

The dissonance can rapidly snowball if others have similar experiences to share and the resulting fallout can drown a brand. If you believe this to be an exaggeration, just see what two pranksters were able to do to the Dominos brand recently—and they weren’t even dissatisfied customers.

Complaints and even cavilling are not limited to words alone. With the advent of YouTube the issues can be displayed in vivid video and easily circulated widely. Even if the issue is resolved, there could be endless discussion around it and even the unaware have awareness thrust upon them. I hadn’t heard about the Dominos fiasco until I read it in a regular update that I receive every day and while it appears to have been handled well, it still left a less-than-pleasant aftertaste. Unfortunately, few people are so ardent about spreading the news of a job well done unless there are highly unusual circumstances surrounding it. Also, quite amusingly, most brands seem to be poorly designed to handle customer appreciation. As an experiment I sent an appreciative message to the famed Apple via its website. Even one of the world’s most admired brands seemed to be unable to respond to such good feedback and chose to just ignore it.

You may rest assured that I will now only express myself to Apple if I am dissatisfied as that is all that they seem to be willing to acknowledge! So not only does bad news travel rapidly via the Internet—and now increasingly the mobile phone—good news often goes unnoticed even when expressed articulately.

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/blog The second reason is that someone who actually owns or has had first-hand experience with a brand is an oracle in most categories. It has been seen in innumerable cases that for consumer durables, almost without exception, the most powerful force is word-of-mouth. The word of someone with experience of the brand is invaluable or severely injurious, depending on his or her experience. That word-of-mouth depends entirely on the post-purchase experience. It would be difficult to find someone who says that they loved the brand because of its advertising and that made up for a disappointing or even indifferent post-purchase experience. The exact opposite of this was a recent personal experience. I made a purchase that I believed to be wildly extravagant. I did not suffer from mere dissonance—I was attacked by a severe sense of guilt. The entire purchase experience was excellent and very much what I expected from a luxury brand, so that was not at fault. It was just the sense of extravagance that caused it. However, ever since I made the purchase I have been made to feel that I am a part of an exclusive club. I have been given discount offers beautifully delivered from the desk of the brand’s senior management personally signed, not just a printed mailer. Information on upcoming styles and offers keep coming my way. Now I know the cynics would say that the brand is merely trying to sell me more stuff—and they would be right. But surely, the task of any brand is to sell. What matters here is the way they have done so. The feeling that the brand’s messaging gives is one of “informing” me rather than trying to “sell.” The distinction is a very important one.

It requires an understanding of tone, the form with which the information is delivered and an understanding of who the brand is seeking to address.

Most importantly, my post-purchase experience means that I willingly accept that my extravagance was at least inspired by a brand that I feel is worth every rupee that I spent on it.

The third reason is that many times the dissonance is created by emotional disappointment. And this emotional disappointment becomes fact as perception is reality because brands largely dwell in the realm of emotions. While they may have tangible foundations, the ultimate decisions that people make to choose or reject a brand are usually driven by emotion. Whether they are happy, just satisfied, or disappointed is also driven by the emotional value delivered by the brand. It is said that human behaviour is heavily influenced by emotions, not solely by reason.

Consumers are often highly emotional and intuitive in their behaviour, operating through the emotional centers of the brain, dictated by their “heart” or “gut feel,” and often independent of conscious control.

They operate on autopilot, pausing only when the emotional radar identifies something loved or different. If the foundations of consumer behaviour are emotional, so it follows that the strongest foundations of the consumer–brand relationship are similarly emotional.

“The essential difference between emotion and reason is that emotion leads to action while reason leads to conclusions” (Calne, 2000, quoted in John Pawle and Peter Cooper, “Measuring Emotion-Lovemarks: The Future Beyond Brands”, Journal of Advertising Research, Vol. 46, No. 1, 2006). This disappointment can, therefore, be driven by a host of reasons, many of which are intangible.

If your new luxury car is delivered with just enough petrol to go to the nearest petrol pump, you might quite justifiably feel that the brand is less than caring. If your valet-parked car at a five-star hotel is returned with a note thanking you for visiting the hotel along with a box of chocolates, it might make you feel that this a brand that genuinely cares about your patronage. A tank full of petrol or a box of chocolates are minor things when compared to the price of the purchase, but they can speak volumes about the way a brand feels

about its customers. As sales become increasingly difficult to come by and people become ever more knowledgeable, discerning and activist, training those on the sales’ frontline will make the difference between brand success and failure. Making promises that the brand can keep and tempering people’s expectations will be critical and in many cases are critical already.

There used to be a time when people selling patent medicines would make wild claims about the efficacy of their remedies. Those days have long gone, but the wild promises of “patent branding” have not. As the world recovers from the frenzy of boom times and the despair of the ensuing bust, people will be even more vigilant and demanding. The days of hype are numbered and brands will have to be driven by fundamental honesty. Promising to deliver and delivering on your promise will be critical. Post-purchase cognitive dissonance might just have been a “typical” post-purchase phenomenon that brands had to live with when there were ever-lengthening lines of people willing to buy them.

But as the cost for making a dissatisfying brand choice increases for people while the Internet enshrines word-ofmouth as the most powerful force in brand choice, this will no longer be an acceptable “cost.” Brands that actively prevent post-purchase cognitive dissonance by understanding the implications of what they promise in terms of the expectations that they generate and obsessively ensure that these are met every time, will gain resilience. Monitoring this is as important as measuring market share, controlling cost, building distribution and product innovation and can no longer fall under the condescension of “customer delight.” It is already essential to the continued success of a brand. Rational issues can be addressed, but if people simply cease to “like” your brand because it does not truly live up to its promise, it will DAR E die alone.

The author is Director-Strategic Planning at M&C Saatchi.

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/strategy

How the economy is changing businesses /Team DARE Consulting, Technology and Outsourcing Services

Kishor Chitale, Head India Local Business Services, Capgemini India How has the industry in which you operate changed in the last six to eight months?

Like any other industry, there have been cost pressures and people have become selective in spending money. So in general, we donâ&#x20AC;&#x2122;t see a large expenditure being planned but even if it is planned, people are watching out very carefully on the returns on investments. They are selective in whatever people are buying. We are pro-actively going as a service offering to the market. The buying pattern has changed dramatically in terms of spending ability and selective spending.

Staffing Solutions In the last six months, what has TeamLease done to: Deal with the slowdown At TeamLease, we view the downturn as an opportunity to build new muscles and provide training. While training is a way of life for employees at TeamLease, the downturn gives you the bandwidth to review, refocus and sharpen the proverbial saw. Teams undergo training audits to ensure each employeeâ&#x20AC;&#x2122;s performance is audited and the short comings addressed through rigorous training.

Get new business The slowdown makes companies more conscious of their outsourcing activity and volumes and likes to ensure that statutory compliances are strictly followed. This throws up opportunities to work the movement of business from the unorganized sector (over 93% of employment is in this bucket) to the organized space that we occupy. We are more aggressive in the market and also more selective of the clientele to ensure that the growth partnership is mutual and the platform strengthens to mutual satisfaction.

Manage costs The focus and rollout of projects that had been put on hold because of the exponential growth of the past 5 years has not only improved customer satisfaction, but also controlled cost. Activities like Internal Training, Skill Upgrade programmes, technology upgrades and innovations have helped to rationalise on costs both in the short run as well in the long run on many counts such as pressure on supply becomes considerably less and with more realistic timeframe we get to focus on productivity and quality rather than throw more bandwidth at every problem.

In the last six months, what have you done to: Manage costs We are operationally focused on getting the best out of available resources, including optimizing workforce.

Get new business and retain customers We are trying to bring the best of Capgemini global story in India. We are very strong in government and public sector globally. We are focusing on that sector which is the best bet at this stage in a downturn market where at least some amount of structured funding is being planned. That one area, which is a strong point of Capgemini, is helping us to prioritize our focus in terms of what value we can add to the expenditure that is being planned. The other area that we are focusing on is the power sector.

What innovations are you doing in services?

We are now well connected with our clients to understand their pain points and the strategies that we are working together to overcome the downturn. That is what we call techno-vision in downturn.

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Mohit Gupta, Co-Founder, TeamLease

DARE.CO.IN

/strategy Corporate Gifting

Venture Funding

What are you doing to get new customers?

Contrary to popular belief even in this time of recession, we have increased our marketing budget. We are spending this on collecting database through reference and sending direct mailers. We are using promotional e-mailer effectively by ensuring that we send them on a regular basis and let our customers know what are the new things we are doing.

What are you doing to retain existing customers?

Good customer service is the most talked about and probably least implemented but that is the reason why most of our customers stick with us irrespective of their requirement. Budget cut are a reality everywhere, so we have already prepared economical options which our customers can choose from.

What are you doing to cut cost?

Nothing much. There is not much scope as I started Pinnacle with very less money we never had extra money to splurge. We were always conscious about where we spend money be it for human resources or marketing. However at the product end based on the requirement of the customers, we are sourcing and making more cost effective products. Cost of raw material and labor in many cases have come down so automatically our customers get benefited from this.

What product innovations you are doing in view of the slowdown?

Shortly we would be launching our own range of promotional products and awards under a new designer brand name. We are developing this range based on our experience and customer feedback, we have received in the past nine years of running Pinnacle.

Nidhi Seth, Director, Pinnacle Rewards and Recognition

Sanjeev Aggarwal, MD, Helion Advisors In the last six months, what have your portfolio companies done to: Manage Costs and Get new customers There are a few dimensions to this. One is to reduce the cost of failure by quickly discovering stuff that does not work. So, reduce the number of experiments around new products, new markets, and narrowly focus on existing products and services and customers. Also explore channel partners instead of direct sales to reduce your cost of failure. Rely on the web like SEO and search engine marketing as an additional channel of sales, substituting high-tech sales with tele-sales, and only when tele-sales yield positive response do you deploy high-tech resources. Reducing the extent of free trials in order to convert your customers as early as possible.

Also increase the variable compensation and if possible hire some people on 100% variable compensation, which means they only get rewarded if they bring business. The second aspect is to focus on purchasing. So renegotiating vendor contract. The third part that we have seen across most part of our portfolio is voluntary cuts taken by top management team. In some situations, it is as high as 50%.

So it acts at two levels. One, the management costs generally tend to be a reasonable number and two, it sends the signal across the entire organization. These are the things that folks are doing to manage costs.

What innovations are they doing in terms of products and services?

The trend that I see is that people are doing a better job of packaging services and selling those as a solution. The good example is the travel industry. You can sell air travel separately. You can sell hotel booking separately. But if you offer a holiday package in which your air and your hotel and sightseeing is all bundled under one head. So that is a solution. So folks are taking more complete offering to the customers. That is the innovation that I am seeing.

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DARE.CO.IN HR Software

/strategy Juice Bar In the last six months, what has Joos done to: Get new Business?

We have started targeting customers by participating in college campuses, fairs, etc. At those stalls, we are offering drinks at a much subsidized rates to attract more customers to try out our products. We have also started offering different combos and schemes.

Retain existing customers?

To retain our customers, we have started customer loyalty programs. We are giving discounts to customers who have been coming regularly to our store.

Tushar Bhatia, President, Saigun Technologies How has your industry - HR software - changed in the last six months?

Because of the recession, the focus on productivity has increased significantly. This has increased the demand for good HR Software. Earlier, organizations used to look for niche solutions to meet their different HR needs (strategic & transactional). Now organizations are asking for unified and integrated platforms which can offer complete solutions. With global M&A on the rise, organizations are looking for HR software that can manage varying policies, multiple languages and currencies - all under one platform. HR Software maturity is rising.

What are you doing to get new business?

Significant increase of marketing activities - especially those where we can track the results; increase in sales teams; qualitative improvements in the sales processes by continuous training; targeting new geographies; and targeting new segments.

Manage Costs?

We have also been working towards managing our costs.

Like for example, earlier we used to prepare juices directly from fresh vegetables or fruits, but now we are converting fruits and vegetables into pulp and then storing them in deep freezers. This helps in cutting costs because these fruits and vegetables maybe firstly not available off season or secondly be available at higher prices. This way, the pulp can be stored for around two-three months. This has helped us in reducing cost by approximately 20%. Beside this, we have also reworked on our transportation cost. We now procure our fruits and vegetables from a nearby source.

What innovations have you made to your products?

We have come up with more natural mocktails, sandwiches and salads. We have also introduced more combo deals in our menu. Besides, we have introduced deals such as customers who opt for monthly deals have some price benefits over those who buy at our retail counter.

What are you doing to retain existing business?

Major improvement in product and adding new features based on individual client requirements; meeting customers to understand where our product can add value to their operations. Adapting the product to meet these requirements. For instance, we may create personalized reports for specific customers to meet their analytical needs. Improving the engagement level of the end-users of our software by improving user-interface and providing training.

What are you doing to manage costs?

Multiple steps were followed such that we could continue to improve on the margins. Asked each department / function to submit reports on a periodic basis; then worked with each manager to see where we could trim our budgets and implemented suggested changes aggressively; communication with employees on cost reduction strategies - for instance switching off ACs when nobody is in office.

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Siddharth Jaiswal, Co-Founder, Joos

DARE.CO.IN

/strategy Managed IT Services & Solutions

Ranjan Chopra, CMD, Team Computers What have you done in the past six months to: Get new business We have set up a marketing department which is focusing on brand building, generating leads, electing right fit customers. We have been participating in several customer events, the CIO community and now the CFO and CEO community also. Becoming customer centric, closer to feeling the pains, sensing needs and offering solutions.

Retain existing business Adding more value, reducing rates at times.

Manage costs We have re-looked at all contracts and renegotiated, innovated, moved to smaller spaces, done more with less.

Become religious about cost budgets.

Seed Funding In the last six months, what have your portfolio companies done to manage costs?

Most of our companies never had a bloated cost. So it has been important for us to keep breakeven with our kind of funding. They never had excess costs.

None of them are badly hit by the slowdown because they are in businesses which are fairly basic businesses. People still want to travel by bus, which would be better in this economy than air; people are still searching for cars if not new cars; people are still going doctors etc.

Our portfolio companies are in these businesses. Not to say that nobody has been impacted by the slowdown. Revenues of some of the companies are slightly down. None of them actually have had excess costs to trim off.

The expansion has been slower. In terms of costs, they all had optimum cost structure.

What innovations are they doing in terms of products and services?

That is a constant process. That we would do whether the times are good or not. As growth is the only mantra for startups, they have to continue to grow through existing customers and through new customers.

How has your industry changed in the last six months?

Focus on what the customer needs, not on what you have to sell, become buyer-centric. Most companies have had to revise business models and those who haven’t are in the process of extinction.

What product or service innovations have you done / are you planning to do?

An example: We had a call center staffed with 10 people, built a smarter web based application which customers are now directly accessing which has helped us cut down call center strength to 3 people without sacrificing customer satisfaction.

Bharati Jacob, Partner, Seedfund

Astrology Portal

Meena Kapoor, CEO, astroYogi.com What has Astroyogi done in the past six months to: Get new business?

Astrology as a segment is agnostic to the recession, because in good times people need astrology and in bad times they need it even more. So basically it is a recession proof industry, and we haven’t been much affected by it. In fact, we have witnessed a 15-20% growth. Now we have a lot of questions on the segment of career, finance, and this segment has witnessed a good growth.

Manage Costs?

As I said earlier, we haven’t been affected too much. However, we have adopted certain mandates to conserve cash. We have become a little frugal and wherever possible, we have cut down on unnecessary costs like for example on traveling. However, we haven’t done any major budget cuts and we are still hiring people.

What product innovations are you are doing?

We have launched a phone advice service recently called the “Live Phone Advice”. The service is still being data tested though an India version has been released. It is a person-to-person service that allows an astrologer anywhere in the country to be consulted by a client anywhere in the world. And this meeting is in real time and not over an appointment. The person only has to click a button to be able to be connected to an astrologer.

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DARE.CO.IN Publishing and Media Services

Bhupesh Trivedi, CEO, Chronosphere In the last six months, what has Chronosphere done to: Deal with the slowdown i. Down-sizing ii. Moved into a smaller office/reduced costs on infrastructure/reduced all fixed recurring costs Get new business i. Started looking at domestic business, which was not the case earlier. ii. Using existing newsletter with more prominent offer of our services/expertise.

Retain existing customers i. Nothing much really. Canâ&#x20AC;&#x2122;t stop a client who is moving out. Offering lower rates doesnâ&#x20AC;&#x2122;t really help either the client or us.

/strategy Outdoor Advertising In the last six months, what has LiveMedia done to: Get new business We have further strengthened our sales force. Many of our customers who have been advertising on TV, Press etc, are now realizing that if they advertise with us, they can do very focused advertising and that too at a fraction of the cost. So we are making sure that we go to them and explain our value proposition. And we have had a reasonable amount of success at that.

Retain existing customers To retain our existing customers, we are giving them added value, for example if they were getting x exposures earlier, now we are giving them y exposures at the same price. We have also come up with value packages that give more precise packaging, basically to give more value for money.

What innovations are you doing in terms of products and services?

We are now offering value packages.

For example, a beauty product. Maybe, earlier the advertisers were going to various channels and press to advertise their product, and let us say they were reaching 100 people. But, out of that 100 only 10 would be their target segment who would actually buy that beauty product. In that case, almost 90% of their advertising was a spillover. If their target audience was girls, so what we are doing is we are telling them to advertise in salons and at a fraction of cost.

What strategies is the company following to deal with the downturn?

Apart from reduced costs and increased focus on domestic clients, we have started exploring partnership relationships with our clients.

What innovation in products and services are you doing to deal with it?

For some of our web-development services, we have actually offered solutions, services and training to enable the client to do several tasks on their own, rather then depend on us or any other service provider. This is turning out to be a major advantage for us in terms of gaining new clients. Yes, it does take away the opportunity of generating revenues through the important model of maintenance.

50

MAY 2009

Event Management

Viraaf Pocha, Landmark Events What are you doing to get new business?

Nothing out of ordinary.

What are you doing to retain existing customers?

Double energy and follow up. Willingness to accept rate cuts.

What are you doing to manage costs?

General administration prudence.

What products and services innovation have you done or are planning to do?

In our business, we canâ&#x20AC;&#x2122;t lower any standards or remove any more back ups without inviting disaster.

John Du Plessis, Technology Manager, Southern African Institute of Welding How has your industry changed in the last six months?

Our training services are at the same levels as 2008. Our consulting business has seen a loss in the mining and automotive sectors as those sectors have virtually stopped. There has been an increase from the infrastructure and energy sectors. We have done more marketing to attract new clients.

Mark Soanes, Director, Call of the Wild, People performance specialists

Rajan Mehta, Founder and CEO, LiveMedia

Things are certainly quieter than in the same period last year. What we are finding is that clients are looking for best value in everything we do. D A R E

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DARE.CO.IN

/going global

Doing Business in Bahrain There is plenty of scope for the business communities in India and Bahrain to work closely together to explore opportunities in a number of lucrative sectors /Vimarsh Bajpai

I

t was with an eye on the fast-growing market of West Asia that Wipro, the end-to-end IT solutions provider, set up a base in Bahrain six years ago, inking a tie-up with Maskati Commercial Services as its local business partner. With a clear goal of becoming a regional telecom and IT hub, this was Wipro’s strategy to work more closely with its customers in the region.

Wipro is among the big names in the IT business to have made their mark in Bahrain, one of the most investment-friendly counties in the Gulf.

Tata Consultancy Services, Infosys and Satyam are already working in Bahrain. Besides IT and communications technology, there are a number of other sectors where Indian entrepreneurs and businesses can tap opportunities. Many of these sectors remain unexplored so far. Take solar energy, for instance. The country receives ample sunlight, around nine hours a day on an average. According to some estimates, every square meter of land is capable of generating over 2,000 kilowatt hours of energy a year.

INDIA-BAHRAIN TRADE

Note: All figures in US$ Million Source: Ministry of Commerce, Government of India

DARE/doing business Ease of….

2009 Rank

2008 Rank

Change in Rank

Why Bahrain?

Doing business

18

17

-1

Bahrain’s economy is highly developed and is welcoming to foreign investors.

According to a report by Ernst&Young, “The government recognizes the need to broaden the country’s economic base and welcomes foreign investment considered to be economically beneficial.” Despite the slowdown, the country is doing well on the economic front. “Banks have enough solvency.

Financing of projects is carried out by available funds and resort to borrowing is avoided. The economy is booming in Bahrain as an international financial center and is attracting money

Starting a business

49

45

-4

Dealing in construction permits

14

15

1

Employing workers

26

30

4

Registering property

18

15

-3

Getting credit

84

79

-5

Protecting investors

53

49

-4

Paying taxes

15

14

-1

Trading across borders

21

20

-1

Enforcing contracts

113

115

2

Closing a business

25

25

0

52

MAY 2009

SOURCE: World Bank Doing Business 2009 Report

DARE.CO.IN

/going global

Mohamed Ghassan Shaikho, Ambassador of the Kingdom of Bahrain Given the global economic slowdown, what steps is Bahrain taking to boost its economy and assure investors?

We have always made a concerted effort by our leadership, the government, parliament, and the business community in Bahrain so that the economy will be diversified standing on solid grounds guarding against waste. Investment banks and financial activities are supervised by the Central Bank of Bahrain. We have also a National Committee comprised of all the concerned authorities in addition to the Central Bank of Bahrain to make sure that financial activities and investments are within the guidelines of the International Monetary Fund (IMF), Financial Action Task Force (FATF), Financial Sector Assessment Program (FSAP) and United Nations Security Council (UNSC) to guard against shady transactions, money laundering and financing of terrorism.

Banks have enough solvency. Financing of projects is carried out by available funds and resorting to borrowing is avoided. The economy is booming in Bahrain as an international financial center and is attracting money because we have proper, effective regulations and a free economy.

The international financial crisis has affected everybody in the world with varying degrees.

The effect on Bahrain has not been damaging.

Furthermore, countries members of the Gulf Cooperation Council (Bahrain, Saudi Arabia, Kuwait, UAE, Qatar and Oman) have always been cooperating and coordinating amongst themselves, thus creating a strong and viable amalgamation.

What makes Bahrain a lucrative destination for Indian entrepreneurs?

Bahrain is a very mature, well-established business hub, with the largest financial institutions in the Gulf. With a track record of nearly

40 years, it is still one of the financial services leaders in the entire region. The Central Bank of Bahrain is unquestionably one of the best regulators in the region. Bahrain provides a free, open, and transparent environment for businesses that is globally competitive. It focuses on sustainability, skills and good governance.

There is a unique vision for the future that is based on sustainable and productive economic diversification across various sectors.

Bahrain has already concluded a Free Trade Agreement (FTA) with the United States of America. Any product that has a 35% value addition in Bahrain qualifies as product made in Bahrain. Indian companies, if they so wish, can establish industries as a joint project with local industries, or could own 100% of the new company or factory established there.

This arrangement will be mutually beneficial to Bahrain, India and the US. Cooperation with Indian entrepreneurs is not restricted to industry alone, but it could also include the service sector, banking and financial sectors and others.

Bahrain as part of the Gulf Cooperation Council (GCC) is actively negotiating FTAs with the European Union, India, China and others.

Costs of running a business in Bahrain is the lowest in the Gulf region. We have industrial economic zones. We can offer the companies land. They can establish industries and build offices and other establishments to accommodate their staff. They need not have to commute.

Industrial zones are close to deep sea ports.

There is a free zone within the port. All these are very near to the Bahrain Airport and the highway to Saudi Arabia.

The environment in Bahrain is very friendly.

We are open to other civilizations. We respect other people and their cultures and religions.

People of all faiths have their places of worship in Bahrain. There are mosques, churches, synagogue, Hindu temples, Sikh gurdwaras and others. We value and protect human rights.

We are a democratic country, with a parliament and free press. Lots of international events and conferences are taking place in Bahrain.

We are here not only for political cooperation, but also to promote our relations with India in all fields, including trade, financial activities, industry, science, health, education, cultural exchanges and others. Bahrain considers India a strategic friend.

What incentives (such as tax rebates, etc.) do foreign investors get in Bahrain?

As Bahrain is conveniently located at the heart of the GCC, it provides a gateway to Asia, Europe MAY 2009 53

DARE.CO.IN and Africa. Simplified administrative and legal systems and procedures, along with rapid industrialization, have assured excellent opportunities for the foreign investor to consider Bahrain as a Middle Eastern base for business activity.

Bahrain has a unique mix of market access, skilled labor, low operating costs and zero income and corporate taxes, combined with a liberal and high standard of living, which has stimulated investment across a wide range of sectors. Currency is instantly convertible and you can repatriate any amount of money.

In addition, Bahrain offers 100% foreign ownership of business assets and real estate in most sectors of the economy. There are no custom duties on imports of raw materials, semi-finished commodities brought in for further processing, imports required for development projects, machinery for manufacturing, or on goods imported for re-export.

Which are some of the lucrative sectors where Indian businesses can invest in Bahrain? What opportunities exist for them in these sectors?

Small and medium enterprises and industries, hi-tech Industry to downstream aluminum and steel that is produced in Bahrain, to manufacture parts that can be sold to big international companies.

Investors can also work on transit trade.

They can enter real estate development in Bahrain and India can attract Bahraini real estate developers to India.

Indian investors have the choice to establish their own companies or have joint ventures with Bahraini companies. Indian banking and insurance companies can benefit from Bahrain.

Indian companies can look into the possibilities of having joint ventures to build means of transport (sea, road, rail) and in lots of other areas.

Bahrain pays lots of attention to the IT sector. Thus, it is only natural to cooperate with the Indian IT corporates who have done a wonderful job, not only in India, but worldwide.

Further, there are possibilities of investments in new sectors like atomic energy, solar energy, tourism and land development.

How easy is it to start and close a business in Bahrain?

The Bahrain Economic Development Board (EDB), a dynamic public agency with the overall responsibility for formulating and overseeing the economic development strategy of Bahrain, offers an investor facilitation service to firsttime investors who are interested in investing in 54

MAY 2009

/going global Bahrain. This service includes acting as the first point of contact in the kingdom, understanding the objectives of investors, providing them with information regarding the relevant procedures for setting up business and helping them form a network of contacts in Bahrain.

Bahrain has a One Stop Investment Center, and the primary function of this single-window agency is to assist investors starting with the application process up to the point of signing the lease agreement.

Any comments on the India–Bahrain trade relations?

Bahrain and India have enjoyed excellent relations for many hundreds of years, from the times of the Indus Valley Civilization in India and the Dilmun Civilization in Bahrain.

Relations between India and Bahrain have been growing steadily and have touched new horizons. Trade has been intensifying between the two countries. India and Bahrain have always maintained friendly and cordial relations. The two countries hold similar views on several important international issues. Economic and commercial relations between the two countries have strengthened.

The Bahrain India Society was founded in 2008 and currently plays an important role to compliment the efforts of the government and private sector. A sister society will be founded in India very soon.

Through mutual investment, Bahraini investors have commenced to develop in India an integrated energy business district—Energy City in Mumbai. Apart from this, there is active participation of Bahraini businesspeople in India from various sectors. Indian investors and businesspeople are also active in Bahrain.

Further, it will be advantageous for both countries to go ahead with joint ventures. The advantageous edges of both countries, including FTAs with third parties, will compliment each other. This will bring not only prosperity to both countries, but also help build a more stable and peaceful environment in their neighboring regions. The leaders of both countries are working towards further strengthening the ties between them.

The oncoming Formula One Gulf Air Bahrain Grand Prix 2009 hosted by Bahrain International Circuit (BIC) and Gulf Air, which will take place in the period of April 24-25, 2009 have introduced new rules and regulations to transform the spectacle of the FIA Formula One World Championship and encourage tourism. Indian nationals can obtain visas on arival for this event.

DARE/key sectors n

Information & communication technology

n

Real estate

n

Tourism

n

Health care

n

Solar energy

n

Manufacturing

n

Professional services

n

Logistics

because we have proper effective regulations and free economy,” says Mohamed Ghassan Shaikho, Ambassador of the Kingdom of Bahrain.

An archipelago of 36 islands and a history of around 5,000 years, Bahrain is business-friendly. Its industrial economic zones are strategically located close to transportation networks, making it easy for businesses to access markets fast. No wonder some of the world’s most respected companies, including large conglomerates and financial institutions, are based there.

The country itself is a gateway to the lucrative markets of the Gulf region.

The presence of an educated and highly-skilled workforce is an added advantage to foreign companies operating in Bahrain. Its infrastructure is extremely modern. The telecommunication and Internet facilities are at par with global standards.

The country’s Economic Development Board (EDB) works out strategies to attract foreign investment in a range of sectors that are pivotal to the growth of the economy. Its efforts are bearing fruits as Bahrain ranks 18 in the Doing Business 2009 Report of the World Bank. It improved its position by one place over the previous year’s rankings.

The country has improved its rank on several parameters such as employing workers and enforcing contracts. D A R E

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Delhi

DARE.CO.IN

case/INSEAD

ç WHERE SHOULD iXiGO GO NEXT? CONTD. FROM PG 25

iXiGO was a meta-search engine that aggregated travel listings from other sites, enabling easy comparison of travel options with a single search. By May 2009, iXiGO was approaching cash flow breakeven and Bajpai knew he faced a major decision in the near future. Should the venture continue to grow organically, as it had since its birth, or was it time to raise more capital, spend more aggressively on brand-building and marketing, while perhaps even expanding iXiGO’s focus outside India?

In May 2009, Aloke Bajpai is still considering his growth options. IXiGO has just expanded into rail availability and fare search, a segment of the market they had their eyes on from the time they started the company, given the central importance of train transportation in India. Now that the firm covers air, bus and rail travel plus hotels, Bajpai is ready to consider investing more aggressively and marketing. He explains, “Marketing resources are temporarily cheap because of the recession. If we keep growing organically over the next two years, our competitors will have a lot more marketing muscle. Everyone’s marketing budgets are down now; no one is investing in marketing. Therefore, this may be the right time to build our brand. If we wait 56

MAY 2009

more than a year or two, our ability to scale up with the same investment and marketing resources will be lower. We can scale with or without extra capital, but when you build a brand and invest in marketing, you have more muscle behind you when talking to advertisers or new partners. When we started, some companies would not work with us because they had not heard of us. India is not like Silicon Valley, where people love to work with startups. In India, you need credibility to sign up partners faster and we aspire to do that.”

In addition to putting more into marketing, Bajpai sees an opportunity

“When we close our eyes and see ourselves three years from now, the decision is tougher because we have the right experience and team to go global. Our technology talent is world-class.”

to build his brand by investing in product development. He explains, “We have an opportunity, if we can raise more capital, to build a brand through intelligent products, not sheer investment in expensive marketing channels. Competitors’ product budgets are down. If you build sexier applications, you can accelerate your growth through word-of-mouth. There is an opportunity cost if you don’t grow aggressively when it is cheap and when everyone else’s guns are silent. Metasearch is still a novelty and people are still discovering iXiGO and figuring out what it’s all about. Unlike the US market, where Kayak launched nine years after Expedia, consumer preferences can still be shaped in the Indian market. We are betting that meta-search can become the dominant business model for online travel in India.”

With respect to international growth, Bajpai believes this choice depends on a thorough assessment of the company’s ambitions and strategic objectives. He elaborates, “If we are an India-only company, we only need to understand the mindset of Indian consumers and people who fly in and out of India. You hire people based on your choice to be a completely Indian brand that identifies of Indian values and engages the Indian psyche.” Paradoxically, if his team were less diverse, this would be a simpler choice. “This

case/INSEAD

“Everyone’s marketing budgets are down now; no one is investing in marketing. Therefore, this may be the right time to build our brand.

If we wait more than a year or two, our ability to scale up with the same investment and marketing resources will be lower.

We can scale with or without extra capital, but when you build a brand and invest in marketing, you have more muscle behind you when talking to advertisers or new partners.”

DARE.CO.IN team has a very global background and has seen both the US and European markets,” he says. “When we close our eyes and see ourselves three years from now, the decision is tougher because we have the right experience and team to go global. Our technology talent is world-class.”

However, the local nature of iXiGO is part of what makes it hard to copy, Bajpai believes. He explains, “You can do a lot more in India with the same investment, so your return on capital if you enter bigger markets might not be comparable” He continues, “More recently, the kind of products we have been launching here are very Indian.

For example, when you show a bus route, you list that it is a Volvo bus with reclining seats and air conditioning, or you show both general and tatkal availability in trains. You would never use terminology like that in the UK or the US. You also have to take into account regional language differences. All that makes it tougher for foreign competitors to enter the market by replicating what we do.”

Bajpai is concerned that India’s Internet sector may not expand as rapidly as iXiGO needs if it is to scale as well as rivals in foreign markets can.

He remarks, “There are still only 40 or 50 million Indians on the Internet and it is not moving up as fast as people expected, although the mobile story is pretty good. There are a lot of strategic advantages if we constrain ourselves to the Indian market, but we question where a bigger scale can come from.

We want to retain our Indian-ness and our Indian advantage even if we go abroad. It is possible to tackle markets like non-resident Indians (NRIs) or nearby geographies with less risk.

Right now, our approach is to test the waters by launching products that can be used in other geographies. For example, our hotel product is global, and people from the US, UK, Singapore, Australia and Middle East use it every day to find hotels in those geographies.

We will wait and watch how much traction these products get organically to see when is the right time to enter the DAR E right market.”

MAY 2009 57

DARE.CO.IN

funding/strategy

Sohil Chand Managing Director, Norwest Venture Partners India (NVP India) Norwest Venture Partners is a global venture capital firm. MD Sohil Chand is focused on making growth equity investments in Indian companies across a wide range of sectors, including telecom, technology, financial services, infrastructure and manufacturing.

He has over ten years of financial, investment banking and private equity investment experience from leading global financial institutions. Prior to joining NVP, Sohil was an executive director in Goldman Sachsâ&#x20AC;&#x2122; Asian Special Situations Group, a balance sheet investing group with over $4 billion under management 58

MAY 2009

DARE.CO.IN

funding/strategy

I

n view of the current economic slowdown, how have

What is the minimum ticket size of your investments?

you reworked your investment strategy?

There is no minimum. All the later-stage deals, which is

I don’t think there has been any particular change in our

where we are focusing, have a minimum ticket size of US$

investment strategy. We have always been very conserva-

15 million.

tive and focused on extracting value, and that is something we are continuing to do. The slowdown has un-

What kind of returns do you think are realistic when we

covered compelling opportunities at good prices. So are

talk of VC investments?

looking more actively in this environment than we have

I don’t think there are realistic returns per se. It is a

over the last year.

mix, depending all upon risk and return, and the rela-

We are sector agnostic. So we focus on all sectors, with

tionship between the two. If you are doing a deal that

the exception of real estate and commodity. We can invest

is relatively protected, then you can get a low return.

in anything and everything and that continues to be the

If it is a deal where you are taking a huge amount of

focus. We will evaluate deals across sectors that are most

risk, obviously you want a higher return. So it depends

attractive for us.

on the stage. In general, it is fair to assume that for early-stage companies, the more early they are, the

Are you still actively pursuing investments or are you

higher the return expectations would be, as opposed

on hold?

to relatively later-stage established companies. The

Of course, we are actively pursuing investments. Sure. But

other thing is, for structured deals return expecta-

business plans is not our priority necessarily. We are also

tions would be lower than for straight equity deals. So

investing in companies that are up and running. We are

we don’t have a benchmark that we look at the rate of

looking proactively at the secondary market.

return tradeoff.

investor of the month W hat are your investee companies doing in the

How much time do you stay invested?

current scenario?

All this is very stage dependent. Early-stage could be seven

Our investee companies are doing very well. They haven’t

to eight years and later-stage could be three to five years.

really been that impacted with the slowdown. Obviously they have been careful about spending money, they

Have you exited in India as of yet? What exit strategy do

are trying to conserve cash but it’s business as usual for

you have?

all of them.

We haven’t exited in India so far. We have a relatively nascent portfolio. Exit would typically be through an initial

One of your portfolio companies is Yatra, the travel por-

public offering (IPO). We may sell something in the IPO

tal. The tourism sector has been hit badly. You mentioned

and then may look to the secondary market.

that all your portfolio forms are doing well. Is Yatra doing well too?

What’s the fund size? How much money do you have with

I am not able to comment on specific companies. In

you to invest?

general, the portfolio is doing very well. I can’t go into the

A lot of this is not publicly disclosed. We have been invest-

specifics of each company as a matter of policy.

ing from a US $650 million fund, which is a global fund. We don’t have any specific allocations for India. We are look-

Are you looking at re-capitalizing your investee compa-

ing to deploy money both in India and around the world.

nies? If yes, what is the approach? What are the criterion and benchmarks? If not, why?

What do you look at before you decide to make investments?

No, not to my knowledge. Our companies are doing well. If

We don’t focus on entrepreneurs. That is something we

they need more funds we will consider supporting them.

could look to do. We spend a lot of time on growth investMAY 2009 59

DARE.CO.IN

funding/strategy

ments of established companies.

We look to give them growth equity.

We look at the same things in all our deals. That is, we want to see a great management team. We want to see a business that is highly scalable.

We want to see a financial model that can give the returns that we would expect and we would want to understand the risks as to what can go wrong and what we can do to de-risk the business.

How do you think the current slowdown will affect the entrepreneurial ecosystem?

Entrepreneurship continues despite the slowdown. Those who have ideas, they continue to develop those ideas. I don’t think the slowdown has anything to do with their ability to come up with new ideas.

on his capital too and he wants to

I think the biggest challenge is the huge volume of deal source.

Sifting through the deals and deciding on which ones to spend time on and which ones to do is the biggest challenge right now. We are in a deployment mode and there is just a huge number of opportunities

make sure that everything is going right. So you need to look at in the context. If it is a startup company, investors would certainly be involved. They have stake in those companies. They should be involved. In a later-stage company, you find investor involvement is less, so the company has already grown to a critical size. You are giving money as growth capital. So in this case, there is perhaps less interaction with the investors.

I don’t think involvement of investors is a bad thing at all. The investors ultimately are trying to make money for themselves if you make money for the entrepreneur.

It is not as if the investor has a different return profile from the entrepreneur. Everybody is working on the same thing to make the com-

How closely are you involved with your investee companies?

pany as successful as possible.

It depends on the stage of the company. In early-stage companies we are closely involved. We typically take

What are some of the challenges that you face in your role

board seats, we help them with key strategic decisions. In

at NVP?

later-stage companies we are obviously less involved. We

I think the biggest challenge is the huge volume of deal

may take a board seat or may not.

source. Sifting through the deals and deciding on which ones to spend time on and which ones to do is the biggest

There is a perception that when investors come on board

challenge right now. We are in a deployment mode and

they try to call the shots. How do you allay such fears?

there is just a huge number of opportunities. [We are] fig-

Entrepreneurs need to be realistic. They want somebody to

uring out which sector one should focus on, what specific

put in US $10 to 15 million and that somebody else is go-

companies one should focus on. There is a huge amount of

ing to take a significant stake. The investor wants a return

opportunities out there and you can just get lost in it.

SMS:

“DARE <your comments, questions or suggestions>” to 56677 EMAIL:

dare@cybermedia.co.in WEBSITE:

www.dare.co.in 60

MAY 2009

DAR E

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sector/internet

Jittery Season says Akamai report The last quarter of 2008 saw some disruption in Internet services, thanks to the breakdown of undersea cables, with even Gmail affected by a minor outage /Aswathi Muralidharan

H

ow would you describe a day without the Internet?

A day without e-mails? Unthinkable, isn’t it? While the Internet has made life easier for us, on the flip side it has made us dependent on the medium so much so that even a slight disruption makes us feel crippled. As an entrepreneur, one ought to keep tabs on the latest trends and updates in the Internet space.

Three major happenings in the Internet space concerning India made the news during the quarter under review: three undersea cables severed, causing disruption in service; public sector telecom giant MTNL launched India’s first multiplay service and high-definition television on fiber-to-the-home service; and the outage of Gmail, one of the world’s most popular mailing platform.

Network outage The first major incident was on December 19, 2008, when three major undersea cables—SEA-ME-WE 4, SEA-ME-WE 3, and FLAG—located in the Mediterranean were severed causing significant disruption in Internet services across Europe and Asia. This incident, which was similar to another such disruption in January 2008, resulted in more 62

MAY 2009

Quick Points 1) Attack traffic: During the fourth quarter of 2008, attack traffic originated from 193 unique countries, up by 8% from the third quarter count of 179 countries. The US was ranked number one for the first time in 2008, after being placed second to either China or Japan throughout the year. The US, China, Taiwan, South Korea and Japan were consistently among the top 10 countries generating attack traffic through the year.

2) Fastest countries: Approximately 19% of Internet connections around the world were at speeds greater than 5 Mbps, representing a 21% increase over the average global connection speed at the end of 2007. With an average connection speed of 15 Mbps, South Korea held the first position.

3) Slowest countries: The Akamai report states that, “Similar to the prior three quarters, many of the countries with the largest percentages of connections to Akamai at speeds below 256 Kbps were either island nations or on the African continent.”

4) Undersea cables: According to telecommunications research firm Telegeography (as mentioned in the report), the rapid growth in Internet capacity around the world over the last decade has led to a diminished role for the US as an Internet hub. In 1999, 91% of data from Asia passed through the US at some point, but by 2008 that had fallen to just 54%. One major reason for this being “inter-regional connectivity made possible by numerous submarine cable projects.”

5) Wireless connectivity: There were three major events in this space. In November 2008 NASA reported successfully tested its Deep Space Network, modeled after the Earth-bound Internet.

DARE.CO.IN

sector/internet than 1,400 of Egypt’s and more than 450 of India’s globally routed prefixes (networks) suffering outages, according to measurements from Renesys, a firm that provides global Internet monitoring and analysis solutions. Repair work began only two days later, when France Telecom, one of the largest telecommunications company in the world, dispatched the repair ship, Raymond Croz to the site. The Akamai report states, “Unfortunately, as France Telecom finished repairing the SEA-ME-WE 4 cable on December 25, the cable broke again in a different place, which pushed out repairs until approximately 10 days later than originally expected.”

However, this was not the only case of network outage in the last quarter.

Earlier, on December 4, equipment failure had hampered connectivity in Haiti, which resulted in outage that lasted for approximately three-anda-half hours. On December 8, Time Warner’s DNS servers failed, resulting in an Internet impairment for approximately two-and-a-half hours.

Fiber to home connection The quarter saw the launch of public sector telecom firm MTNL’s multi-play service and high-definition television on its fiber-to-the-home (FTTH) platform on November 11, 2008. This was in association with Aksh Optifibre, a manufacturer and exporter of optical fiber cables. While hailing its service, MTNL said that “replacing the traditional copper wire from the exchange to the home (also called the last mile connectivity), would allow customers of MTNL to experience world class tele-viewing and Internet browsing experience from the comfort of their homes.”

It is notable that though the FTTH segment is being explored by many operators, most of them have sidelined their plans in favor of directto-home service. Indian firms were not the only one to introduce FTTH services, as announcements were also made by Brasil Telecom (Brazil), Telefonica (Spain), Telecom Italia (Italy), and TTK (Russia).

India stands at: Rank

For

20

For number of unique IP addresses, with 2.63 million IPs

115

In terms of average connection speed, with 772 Kbps average connection speed

17

In terms of attack traffic, with 1.16% of observed attack traffic

62

For high broadband adoption, with 0.56% of connections to Akamai at speeds over 5 Mbps

81

For high broadband penetration, with fewer than 0.0001 high broadband IPs per capita in Q4 2008

93

For broadband adoption, with 3.74% of connections to Akamai at speeds over 2 Mbps

118

For broadband penetration, with 0.0001broadband IPs per capita in Q4 2008

55

For narrowband adoption, with 25.8% of connections to Akamai at speeds below 256 Kbps

Gmail outage

Interesting trends: India vs others

On February 24th of this year, many Gmail users could not access their mail accounts as the site had a major outage lasting over two and a half hours.

Gmail was quick to apologize. “Lots of people around the world who rely on Gmail were disrupted during their waking and working hours, and we’re very sorry.” The reason for the outage was described as a “routine maintenance” at one of the European data centers.

The apology said that this generally does not cause any disruption as then the routing is done through another data center. However, due to some new code (that keeps data geographically closer to the user) another data center in Europe was overloading. However, this was not the first instance of Gmail outage in the last year; it has reportedly suffered from at least five such outages in the past year.

India grabbed the 20th spot globally for the number of unique IP addresses existing, with 2.63 million IPs. The number grew at 42.91% year-overyear, and 1.69% from the third quarter of 2008. The US ranked number one, with 114.1 million unique IPs. India, with an average connection speed of 772 Kbps, was at 115th position among the 223 countries measured in terms of average connection speeds. The global average was reported to be 1.5 Mbps. South Korea, which was world number one, had an average speed of 15 Mbps.

India was ranked 17th globally in terms of attack traffic, with 1.16% of observed attack traffic, while the US held the first position with 22.85%.

During the last quarter of 2008 Akamai observed attack traffic originating DAR E from 193 countries.

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/INSEAD

ç 15 REASONS TO TIE UP WITH TIE CONTD. FROM PG 43

Findings of a Global Entrepreneurship Industry-specific forums

9

These focussed communities influence stakeholders by driving thought leadership. Their group sessions featuring open discussions on trends and opportunities with industry experts are delivered through panel discussions/speaker evenings or through other interactive formats.

TiE plans to launch and build umbrella special interest groups (SIGs) with tracks that encompass specific growth areas such as technology, media, con-

sumer businesses, clean technology and infrastructure needs.

Encourage women entrepreneurship

10

‘TiE Women’ is a forum for women entrepreneurs to share thoughts, experiences, challenges and opportunities. It is also a forum that creates trust-based partnerships through active networking. Speaking of the Stree Shakti conference to be held as a mega event in Mumbai in

Monitor (GEM) study revealed that while 300,000 women wished to become entrepreneurs, they lacked the means, encouragement or platform to establish or scale up October this year, Manak explains the underlying reasons behind this initiative, “TiE doesn’t believe in gender differentiation amongst entrepreneurs, but the ground reality is that even in Mumbai, we had only eight women entrepreneurs in 2006.” This was in line with the findings of a Global Entrepreneurship Monitor (GEM) study that revealed that while 300,000 women wished to become entrepreneurs, they lacked the means, encouragement or platform to establish or scale up. Stree Shakti is a heterogeneous

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/INSEAD

With a world-class faculty comprising TiE charter members globally, TiE Institute is based on caseled, experiential executive education. Instructed by charter members, largely industry leaders, this TiE Education initiative is committed to developing holistic, value-centered business leaders

Entrepreneurs’ University

12

TiE Institute in Bengaluru, is modeled on the lines of the TiE Institute in Silicon Valley. The workshops and courses offered by the TiE Institute are designed to provide immediate and practical value to budding entrepreneurs by allowing them to take away ideas that they can imple-

ment in their ventures. With a worldclass faculty comprising TiE charter members globally, TiE Institute is based on case-led, experiential executive education. Instructed by charter members, largely industry leaders, this TiE Education initiative is committed to developing holistic, value-centered business leaders.

Youth programs

11

TiE has collaborated with leading entrepreneurship organization, Kauffman Foundation to roll out new initiatives for young entrepreneurs in the near future.

Courtesy: TiE Mumbai

forum chaired by women achievers to tackle the socio-economic issues faced by women entrepreneurs. It will be chaired by women achievers to encourage a sense of belonging amidst aspiring women entrepreneurs.

Panel discussion on ‘Igniting Minds’ MAY 2009 65

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Industry specific forums

66

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/INSEAD

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/INSEAD

The Microsoft advantage

13

TiE and its global sponsor, Microsoft have rolled out the BizSpark program, providing young startups free access to Microsoft software and technical support. Startups that are established by TiE Members and Charter Members can enrol in the program. Other eligibility criteria specify that startups should have been in business for less than three years, actively be engaged in building a software-based product or service (even using open source code) and that their annual revenue must be below US $1 million.

The participation of startups in Microsoft BizSpark will last as long as three years from the date of enrollment, unless they choose to exit the program early (or go public or are otherwise acquired). Renewal in the program is annual. Microsoft will assess a US $100 program offering fee when the startup exits the programs.

“TiE acts as a finishing school”

14

Pravin Gandhi, who oversees TiE-Mumbai chapter’s affairs and finance shares, “There are many stages in an entrepreneur’s life, all requiring

different skills sets and different resources. So while people can learn the theory in schools, TIE acts as a finishing school, helping the entrepreneur “graduate” from one stage to another in a seamless manner.” Adding to that, Singh says, “TiE promotes models of thinking. The entrepreneurial mindset has been one of survival entrepreneurship, while the challenge and opportunity moving forward is to shift this mindset towards one of choice entrepreneurship given the sheer depth and breadth of the market matrix.”

TiE global charter members (GCMs) are distinguished individuals like Vindi Banga, Vinod Khosla, Anand Mahindra, Kiran Mazumdar-Shaw, Aditya Mittal, Narayana Murthy, Shiv Nadar, Nandan Nilekani, CK Prahalad, Kanwal Rekhi and Arun Sarin, to name a few

Result-oriented networking

15

TiE goes beyond frivolous business-card exchanges and the success of entrepreneurs (a few of which are mentioned below) reiterates this fact: • Jitender Kohli (Electronic Tender) met his funding objectives due to the TiE’s efforts in connecting him to his angel investor.

• Vipul Prakash (Elixir) got access to several clients that led to a good amount of business, largely due to the efforts of TiE-Delhi chapter.

• Sameer Guglani (Madhouse) and Rakesh Sharma (Opelin) met their angel investors through the TiE

platform. Both companies have now been acquired by SeventyMM and HP respectively.

• Rohit Agarwal ( TechTribe) received funding from Canaan Partners post his participation in the deal flow session held at TiEcon DAR E Delhi 2006.

With her rich media background, Irawati Gowariker has led strategic communications for the IT arm of HSBC and ANZ in India. Irawati now 'dares' to go beyond large multinationals to tell the story of some Indian entrepreneurs.

Philip Anderson is INSEAD Alumni Fund Professor of Entrepreneurship, Director, Rudolf and Valeria Maag International Centre for Entrepreneurship and Director, 3i Venturelab.

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opportunity/services Types of Cases 1

Pre-matrimonial and postmatrimonial cases

2

Missing persons

3

Surveillance

4

Antecedent verification

5

Creditworthiness of individuals and companies

6

Industrial espionage

7

Infringement of trademark and copyright

8

Investigating frauds

9

Criminal cases: Murder, extortion, blackmail, threat, etc.

10 Devising winning strategies for political parties and individuals during elections 11 Fingerprint and handwriting verification 12 Due diligence and risk analysis

Lucrative Opportunities in Spying!

Private detective agencies have sprung up all over India. They are involved in solving all sorts of personal, corporate, and criminal cases. They are also helping political parties and individual candidates devise winning strategies during elections. /Ambrish Jha 68

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opportunity/services

I

f you think Sherlock Holmes exists only in fiction, and detectives emerge victorious with flying colors only in films, it is time to do a quick rethink. Private detective agencies do exist in real life as well, and they are helping their clients unravel mysteries of all sorts. More than 500 such agencies are operating in India at present, and these are based not only in bigger cities, but also in smaller towns. While the job of detectives is full of challenges, it is also quite paying. They charge different sums for providing different kinds of services, ranging from Rs 5,000 to several lakh, and one may come across agencies solving cases for poor clients almost free of cost as well. How soon a detective agency is able to make its mark and start getting referrals depends a lot on how much it is able to satisfy its initial clients. There is no definite formula; nor are any special qualifications required to serve as investigators in detective agencies. What is required is intelligence and a curious bent of mind. Networking, however, holds the key to success in almost all cases any detective agency takes up.

Types of cases and modus operandi Detective agencies in India usually get two different kinds of cases – personal or corporate – though some agencies do take up criminal cases as well. Personal cases are far more than other types, but certain agencies having better contacts in the corporate field and get more corporate cases. Taralika Lahiri of National Detectives & Corporate Consultants, for instance, gets more corporate cases, but Ashish Mathur of Delhi-based Trident Sleuths and V. Kuluthunga Cholan of Detective International get more personal cases. Cholan gets criminal cases on a regular basis, and sometimes the police also seek his help. Mathur, on the other hand, does not take up criminal cases. Personal cases are mostly related to matrimonial issues, but may also involve finding missing persons.

Corporate cases are of different kinds, pertaining mostly to verification of antecedents of employees. Howev-

er, these days corporate sector clients are hiring agencies to do asset assessment or verification of companies they may look at as possible targets or plan to enter into some sort of agreement with, as Lahiri reveals. Due diligence and creditworthiness of an individual or a company, industrial espionage, checking out infringement of trademark and copyright, and investigating frauds and cheating cases are some other issues over which the corporate sector hires detectives. Lahiri handles a lot of cases where corporate clients want to get a pulse of the counterfeits in the market and get hold of those involved in producing these. Corporate cases, thus, require not only surveillance, but also services of experts from law, accounts, and other fields.

Besides the usual personal, criminal, and corporate cases, some agencies like Cholan’s Detective International also help political parties or individual candidates make ‘winning’ strategies for the elections. They are hired by political parties to give a fair assessment of expected results. Based on these assessments, Cholan says, agencies can help devise strategies that can turn the tables on the opposition. He adds, “I did make correct assessment of seats for Jayalalithaa in the 2004 elections.”

Private Security Agencies vs Private Detectives An overlap is often seen in the functioning of private security agencies and private detectives.

Many members of the APDI are also the members of the Central Association of Private Security Industry (CAPSI). There is an overlap, yet there is a difference between the two. Private security agencies have often an investigation division within themselves, and this is why they take up cases similar to detective agencies. Detective agencies, on the other hand, have no security division, and they limit themselves to cases pertaining to investigations and surveillance alone. But the two associations work in tandem with each other.

Most of the personal cases involve surveillance and tracing particular individuals. This makes it mandatory for the agencies to equip their employees with hi-tech gadgets, though these are probably not as sophisticated as those used by the heroes of reel life. However, an investigator still needs different kinds of cameras and recorders to gather evidences in personal and corporate cases. These cameras, which

You can start with whatever money you have.

Rs10 lakh should be enough, or even Rs 1 crore can prove too little.

— V. Kuluthunga Cholan Detective International MAY 2009 69

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opportunity/services ago. But now there is a plenty of work in the field. There is no need to spy on each other. We, in fact, assist each other quite a lot,” Lahiri says, something Cholan also confirms.

Most agencies, wherever they are based, are prepared to take up cases anywhere in India. For instance, if a case originating in Delhi requires investigation in Cochin or Ludhiana or Vijaywada, the responsibility of investigation is passed on to an agency based in these cities. This process helps agencies create work for each other.

Some detective agencies, as both Cholan and Lahiri say, do take up overseas cases in countries like Canada, the US, the UK, and Japan. They have links with agencies based overseas, and they network in the same manner as they do in cases in India.

Lahiri says, “My agency gets works from US-based people for investigations in the US itself. We do accomplish these cases through our counterparts based in the US. We provide them similar services in India whenever they need it.”

How to start

My agency gets works from US-based people for investigations in the US itself. We do these cases through our counterparts based in the US. We provide them similar services in India whenever they need it.

— Taralika Lahiri National Detectives & Corporate Consultants can be fitted in pens or wristwatches, cost anything between Rs 20,000 to a lakh, or even more, Mathur reveals.

The price of recorders used by detective agencies vary depending on how tiny they are and what their duration of recording is. It can cost anything between Rs 3,000 and Rs 10,000. Debugging equipment are also used by these 70

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agencies to make sure someone is not spying on their clients. However, these are not sufficient to meet the demands of the corporate clients.

Detective agencies have solid networking among themselves. Cases of spying on each other does not exist any more. “This might have been the case more than seven or eight years

Opening a detective agency does not require a huge investment, nor is there any special legal provision for it. What it requires is an office space, a few employees, technical gadgets in the form of cameras and recorders, a website, and good promotion of the website along with some print advertisement.

Office space, Lahiri says, is preferable in a commercial are, though a cheaper space is good enough to begin with.

She says a capital of Rs10 lakh should be enough to open a detective agency.

Cholan agrees. He says, “You should start with whatever money you have.

Rs10 lakh should be enough, or even Rs1 crore can prove too little.”

An agency gets assignments if the main person behind it has prior experience and proper contacts in the field.

“Networking is the key to having more business,’ Lahiri says.

If an agency is new and the person behind it is also fresh, it normally takes at least six strenuous months to start getting assignments. It is impor-

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opportunity/services tant to accomplish assignments to the satisfaction of clients, as agencies get a lot of work through referrals. However, if contacts are right, one can start even alone, as Lahiri did in 1994, and Cholan in 1980. Lahiri, nevertheless, recommends five to six employees on the payroll to begin with. Salaries start anywhere between Rs 5,000 and Rs 10,000, depending on experience.

It can go up to Rs 25,000 to 30,000 for senior employees.

Freelance investigators may be hired on case-to-case basis as well, and when it comes to specialists like computer wizards or accounting experts, these are usually on a contractual basis. They can get payments based on their jobs and the period for which they are hired.

Thus, they can get upwards of a lakh for working on a particular case, or just a few thousand for working a few days in cases requiring lesser involvement. No specific qualifications are required to become an investigator, and it should be no surprise to see an aeronautical engineer or a marketing person running a detective agency. However, courses honing graduates in the skills of investigation are now available in India. One can get a job as a junior investigator doing these courses, as Ashish Mathur reveals. The Association of Private Detective Agencies & Investigators (APDI) also runs a course for training newcomers in investigation skills.

Some agencies like that of Mathur hires people who have done this course, but it has not become popular so far, Lahiri says. Cholan, also vice-president of APDI prefers to train his recruits on the job itself. “It takes three months to train them fully,” he says.

Relationship with the police Detective agencies maintain good rapport with police, as they need each other’s support in different cases.

Cholan gets requests from police for assistance at times. But do investigators get arrested or ‘harassed’ by police? They do, reveal both Lahiri and Cholan. Investigators depend a lot on authentic cover stories for their presence in certain areas. Sometimes agencies also inform the police about

A Close Look Number of detective agencies in India

> 500

Types of cases taken by detective agencies

Personal, corporate, criminal, and innovating political strategies

Charge for different cases

From Rs 5,000 to Rs 600,000 or higher

Number of employees a detective agency can start with

5 or 6

Salary of an employee

Rs 5,000 to Rs 30,000 (for those on payroll);freelancers are hired on case-tocase basis and may earn Rs 1 lakh or more

Investment required to start an agency

> Rs10 lakh

the movement of a particular vehicle in a particular locality. This helps in getting away from tough situations.

However, detective agencies do ‘cultivate’ relationships with the administration and ‘manage’ these situations without much problems. Cholan, who has been running his agency for close to 30 years, is widely known by police personnel in Chennai, and this comes handy for his employees.

Ethics Being an investigator requires ethics of the highest standards. While undertaking espionage, investigators do collect vital information about a person or a company, which could be put to wrong use if the investigator or the agency the investigator is working for decides to do so. A few cases have indeed come up in the last few years where some clients have complained about being harassed or blackmailed by particular investigators. The APDI has taken note of this and has a set of guidelines to be followed by all agencies and investigators.

It has an ethics committee as well.

“Our very survival depends on maintaining ethics,” says Lahiri, who is secretary of the ethics committee of the APDI. “I vouch for my employees.

We are extremely careful in employing people for our assignments. But if someone adopts foul ways, we refer the matter to the police directly.”

Lahiri says the if a member of the APDI should be found involved in such cases, they will be debarred from the association. Cholan also vouches for

his employees and says there are no other means but to complain to police about investigators breaking ethics.

Future Thanks to the need for their services by both individuals and the corporate sector, the number of detective agencies are set to rise in the future.

There are, however, no specific regulations for the sector, and this proves disadvantageous, as Cholan says. It dissuades many agencies from taking up criminal cases, as in the absence of specific regulations, they cannot be armed. Agencies do need to keep cordial relations with the police to manage difficult situations. It is probably time for India should put into affect a law to regulate detective agencies and investigators. This may be around the corner, considering political parties have also started hiring such agencies, and that too in assessing their winning chances and in devising strategies that can help them win.

Despite all the hurdles, this field attracts a number of people. They take up the profession more for satisfaction and adventure than anything else to begin with, but after some time start earning quite handsomely as well. Demand for the services of detective agencies are, after all, growing at a rapid pace. The sector in India is slowly opening up and their profile is growing. Many have active contacts with similar agencies in different parts of the world, reflecting the immense DAR E opportunities the field has.

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opportunity/technology

Opportunities in Nanotechnology Mainstreaming of this area is expected to result in paradigm shifts in various fields, from agriculture, environment and energy to medicines and diagnosis.

More than 600 nano products are already available in the market, even though the technology is still in nascent stages

A gear chain with a mite approaching. Source: mems.sandia.gov

/Ambrish Jha

C

an you imagine gold in a different color? Perhaps not, but this is possible, courtesy nanotechnologyâ&#x20AC;&#x201D;the technology that has made it possible to not only reach the molecular scale of a material, but also manipulate it at this level. Nanotechnology, hailed as the next big revolution in the field of technology after IT and biotechnology, has enormous opportunities emerging in this area.

Nanotechnology exploits the fact that all materials at the molecular scale (1-100 nanometers [nm]) behave differently from when they are in larger form (a nanometer is equal to one billionth of 72

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Market Size Estimates a meter). Nanomaterials have proved to be stronger, lighter and better conductors of electricity and heat. Nanopaint, for instance, does not allow dust to stick to its surface and will last for more than 100 years. With over 600 nanoproducts already in the market worldwide, the market for nanotechnology is growing, and is expected to touch US$1 trillion by 2015. Some Indian companies like Dabur, Nanoshel, MoserBaer and RGe have taken the lead in doing research on nanotechnology. UK-based Cientifica, a leading nanotechnology research firm, estimates that governments and companies across the world will start

Global (US National Science Foundation)

(in US$)

1 trillion by 2015

Global (Lux Research)

2.6 trillion by 2014

India (ReportLinker)

100 million in 2008

making an annual investment of over US $4 billion a year by 2010.

Nanomaterials and their properties Materials with nano-sized particles, that is, articles up to 100 nm in size, embedded in them are referred to as nanomaterials. Nanomaterials inherit characteristics of nanoparticles and ex-

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opportunity/technology hibit property enhancements like improved ductility, tensile properties and resistance to tear. Nanoparticles have a much greater surface area to volume ratio than their conventional forms and their quantum effects are also much different from when they are larger.

Nanomaterials, which can be of various shapes and forms, can be nanoscale in one dimension (as in surface films), two dimensions (as in strands or fibers) or three dimensions (as in particles). They can be classified into carbon -based, metal-based, dendrimers and composites. Carbon nanomaterials can be spherical or ellipsoidal or can be in the form of tubes. Spherical and ellipsoidal ones are referred to as fullerenes, while cylindrical ones are called nanotubes. Metal-based nanomaterials include quantum dots (Qdots), nanogold, nanosilver, and metal oxides like titanium dioxide. Nanocomposites are a combination of nanoparticles with other nanoparticles or larger bulk-type materials. Dendrimers are nanosized polymers seen as possible nanocarriers to ensure an effective delivery of drug to the specified cell.

Nanoproducts can be seen on sale in market in the form of wrinkle-free and stain-resistant textiles, longer-lasting paints, flash drives with huge memory spaces, sunscreens giving better protection against UV rays, longer-lasting tennis balls, and nano toothpastes.

Samsung has introduced refrigerators, washing machines and air-coolers that use nanotechnology. According to the consumer product inventory maintained by the US-based Project on Emerging Nanotechnologies (PEN), the number of consumer products using nanotechnology has grown from 212 in March 2006 to over 600. According to PEN, over 60% of these products pertain to the field of health and fitness, which includes cosmetics. Nanoscale silver, according to PEN, is the most cited nanomaterial. Of the various products on its inventory it is found in over 20% of them. Carbon-based nanomaterials— carbon nanotubes and fullerenes—are the second most cited.

Applications With nanomaterials widely available, a lot of options have opened up on the application side. Many projects promising huge dividends are ongoing in diverse fields, from electronics to medicine and from energy and environment to cosmetics and computers.

Application in electronics The electronics industry has always been obsessed with producing the slimmest of microprocessors that can compute at faster speeds. Technological impediments make it difficult to manufacture such miniature microprocessors right now. These obstacles

Nanotechnology Global Fact Sheet Annual investment per year on R&D by 2010

$4 billion

Investment made so far in nanotechnology R&D

$13 billion

Number of consumer products using nanotechnology

Over 600

Sector with highest concentration of nanoproducts

Health and fitness (over 60%)

Types of nanomaterials

1.

2.

3.

4.

Most cited nano materials

Nanosilver, carbon nanotubes, fullerenes

Minimum chip size available

32 nm (22 nm to be available by 2013)

Nanoparticle used to manufacture artificial heart valves

Nanocrystalline silicon carbide

Patents granted in nanotechnology (till 2004)

5,340 in the USA, 2,559 in Europe, 1,220 in Asia

Carbon-based: Carbon nanotubes, fullerenes Metal-based: Nanosilver, nanogold, Qdots Dendrimers Nanocomposites

can be overcome using nanotechnology. Manufacturers can use nanocrystalline starting materials to create microprocessors with ultra-high purity, better thermal conductivity and durability.

Speaking at the recently concluded Confederation of Indian Industry (CII) conference on nanotechnology, IBM’s Kota Murali said, “We have chips of size 45 nm right now. By next year chip size can go down to 32 nm.”

Intel is expected to put 32 nm chips into commercial production by late this year and be ready with 22 nm chips by 2013.

Nanotechnology can also be used to synthesize nanocrystalline phosphors, which can not only increase the resolution of electronic devices like flat-panel displays and televisions, but also reduce the manufacturing costs of these devices. Flat-panel displays constructed out of Qdots have been found to possess higher brightness and contrast than the conventional ones.

Application in energy and environment At a time when energy consumption is rising exponentially and fossil fuels are depleting, nanotechnology is seen as a panacea for all energy problems. Moser Baer’s Girirai Nyati says, “Next-generation energy devices have to be reliable alternative to fossil fuels, green, affordable and must have grid parity [selfsustaining without any government support].” For such energy devices, Nyati is looking towards nanotechnology.

It is quite possible that nano-based solar cells and fiber nano generators will turn into a reality in future, as companies like Moser Baer are working on prototypes. Nanotechnology can help develop better three-dimensional insulating materials called aerogels, which, if used in offices and homes, can help save power. They can also be used to manufacture high energy density batteries. Nickel-metal hydride (Ni-MH) batteries made of nanocrystalline nickel and metal hydrides are also being seen as alternatives to conventional batteries. These will require far less recharging and last much longer because of their enhanced physical, chemical and mechanical properties.

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opportunity/technology ion that nanomedicines were going to dominate the medical field in the next ten years.

Another area where nanotechnology can play a pivotal role is cancer treatment, both in its early detection and treatment. Dr Pradeep Jai Singh of International Oncology Services said at the CII conference that Qdots can be an effective tool for monitoring cancerous cells and providing a better understanding of their evolution. These can help detect cancer at early stages.

Other applications Source: mems.sandia.gov

Nanotechnology: Scene in India Government agencies supporting nanotech

Department of Science and Technology, Department of Scientific and Industrial Research, Department of Biotechnology

Year of launch of Nano Science & Technology Initiative (NSTI) 2001 Chairman of NSTI

CNR Rao

Amount earmarked for investment in between 2006 and 2011

Rs 1,000 crore

R&D expenditure by central government in the last five years

US$ 50 million

Locations for nanoscience and technology institutes

Mohali, Kolkata, Bangalore

Investment on setting up the first nanoscience and technology institute in Mohali

Rs 142.45 crore (to be set up during 11th Plan period)

Investment by Intel for nanotechnology R&D in India

US$ 250 million

Research into automobile catalytic converters and power generation equipment where nanomaterials can act as catalysts to react with toxic gases like carbon monoxide and nitrogen dioxide rendering them harmless are at advanced stages. This can help cut environmental pollution arising from fossil fuels in different forms. Ashok Bhaskarwar of IIT Delhi looks at the possibilities of electrodes and super capacitors being made from nanomaterials. A prototype spark plug design called railplug is already in place. It is stronger, harder and more wear and corrosion-resistant compared to conventional spark plugs. Bhaskarwar also talks of the possibilities of hydrogen storage through carbon nanotubes as a source of energy.

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Medical Application Nanomaterials can have wide applications not only in making nanomedicines, but also in diagnosis and in manufacturing better medical implants.

Nanocrystalline silicon carbide (SiC), for instance, can be used to manufacture artificial heart valves, which are lighter, stronger, harder, wear-resistant and most importantly, do not react with biological fluids. Nanorobots, to help in treatment at a cellular level, are seen as possible in the future and is likely to bring about a revolution in the medical field. Currently 90% of medicines do not go to the affected cells, as S Mokhapaty of the Indian Council of Medical Research (ICMR), pointed out, speaking at the CII nanotechnology conference. He was of the opin-

Nanotechnology can have other applications. Carbon nanotubes, for instance, can be applied in plastic, water purification, cosmetics, computer discs, textiles and bleach-making, says Abhishek Gupta of Nanoshel, one of the companies into manufacturing nanotubes. The technology is being used to manufacture sensors like smoke detectors, ice detectors on aircraft wings and automobile engine performance sensors. Carbon nanotubes can be used to develop nuclear, chemical and biological sensors also, as Dr Dipankar Banerjee of the Defense Research and Development Organization (DRDO) says. This can prove useful not only during wars, but also against possible militant threats. The technology, Banerjee says, can be used to manufacture sensors to detect minutest traces of other explosives as well. The DRDO is also using nanotechnology in the field of stealth and camouflage operations.

Nanomaterials are being applied to increase the fatigue life of aircrafts.

Experimental results have proved encouraging as an increase in fatigue life by 200-300% has been registered. Research is also on to apply nanomaterials to make high-power magnets that can find use for a variety of purposesâ&#x20AC;&#x201D;from making quieter submarines, automobile alternators to land-based power generators, motors for ships, and magnetic resonance imaging (MRI) in medical diagnostics. â&#x20AC;&#x153;It can take anywhere between five to 20 years for these applications to come out of research labs to markets,â&#x20AC;? says Prof. Kurt E Geckeler of

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opportunity/technology the Gwangju Institute of Science and Technology, South Korea.

Apart from nanoparticles, Bhaskarwar finds nanofibers to be quite promising as well. These are made from nylon, polystyrene, polycarbonate and other polymers through the electrospinning process. They can measure anything from ten to several hundred nm, and are suitable for a various applications, ranging from air filtration to medical products and from consumer products to electronics.

Market size Nanotechnology enthusiasts have gone on to make a number of predictions about its market size. The US-based National Science Foundation’s has predicted that the nanotechnology market may touch US $1 trillion by 2015. Speaking at the CII nanotechnology conference in New Delhi, Lalit Bharadwaj of the Central Scientific Instruments Organization said he would not be surprised to see the market cross US $3 trillion by 2015. According to Lux Research, sales of products incorporating nanotechnology will rise from less than 0.1% of global manufacturing in 2004 to 15% in 2014, totaling US $2.6 trillion.

According to ReportLinker, Indian nanotechnology is estimated at US $100 million as of now, and is estimated to grow at over 35% per year.

However, going by the figures as of now, these predictions seem unlikely to become a reality, and it's no surprise these have been dismissed as pure hype by experts, alleging they are based on a highly inflationary data collection and compilation methodology. .

“Nano has become a brand value in itself. There is a new tendency to use ‘nano’ with whatever you manufacture,” says T Ramasami, secretary to Department of Science and Technology. Many, including Ramasami, allege that while calculating the market size people include every product that has anything to do with nanotechnology, however minuscule they may be, adding up the entire value chain. For instance, a medicine worth US $100 may have 10 cents of nanoparticle in it. But

Source: mems.sandia.gov

Issues Materials at a nano scale behave differently and need to be studied separately. Nanomaterials are human-made and concerns have been expressed that free nanoparticles inhaled or ingested can cause damage.

Some doubt the veracity of the claims by cosmetic manufacturers that nanoparticles in cosmetics do not penetrate the skin. It is also feared nanoparticles can enter the food chain and affect plants and animals.

The UK-based National Academy of Science has, therefore, asked to label these free nanoparticles as new chemicals and to conduct a study into potential hazards arising out of these.

The use of small sensors and powerful computers can lead to greater personal security and safety, but at the same time these very technologies can also be used to spy on people and raises concerns about civil liberties.

More than US $13 billion has been invested on R&D activities in nanotechnology, but not even a fraction of this is being spent on examining the potential environmental, health, and safety risks. while estimating the market size of nanotechnology, it is counted as US $100.

Some companies, as Tata Consultancy Services (TCS) executive vice-president M Vidyasagar says, are not finding the market lucrative enough to commit to commercial production.

Government support Vidyasagar considers government support vital in the field of nanotechnology. As capital costs and time required for the success (or failure) of a project is huge, he says, “Innovative PublicPrivate Partnership (PPP) models have to be evolved to keep the interest of

private partners alive in nanotechnology projects.”

Three government agencies, the Department of Science and Technology, Department of Scientific and Industrial Research and Department of Biotechnology, have come forward to support nanotechnology programs in the country. According to official figures, the government has spent US $50 million over the past five years to promote R&D in this area. R&D in India are going on at the top 20 premier institutions thatinclude the likes of the Indian Institute of Science, Jawaharlal Nehru Center for Advanced Scientific Research, Indian Institute of Technology and universities like Anna University and University of Delhi. Nano science and technology institutes are also coming up at three places—Mohali, Kolkata and Bangalore. Industries, however, apart from a few, have not shown keen interest in investing on R&D in nanotechnology ignoring appeals made by different nanotechnology institutes. Some like Intel have pledged to invest US $250 million on this front in India.

Conclusion Nanotechnology is a new science and it is a capital-intensive one. It requires an equal partnership of private and public players. Private players have responded positively as can be proved by the presence of over 600 nano products in the market. This is further supported by the increasing number of patent applications seen in the field. According to a 2007 report by Ernst & Young, about 5,340 patents had been granted till 2004 in the USA, 2,559 in Europe, and 1,220 in Asia. Nanotechnology is actually seen as an elixir to overcoming several life-taking human diseases on one hand, and can also help increase crop production on the other. Together this seems a perfect recipe for the advancement of humankind. Governments across the world have also been supportive and India is no exception What is needed is more encouragement to industries to not only invest in research on their own, but also participate with research agencies at the university level DAR E to get the best of results.

MAY 2009 75

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opportunity/banking

Managing ATMs Fast-expanding banking facilities in rural areas and small towns, growing number of bank card users, and supportive RBI policies are boosting the growth of the ATM business /Amit Panday

R

emember the days when queuing up at the cash counter of a public sector bank to even withdraw a Rs 100 note from your bank account was the norm? When sudden power failures or the cashier going away for a tea break kept several clinging on to the teller window in anticipation? Well, things changed slowly, but slowly for bank customers after the introduction of automated teller machines (ATMs) in India in 1987, when HSBC Bank installed the first such machine in one of its branches in Mumbai.

The launch of ATMs was milestone in the country’s banking system, and today we cannot imagine our lives without this piece of technology. It is now increasingly percolating to rural areas and small towns, even as they dot nooks and crannies of big cities.

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While we withdraw money from these machines almost daily, we hardly think about what goes into manufacturing, maintaining, and managing the ATM machines and kiosks. About what makes this industry a shining example of India’s liberalized economy.

Quick Facts on ATMs ä According to estimates, there are 1.7 million ATMs in the world. ä It is believed that a new ATM is installed every five minutes globally. ä India has around 40,000 ATMs.

The business of managing ATMs Managing ATMs involves a wide range of services that are provided to banks by various specialist companies to keep customers satisfied. It is not just the deployment of the ATMs for the respective bank; there exist innumerable other services like installation of support devices like generators and UPSs, their maintenance, installation and configuration of networks and switches, VSAT devices for ATM-Bank-ATM or other types of communications, es-

ä Public sector banks alone have around 30,000 ATMs in India. The rest belong to the private sector and foreign banks. ä Deployment of an ATM requires an investment between Rs 6 lakh and Rs 10 lakh. ä Canada has 532 ATMs per million people, Hong Kong 402, China 66, while India has only 40. ä 30 percent of ATM transactions are non-cash. ä The ATM industry is projected to witness a CAGR of over 18 percent by 2013.

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opportunity/banking Opportunity Areas • Manufacturing • Managing • Network services • Field services such as security and cash transactions • Manpower training and recruiting tablishing and managing data centers, cash forecasting, reconciliation, transactions processing, managed services, and much more.

To simplify, beyond manufacturing, site implementation and installation of ATMs, the services in this industry can be divided into four main categories: 1. Transaction process: This includes management of transactions with due authentication. This involves managing the chain of communication 24x7 through switches from an ATM to the bank and its core services to cross-check with the account details of the person using the machine, verifying and authenticating the identity, and allowing the customer with go ahead signals back to the ATM. 2. Managed services: As we know, there are several other entities involved apart from the ATM in the given space: AC, the generator, the UPS, the electronic camera, furnitures and fixtures, lighting, etc. Monitoring of all these entities through different vendors comes under managed services. A proper back office is required, along with other crucial services under this category, like managing technical faults, troubleshooting, and providing the bank with information like location-wise cash forecasting for ATMs, and accounting and reconciliation.

3. Field services: These include cashin-transit, vaulting, providing physical security, site maintenance with first and second level of servicing, and housekeeping activities. Firstlevel maintenance (FLM) includes resolving light problem areas pertaining to equipment like currency jam, receipt jam in the machine,

ACs, lighting. Second-level maintenance (SLM) goes into more serious technical issues with the ATM blockage, repair work of UPS, machine failure, and repair of VSAT devices.

4. Asset-related services: Banks prefer outsourcing these services to companies that offer packages for managing their ATMs and providing end-to-end solutions. There are two motives behind this. First, the banks can concentrate on their core functions of banking services rather managing IT infrastructure and troubleshooting. Second, outsourcing assets like an ATM, furniture and fixtures, ACs, generators, etc, is a more economic option than owning the required assets. Service providers further delegate the work to other respective vendors.

For example, a service-providing agency delegates the order of ACs to an AC manufacturer/vendor; for electronic/physical security, it is delegated to security providers; and so on.

These categories and services may be perceived differently by different work profiles. Hence, the placement of services are subject to the general understanding of ATM managing services. “Product-related services that include first- and second-level maintenance services and field-related services occupies around 99 percent of a bank’s demands of outsourcing,” says Sathyan P. Gopalan, managing director, Wincor Nixdorf, a Germany-based ATM manufacturer-cum-manager.

In an ideal situation, the bank finalizes the area/location for an ATM installation, but for an ATM OEM the standard prerequisites are: basic shape and size of the room, for example, 8x10 sq. ft area, height of minimum 7 ft, AC outdoor unit permissions, society and municipality approvals, etc., says Gopalan.

These parameters are location-dependent factors and hence the cost will vary accordingly , he adds.

The ATM market ATM deployment requires substantial capital investment. This can be regu-

Manufacturers/Managers Company: NCR Corporation Services: Manufactures and installs ATMs, manages the ATMs, etc.

India headquarters: Mumbai ATM manufacturing facilities in India: Pudducherry, Bangalore Company: Diebold Systems Services: Manufactures and installs ATMs, manages the ATM’s, provides with physical/electronic security, etc.

India headquarters: Mumbai ATM manufacturing facility in India: Goa Company: Wincor Nixdorf Services: Manufactures and installs ATMs, manages ATMs etc.

India headquarters: Mumbai

Service Providers Company: Euronet Services India Main services: Complete ATM management India headquarters: Mumbai Company: CMS Computers Main services: Cash processing, cash management, cash-in-transit, vaulting, first-/second-line management, electronic/ physical security, ATM management, etc.

Headquarters: Mumbai Company: Brink’s Arya Main services: Cash management, vaulting, electronic/physical security, etc.

Headquarters: Mumbai Company: Writer Corporation Main services: Cash management, transit services, maintenance, electronic/physical security, etc.

Headquarters: Mumbai Company: Security and Intelligent Services (India) Main services: Vaulting, cash-in-transit, electronic/physical security, etc.

Headquarters: New Delhi Company: Premier Shield Main services: Cash management, vaulting, processing, transit, electronic/ physical security, etc.

Headquarters: New Delhi MAY 2009 77

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opportunity/banking

Pradeep Kumar Sampat, Director – Sales, Euronet Services What comprises ATM management?

ATM Management involves giving the customer transacting at the ATM a seamless experience to successfully complete the transaction. A bank has to look into many aspects starting from the place where the ATM needs to be deployed as it should be closer to customer clusters. It should be neat and clean, with ample lighting.

In our country, given diverse weather conditions, ACs need to operated in the lobby and the back rooms to provide ambient temperatures for both customers and machines. Adequate power backup facilities are needed given the power conditions.

Maintenance and repair of the site for wear and tear is also required. Providing security services to keep unwanted elements out are important from the customer’s standpoint. In the back office one has to have a robust monitoring system with predictive error-handling facilities that can help the company troubleshoot even before a problem occurs. Downloading of screens for promotions from the bank; providing enough materials at the bank ATM site for customers to have access to the products/services offered by the bank; provision of reconciliation of transactions to customers; prediction of cash requirements and filling ATMs with adequate cash to ensure that no idle cash is present; repair and maintenance of all equipment at the site (ATM, UPS, AC, communication lines, etc.); and, more importantly, a common interface for all these agencies to coordinate and make sure that the ATM is up and running [– these are some aspects of ATM management that need to be looked into].

What about the generator, UPS, furniture and fixtures, security, cameras, etc.?

People look into the ATM machine and think that it is very easy to manage it, but as mentioned earlier, for the transaction to be completed, the entire chain needs to work seamlessly. Any weak link in the whole chain could pull down the transaction, resulting in dissatisfied customer. And not to mention that each component has a specific job to do at the ATM and if not done properly it will result in the failure of the transaction. This is why not-so-popular aspects also need to be taken care of with the same level of importance, and more than anything else it is a single agency that coordinates with all these touch points that can provide the proper customer experience.

What things are taken into consideration before setting up an ATM? What is the cost involved?

The place where the ATM premises need to set up should have sufficient parking space. It should have proper power connections, easy access to the site with proper lines of site for VSAT communication links, and most importantly it should be able to attract customers. If for some reason customers are not walking into the ATM, the bank is going lose money in deploying such ATMs. What are the difficulties that ATM management companies face?

The biggest difficulties faced by such companies are security issues and cash movement. For some banks making available the required cash to be deployed in the ATM is a challenge as these currencies are required to be ATM-fit. Unless they are, the transaction will not happen smoothly, and notes get stuck in the machine, causing it to malfunction.

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If that happens we need to coordinate with another agency to clear this currency jam, which will take some time. Also, given the infrastructure conditions and certain customer behavior, keeping the site clean is also one of the other challenges. At times it is seen that even cleaning the premises 10 times a day is not sufficient.

Last but not the least, because of the demographics and the vast area that these companies cater to, coordinating with agencies to make people available in the shortest span of the time is a big challenge.

What are the growth drivers for the ATM management companies in India?

Simple growth drivers for these companies are growth of ATMs in the country and to some extent growth in the card base, which will result in more transactions as some companies charge the banks on a transaction-based model that is still evolving How is the ATM management business likely to grow in future?

Banks have already started discussing the need of a simple ATM, minimizing the requirements of ACs, UPS, security, etc., so that management becomes easier and more viable, and this could bring in new formats of ATMs and with lesser space for the premises.

Also, companies are putting more and more tools to reduce cost of operating ACs (like switching off ACs at night in the lobby when there are no customers, sending an alert if the UPS goes down, etc.). So in future we [should see] see less dependence on human resources for troubleshooting and providing customers with a nofrills ATM (earlier companies used to hire big spaces for ATMs).

How are ATM operations in India different from those in developed countries?

The trend is totally different in other countries as ATMs are deployed in retails spaces, malls, and even on the roadsides given the fact that they are clean, and also that they are simple and neat. Also, a lot of costs like security services are unique to our country and one cannot do away with it as it would increase thefts and vandalism in the ATM premises, which is not the case in other countries.

Will the new rules on seamless ATM usage across banks affect ATM deployment?

It is a very good move from the central bank to make transactions free to the end customer as this will help dispersing transactions to all the ATMs in the country. Today there are some ATMs that are very crowded and other nearby ATMs not getting any customers. The RBI move will help in utilizing the entire network to a full capacity. ATM expansion plans may temporarily take a back seat for banks right now, and as the card base keeps growing and the banks find a costeffective operating model, there will again be a growth in ATMs. What are your company’s plans for this year?

The company is looking to garner a significant market share in the Indian ATM management space with its experience created over the past six years with multiple banks in the Indian ATM industry. [We would] also [like to] leverage the facilities created in India to serve customers in the Asia Pacific and Middle East region for crossborder processing.

DARE.CO.IN

opportunity/banking

in itself a huge opportunity. The biggest functional inter-bank network in India is the National Financial Switch (NFS). It comprises a national switch for interconnectivity between various banks’ switches for inter-bank ATM transactions, details of such payments through e-commerce, etc.

The NFS is managed by the Institute for Development and Research in Banking Technology (IDRBT), which is an establishment of the Reserve Bank of India. Being the largest ATM network in India, it presently connects 38,714 ATMs of 34 banks. The NFS was initiated as a mode to encourage ATM usage in India by connecting all the banks on a shared network. Euronet Services is the technology partner of the NFS. Some other prominent names in this space are BSNL, Cashnet, Cashtree and BANCS (belonging to the Bank of India), HCL Comnet, Bharti Tele-Ventures, and Tata Telecommunications.

Growth Drivers •

Existing large user base

• Low ATM density vis-à-vis population • Strong PSU banks • Growing retail banking • An ATM is a cost saver for banks’ cost of operations • Increasing card user base in India • Increasing banking facilities in rural areas • Urban/rural development, increase in literacy rates • Innovative value-added services • Customization and personalized services lated as per the mode of contract between the bank and the ATM managing parties. Heavy investment is required if the bank desires to own the ATM as well as other assets and manage it by itself.

This requires the banks themselves to hire technically skilled experts who can take care of such infrastructure.

The other mode, which is most prominent in current times, is outsourcing. Banks outsource the entire

thing, right from identification of locations for ATM installation and other services thereby. This is mostly done on a leasing basis for five years or more.

The number of ATMs deployed in India currently is around 40,000. Most of them are supplied by the globally reputed ATM manufacturers like the US-based NCR Corporation and Diebold Systems, and Germany-based Wincor Nixdorf. The manufacturers themselves also offer the solutions for managing the ATMs too. Then there are other service providers like Euronet Services, which offers the same set of services. Market growth is drawing more players in this space and each of them operates within their operational expertise. For example, a manufacturer of ATMs will delegate the network requirements to the network providers like BSNL, Bharti Tele-Ventures, and Tata Telecommunications to name a few, and security services from multiple security agencies.

Then there are the networks on which the ATM functions. The growing number of ATMs in India indicates the growing utilization of network connections. Hence, network structure is

Challenges • High cost of deployment • Lack of skilled manpower • Cost-cutting in the banking sector • Time-consuming process – procuring permissions, licenses, etc.

• Online banking • Demographics: Slow awareness of benefits through ATM usage • Unavailability of technical people at hand

Challenges Deployment of an ATM is an expensive affair, requiring an investment around Rs 6 to Rs 10 lakhs. This is excluding the costs that come thereafter while managing and operating it.

“Rural expansion of banks lead to ATMs being located in remote areas.

Availability of skill sets in those areas, transportation availability – which is not available for 24 hours – security concerns for travel, onsite call attendance, network/telecommunication issues, and power fluctuations are big DAR E challenges,” says Gopalan.

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blogs/opinion

An Entrepreneur’s Legacy D /Anurag Batra

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o Indian entrepreneurs think about a legacy? What is it that they are leaving behind for their investors, customers and heirs?

This is what Sergey Bin said when asked about legacy: “In terms of being remembered, I think I want to make the world a better place. That’s a pretty generic answer, but I mean it in several ways. One is through Google, the company, in terms of giving people access to information. I’m sure I will do other endeavors in terms of technologies and businesses. The second is just through philanthropy. I don’t have a significant amount of wealth beyond that on paper right now, but I hope that I have the opportunity to direct resources to the right places. I think that is the most important thing to me. I don’t think my quality of life is really going to improve that much with more money.”

What does an entrepreneur want? The answer to that question depends on the stage the entrepreneur is in his or her entrepreneurial journey—whether just starting out, or at a later stage in business.

At first, one is only concerned about making the business work ; then one concerns oneself with the growth of the business to a sustainable level; finally, after the business reaches a certain stage of growth that one starts to think also start to include long-term ambitions, ‘self-esteem’ needs and, finally, a legacy.

What is an entrepreneur’s legacy? Is it a drive to be remembered once they is gone, or to create tangible wealth for dependants, or a zeal to give something back to the world ? In some ways, it is a combination of all of these things and then some. An entrepreneur is remembered by the success that he or she has garnered in the business world, but many would prefer to be remembered as good human beings rather than just good businesspeople. Certainly, the most successful businesspeople in the world have

tried to create their legacies—Bill Gates has started the Bill and Melinda Gates Foundation to give back something to the world, as have Paul Allen, Warren Buffet and many others. These doyens have reached the pinnacle of success and have been driven by their need to create a legacy—something of them that will live on after they are gone.

But can a legacy be created, or is it something that emerges on its own? Most entrepreneurs believe that they are the creators of their own destinies (at least to some extent) and by that logic, they believe that legacies can also be crafted depending on the way that they wish to be remembered, or want their families to be benefited by it. But serendipity, too, plays a big hand in creating a legacy.

There have been people who started out to etch out a living, only to create something grand. Someone once said, “Don’t try to be a great man. Just be a man, and let history make its own judgment.” It is as good a credo as any while trying to create a legacy.

What constitutes a successful legacy?

How do you judge a successful legacy?

Does a Hollywood movie have to be made on the subject for it to be considered successful? It is an intriguing question, one for which there is no correct answer.

However, I believe that if the enterprise creates cognizable positive difference in the lives of many people and continues to grow even when the entrepreneur who created it is not actively managing it, it should be considered a successful legacy.

In some ways, every entrepreneur tries to create something of lasting value and those that actually manage to do so make successful legacies.

DAR E Anurag Batra is real life, first-generation entrepreneur who is Much Below Average (MBA) from the prestigious Management Development Institute, MDI. When he is not busy writing such columns, he can be reached at anuragbatrayo@gmail.com.

Anurag is the co-founder and editor-in-chief of exchange4media group which includes exchange4media.com.

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opportunity/bicycles

the Business of Bicycles

Driven by the perennial demand in rural areas, favorable government schemes and a booming childrenâ&#x20AC;&#x2122;s segment, the bicycle industry is on a roll /Amit Panday 82

MAY 2009

DARE.CO.IN

opportunity/bicycles ith the arrival of summer vacations in schools and colleges across India, it is boom time again for bicycle retailers. In a big city like Delhi, a retailer, on an average, sells 250 bicycles during the months of April, May and June. These are mostly in the children and teenager segment that for long has been a money-spinner for bicycle manufacturers. The sales figure in this segment could even touch the 500 mark, depending upon various schemes and discounts to lure customers. Add to this the standard bicycles, women’s bicycles, mountain terrain bicycles (MTBs), and so on, and you have a market large enough to be considered a huge opportunity.

W

cities,” according to the All India Cycle Manufacturers’ Association.

The Indian bicycle market comprises four major players—Hero, TI, Avon, and Atlas—who also export to the Middle East, Africa, the US and Latin America. Most of the big players started operations between the mid1940s to mid-1950s. The oldest and the largest one, Hero Cycles from the stables of the Hero Group, started as early as 1944, but stabilizes its production only after 1956. It has a 48% market share in the Indian bicycle industry.

Annual sales volumes of over 4.8 million makes it the largest bicycle manufacturer in the world. Hero Cycles rolls out around 18,500 units every day.

The Indian bicycle market

Growth drivers

The size of the Indian bicycle industry stands at US $1.2 billion. The number of units (finished bicycles including all segments) produced is around 12 million, according to an industry source.

Of this, the number of units exported annually is about two to three million, which points to a huge demand in the domestic market. According to figures from the Engineering Exports Promotion Council, in 2007-08 India exported bicycles and components worth US $185.42 million.

As against this, the global figure of manufacturing bicycles is around 130 million units. China is believed to be producing two out of every three bicycles made globally.

India is the world’s second largest bicycle manufacturer after China.

Big players in this business have the license to manufacture both bicycle frames and components, while small-scale manufacturers dominate the components market that includes pedals, chains, carriers, nuts and bolts, levers, tires and tubes, spokes, axles and mudguards.

Ludhiana is the hub for bicycle manufacturing in India. “More than 25,000 cycles per day are manufactured in Ludhiana alone. The city is home to over 1,500 factories making bicycles and components, providing employment to 0.25 million people and today it is a jewel in the crown of India’s industrial

The demand in rural India and small towns is one of the biggest growth drivers for the bicycle industry.

To put this into figures: a distributor/supplier of TI Cycles’ BSA and Hercules brand in Patna supplies more than 10,000 bicycles to all the nearby village areas, including the city on a monthly basis. “With no roads in place, no affordability, the bicycle is the most preferred option for commuting. One will hardly see motorcycles, scooters on the lanes here,” says Vikas Kumar Binjrajka of VV Marketing, a bicycle dealer in the Muzaffarpur town in Bihar. “Maximum demand is for standard bicycles here as they are the most trusted models. An average price of every unit sold here is around Rs 2,500.

On the other hand, an average life of a bicycle is three years. Hence, the demand for its spare parts is even more than the bicycle itself,” he adds.

The rural market is far from saturation. It is believed that the replacement market may generate annual sales of three million bicycles in the near future.

In the urban market, the children and teenager segment is growing very fast. “This segment has shown a healthy growth and is likely to continue growing in the future too,” says D Raghuram, Senior Vice President, Bicycles and Fitness, TI Cycles, the bicycle manufacturing arm of the Murugappa

Group. “The kids’ and teenagers’ segment is witnessing a robust growth.

The average price of a bicycle sold in the urban market is around Rs 4,000.

Prices depend on suspension, gears, accessories, etc, which all kids want in their bicycles,” says Kishen Das of Perfect Cycles, a retail shop in Delhi.

Another growth driver is environmental awareness. This is driving many in urban areas to choose bicycles as a mode of transportation in the neighborhood. The desire to adopt healthy lifestyles have also pushed this market up.

The super-luxury segment is now opening up for Indian customers. The launch of a Rs 2 lakh bicycle, by TI Cycles in partnership with Bianchi, an Italian bicycle manufacturer, is a case in point. TI Cycles estimates the size of this “super-premium” segment to rope in sales of over 5,000 units annually. These high-end bicycles will range between Rs 17,000 and Rs 2 lakh per unit. Hi-tech engineering and use of expensive materials like titanium and carbonfiber that absorb vibration for a smooth ride make these bicycles

Quick Facts • India is the second largest manufacturer of bicycles in the world, with 12 million units annually.

• In value terms, that is US $1.2 billion.

• Global bicycle production is around 130 million units. Thus, India produces a little over 9% of the world’s bicycles.

• China makes two out of every three units made globally. That is a huge 66%!

• Hero Cycles is the largest bicycle manufacturer in the world.

• Major exports are to the Middle East, Africa, the US, and Latin America.

• A bicycle dealer in Patna, Bihar, sells around 10,000 bicycles in a month.

• In 2007-08 India exported bicycles and components worth US $185.42 million.

MAY 2009 83

DARE.CO.IN New Age Markets • Electric bicycles • Fitness machines like exercycles • Innovative sports bicycles • Accessories like bicycle helmets, knee guards, elbow guards, sippers, shoes, tires, bells, fancy baskets and carriers for women’s bicycles.

Growth Drivers • Huge demand in rural India and small towns • Children’s segment • Government schemes for school-going poor children • Increasing health/fitness consciousness in urban areas • Requirements for zero-emission solutions for polluted traffic routes • Events to boost bicycle usage in India • India as a low-cost manufacturing hub • Higher density of suppliers and dealers

Challenges • Increasing demand/popularity of motor bikes • Rise in migration to cities • Long commutes to work in big cities • No dedicated cycle tracks in cities • High risk involved while commuting • Low awareness of cycling as a sport in India • Lack of funds for expansion of facilities • High costs involved in setting up quality manufacturing units • Competition from China and other low-cost manufacturing destinations • Rising prices of raw material such as steel and rubber 84

MAY 2009

opportunity/bicycles expensive. The high-end accessories market is also up for grabs. These include helmets, apparel and shoes.

“There are a lot of cycling enthusiasts in the country who are into serious cycling. There has been a gap in the availability of performance bicycles in the country for quite sometime. TI Cycles has filled this gap by introducing high-end bicycles from leading international bike manufacturers Bianchi and Cannondale,” says Raghuram.

Cannondale, a US-based sports bicycle manufacturer, has also made an entry into the Indian market.

Government schemes driving growth Most state governments have special schemes that involve gifting bicycles to people, mostly children, in the economically weaker sections of the society. Such is the impact on this industry that the government is one of the biggest customers for bicycle manufacturers. State governments invite tenders for supply of bicycles and the big players get to make the most of it.

The central and state governments are believed to have ordered around 1.5 million bicycles in 2008 to hand them over to poor children under various social welfare schemes. An industry source estimates that the figure could go up to 2.5 million units in 2009. States like Maharashtra, Madhya Pradesh, Bihar and Jharkhand are among those suppling bicycles free of charge to poor school-going children.

There are more such examples.

According to the Pudducherry government, “Due to long distance and shortage of transport facilities, poor students are in great need of bicycles to go to schools. By getting cycles, students need not walk more and hence energy is saved and more time is available to concentrate on studies and the students can also reach the school in time. By using the cycles, more work may be attended [to] in a shorter time.

Thus, a new scheme was formulated to distribute free cycles. In a year approximately 10,500 cycles (each cycle of Rs 1,385) are supplied to the boys and girls studying in IX standard in government and government-aided schools.”

The Assam government has made a provision for Rs 24 crore in 2008-09 for providing bicycles to about one lakh girl students living below the poverty line. The Haryana government has supplied bicycles to certain schools under the Sarv Shiksha Abhiyan scheme.

The bicycles are to be provided free of charge to those girl students who have to walk more than 2 km to school.

The Tamil Nadu government also runs schemes to encourage higher education among the Scheduled Castes/ Scheduled Tribes, Scheduled Caste converted Christians studying in classes XI and XII in government and government-aided schools, under which free bicycles are distributed to students.

Despite the slowdown, the bicycle industry is booming, thanks to government tenders for more bicycles. Even the second-tier suppliers and smaller vendors supplying to the big four are full with orders.

Bicycle events Several events are being organized across the country to increase awareness about the use of bicycles.

For example, every Republic Day, an annual cycle rally is organized in Pune by the Pune Cantonment Block Congress Sports Committee in association with the Ekta Mitr Mandal, a self-help group. It is a 22-lap cycle race with people participating from all over the world.

In Chandigarh an annual cycle day is observed by holding a cycle rally.

This is organized by the Chandigarh Tourism Department in association with the Society for Tourism and Entertainment Promotion.

A proposed event called Cycle India 2010 is also likely to give a big boost to this sector. This will be a week-long charity event that will witness worldwide participation. The event will start on January 3, 2010 from Mysore and will end on January 10, 2010 in Hyderabad.

Recent trends Within the bicycle industry, the standard model—which is recognized as the one usually driven by the labour class —dominates with a share of around

DARE.CO.IN

opportunity/bicycles

50%. This segment still has a huge potential for growth as this basic model is hugely popular. This is because this model is still used for commuting and transporting goods.

On the other hand, in urban areas there has been a shift of preference from standard models to other types, with urban consumers using a bicycle more as a means of fitness and recreation.

“Today people, especially urban adults, are becoming more and more aware of the consequences of global warming, health issues, pollution, and so on. As a result, it is observed that they are taking to greener modes of transportation like bicycles and electric scooters. Hence, there has been a considerable shift in the perception of bicycles from a mode of commuting to a recreation/personal mobility solution. This has been one of the growth drivers for the industry in recent times,” says Raghuram.

Alongside this industry, there are other extended products dominated by the accessories segment. The fitness segment, primarily with the exercycle, is becoming increasingly popular. An exercycle is an exercise bicycle with saddle, pedals and some form of handle bars arranged as on a bicycle, but is used as an exercise equipment rather than transportation. It is basically used for general fitness, cardiovascular exercise, during trainings for cycle events etc. Major bicycle manufacturers like Hero Cycles, TI Cycles and Avon also manufacture a fitness range. Electric bicycles (e-bikes) are also catching on in the cities. Avon is actively involved in its production.

“The spares market is estimated to be larger than the cycles. With the growth in specials category with gears,

In the urban market, the kids and teenager segment is growing very fast. “This segment has shown a healthy growth and is likely to continue so in the future too.

— D Raghuram Senior Vice President, Bicycles and Fitness, TI Cycles the demand for accessories will grow and will be an opportunity area in future,” says Raghuram.

Bicycle blues The Indian bicycle industry is also facing some challenges. The biggest dampener is the demand for motor bikes.

Changing socio-economic patterns, increasing purchasing power along with the available financing options, the middle class, lower middle class, and also to some extent the poor class has shifted their mode of commuting and transport to motor bikes in urban areas. Even school- and college-goers prefer riding their own motor bikes and scooters over a bicycle. The use of motor bikes is increasing in the rural areas too with better finance facilities and availability of these motor bikes.

In big cities, the increasing number of automobiles on congested road has made it riskier and more difficult to ride bicycles. With no option of separate cycling lanes, bicycle users in the urban areas face tremendous risks while commuting. Also, it becomes easier and much more comfortable to ride a motor bike than a bicycle in big

Major Players Hero Cycles

TI Cycles

Avon Cycles

Atlas Cycles

Started

1944

1949

1948

1951

Brand(s)

Hero

BSA, Hercules

Avon, Buke, Apsara

Atlas

Production (million units)

4.9

2.8

1.7

1.2

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cities where destinations are further away than in villages.

People from villages and small towns are moving to metros and other cities for work and this factor has translated in the long term to more people switching over from using bicycles to motor bikes.

Sources in the industry say that shortage of funds is another problem in this sector. Funding is not available to players who wish to expand their production units. And even if it is available, it is at a very high cost.

Other difficulties at the global level include the competition from China, besides rising steel and rubber prices.

Times to come It is expected that in times to come the bicycle industry is set to grow faster.

The replacement and the spare parts market is going to be a major thrust area. The accessories segment is also in for good times. However, demand in rural areas is likely to stay stable, yet good enough to support the existing growth.

In urban areas, the leisure market is yet to be tapped fully and there is huge potential here. The children and teenager segment is quite lucrative as well.

The All India Cycle Manufacturers’ Association wants the government to frame a policy to popularize the use of cycles in cities and towns, keeping in view the overcrowding of roads, increasing pollution due to auto vehicles and growth on import expenditure.

Congested and central areas in the cities and towns should be declared as cycle areas and entry of vehicles DAR E should be lawfully banned.

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Campus Company: The New Big Idea Mount Carmel College-Bangalore launches a unique startup on its campus

M

yriad Limited is housed in a small room with just the bare essentials: a table, some chairs, a desktop and several papers strewn all over. The three young girls crowded inside are talking shop —recession, expansion plans, an upcoming general body meeting.

A typical scene from a garage startup, you might think. Well, it is, but with a difference.

The unique factor that distinguishes Myriad from any other startup is—it is a ‘campus company’ of Mount Carmel College (MCC), Bangalore, and these girls are students who are engaged as company directors. Spearheaded by the MCC-NEN Entrepreneurship Cell, this startup is perhaps the first of its kind—built by the students, of the students and for the students.

MCC-NEN E Cell has twice won the coveted NEN Entrepreneurship Week India Championship Awards for organizing over a hundred entrepreneurshiprelated events during NEN’s week-long nationwide public awareness campaign. Myriad is its latest initiative to facilitate a real world entrepreneurial experience for students still in college.

Launched in September 2008, Myriad defines the making of a serious startup—complete with business plan, balance sheets, directors, shareholders, angel investor, Prospectus, Memorandum and Articles of Association. It deals with two independent products —chalks that are brand-named Scribble, and a youth magazine called MyriMyriad – The ‘employees’ of Myriad pose with the magazine

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ad. It has 22 employees, 525 shareholders, over 15 advertisers and a college full of customers. Six months into the business, Myriad posted a profit of Rs 5,000 for the first time in March 2009.

The beginning “Our MCC-NEN E Cell has been active in promoting entrepreneurship among the students. We wanted to do something big and long-lasting, so we

DARE.CO.IN reasoned—why not build a startup in campus itself? It was convenient, we had a ready market in our college mates, the risk was low and our college was ready to support us by introducing it as a credit course. So we went ahead with the idea,” reveals Director Aditi Nag, a third-year commerce student.

The MCC-NEN E Cell began by organizing an intra-college business plan competition, where students were invited to present sustainable business ideas. A panel of experts, comprising faculty, judged the entries. Ten ideas, including that of a photocopying shop, juice stall, food store and recharge counter were rejected due to market competition, low margins and too many regulations. Two ideas

finally made it—that of a chalk manufacturing unit and an advertisementdriven magazine.

Even though chalk manufacturing did not promise good returns unless it was produced on a large scale, it offered the students “a non-technical feel of production”. “We knew that chalk production was vulnerable to weather changes, had high wastage and ran the risk of becoming soft and brittle. However, we wanted to take it on and get our hands messy,” recalls Sylvia Pinto, another Director.

Myriad magazine, on the other hand, was a safer choice. It ventured to help marketers reach out to the youth directly and effectively. By making it a college-only magazine, and distribut-

ing it free of cost, Myriad focused on bringing the advertisers’ messages to as many youngsters as possible. Aditi Nag feels the feet-on-street experience of getting advertisers is giving the marketing team a true feel of business.

Starting up not a joyride, but worth the trouble Fund raising was the first challenge, reveals Sylvia. The chalk business needed seed money for training and raw materials and the publication didn’t promise advertising revenue till at least its first issue was out. So Myriad issued shares to college students and faculty at Rs 30 per share. It raised Rs 20,000 capital through sale of shares. NEN-Wadhwani Foundation

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Team Myriad with their angel investor Prof Vasanti Venugopal

Faculty Fellow and inspiration behind the MCC-NEN E Cell Prof Vasanti Venugopal pitched in as an angel investor, sponsoring the training of ten students in chalk-making and connecting them with the suppliers.

Meanwhile, the MCC management supported the magazine in the initial stages by providing Rs 10,000 as loan to meet printing expenses. The aggressive magazine team soon managed to rope in advertisers like Jealous Jeans, Reva, Wipro and Alliance Francaise.

Jealous Jeans was so enthused that they even sponsored the mega launch of the magazine at the upmarket Sigma Mall.

Another challenge was building the team. The E Cell members created job profiles and posted them on notice boards. They involved volunteers from MNCs like Wipro and IBM to conduct the group discussions and interviews of interested candidates.

They studied other startups to understand their hiring strategy. Myriad today has a finance manager, a 92

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purchase manager, a marketing team for Myriad magazine and a production team for Scribble. It has also appointed a commerce student as the Company Secretary.

Handling operations was a great learning experience for the Myriad team. The Scribble team worked after college hours on the campus terrace, manufacturing 300 chalk pieces a day.

The Myriad magazine team sometimes had to excuse themselves from class to attend a client meeting.

“We had to work for attendance, work for marks and work for the company to keep it running. I don’t know how many of us study everyday, but we work everyday. It’s not easy but it is exciting to run a company at such a young age,” shares Naina, Managing Director.

Meanwhile, Sylvia claims to have learnt a lesson in ‘friend management’.

Working under constraints and with limited resources, she has become more assertive and firm while dealing with her team, not excusing bad performance easily. Her colleague Jinal, a rather shy girl has now discovered her strong negotiation skills.

The way ahead: A startup of my own When Prof Vasanti recently asked how many from the Myriad team would start their own ventures in future, 16 out of the 18 present raised their hands. “I don’t look at Myriad as a student setup, we actually function as a full-fledged business. I would like to take my learning forward, and start a venture of my own,” shares Naina.

Prof Vasanti isn’t surprised with the reactions. “The experience in Myriad has been a revelation for students who are inclined to start ventures of their own. It has exposed them to various elements in the lifecycle of a startup.

The team has been part of the concept and starting-up phase, worked hard to make it run and the directors in their final year are now preparing to hand over to the oncoming batch. This hands-on exposure has matured them, built their confidence, made them analyze like serious entrepreneurs. Overall, with Myriad, the MCC-NEN E Cell has contributed to creating an ecosystem that will nurture similar ventures DAR E in the long run,” she says.

More articles on www.nenonline.org.

Content provided by NEN

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event/report

Online Ventures Rule Headstart Startup Saturday witnesses a mixed bag from diversified fields, but the theme was largely online

O

n the second Saturday of the month of April, four cities across the country witnessed Headstart Startup Saturday events.

New Delhi saw the fourth such event hosted at the American Center with around 60 participants.

First up was Sony Joy, co-founder and COO, Mobme. He spoke about how he started from scratch and followed his dreams. Mobme is a mobile media and entertainment startup. It enables users and businesses to share and broadcast rich mobile content on a platform easily accessible by users.

Mobme has setup two-way Bluetooth hotspots at more than 100 locations across India. He faced questions from the audience for around 30 minutes.

Next were Vineesh and Aniruddha.

They talked about their online venture Weboword. Their business is based on “visual vocabulary.” They were of the view that improving vocabulary would be simpler if one tried to understand the meaning of words visually.

They discussed requirements and exchanged ideas with the audience.

Third was Arun. A designer by profession, he works for Slide Share. He explained many critical aspects of design as a communication tool. He quoted some interesting examples from Twitter, Google, YouTube and, of course, Slide Share.

Organized at the S.P. Jain Institute of Management and Research, Mumbai’s Startup Saturday celebrated its anniversary. Professionals from varying horizontals like sales, marketing, human resources, legalities, and accounts and finance shared their expertise in relation to startups.

The first speaker was Ratan K.K. who talked about the role of human resources and issues related to it in a startup business. He touched upon the relevance of passion, belief, and motivation in driving a business idea. Next, Swati Khole, senior vice-president at CRP Technologies spoke about the basic concept of sales, covering the research aspects of finding prospective clients and value propositions.

Third to speak was Milind Agarwal, director of business development, SMS Gupshup. He highlighted some aspects of marketing and sales essential for business growth. The fourth speaker, Suresh Sharma, founder and CEO, AutoNagar.com, an auto portal, also spoke about marketing.

Ranjeet Pawar, head of marketing, India, at TCS, spoke about marketing to enterprise consumers. He stressed on the importance of having a customized sales pitch ready for every person from the client’s team. Prof. Balkrishna Parab from Jamnalal Bajaj Institute of Management Studies, spoke about

legal issues concerning startups. He demystified contracts, agreements, MOUs, etc. Accounting and bookkeeping issues were covered by Kinjal Jhaveri a chartered accountant. Mumbai also witnessed a short discussion

by Faisal Farooqui, CEO, Mouthshut. com, who spoke about how he started after leaving a lucrative job in the US in 2000. He spoke about various aspects, including the disappointments, which entrepreneurs have to suffer.

In Bangalore the April Startup Saturday registered over 100 attendees.

Like Mumbai, Bangalore also had a long list of entrepreneur speakers, but here sports-based services dominated.

There were five demonstrations and one idea discussion.

Anand Gopalakrishna, founder, Crickick.com, kickstarted the event.

His online venture is a 2007 December startup on cricket statistics. Then came a demonstration from Vaibhav Tandon, business head, IndiaKhelo. com, which is a sports networking portal. Third was Nandan Kamath of GoSports who spoke on the need to provide encouragement to talented youth who have a passion for sports, besides discussing his business model.

This was followed by a light discussion

by Amalore Jude who spoke about his building idea called Kompete, a platform for competition analysis.

Ashish Sinha, a product manager with Yahoo, chipped in with details about his upcoming workshop on product management discipline for startups. Last, Najunda Palecanda of iPredict gave a demonstration. iPredict is a Web-based prediction engine for IPL cricketing teams.

Hyderabad also witnessed a well-attended event. The city had five speakers. The event started with Ramesh Loganathan, MD, Progress Software.

Second was Moorthy Uppaluri, general manager–, developer and platform evangelist, Microsoft Bizspark Program. He spoke about the services Microsoft Bizspark offers to early-stage startups. Other prominent speakers were Saurav Patnaik of Pramati and Mamtha Banerjee, founder, InvestDAR E ment Yogi.

MAY 2009 93

Organizations DARE.CO.IN

covered in this issue, in alphabetic order; first appearance

Airbus ........................................................................ 14 Akamai ...................................................................... 63 Aksh Optifibre ............................................................ 63 All India Cycle Manufacturers Association................. 83 Alliance Francaise ..................................................... 92 Amadeus ................................................................... 20 American International Group ................................... 14 Anna University ......................................................... 75 Association of Private Detective Agencies & Investigators ........................................................... 71 ATKearney ................................................................. 15 B-six Holiday Resort .................................................. 29 Bahrain Economic Development Board ..................... 54 BANCS ...................................................................... 79 Bank of India ....................................................... 37, 79 Bharti Tele-Ventures .................................................. 79 Bianchi ....................................................................... 83 Bill and Melinda Gates Foundation............................ 80 Boeing ....................................................................... 14 Brasil Telecom ........................................................... 63 Brink Arya .................................................................. 77 BSNL ......................................................................... 79 Canaan Partners ....................................................... 67 Canara Bank.............................................................. 36 Cappadocia Cave Suites ........................................... 29 Carmelia Haven Resort ............................................ 29 Cashnet ..................................................................... 79 Cashtree .................................................................... 79 Central Bank of Bahrain ............................................ 53 Central Scientific Instruments Organization ............. 75 CGTMSE ................................................................... 97 Cientifica .................................................................... 72 CISCO ....................................................................... 97 CMS Computers ........................................................ 77 Czech Airlines............................................................ 14 Dabur ......................................................................... 72 Dasparkhotel ............................................................. 32 Deep Space Network................................................. 62 Defense Research and Development Organization .. 74 Dena Bank ................................................................. 37 Detective International ............................................... 69 Devlok Hotel .............................................................. 32 Dhama Apparel.......................................................... 26 DHL ........................................................................... 97 Diebold Systems........................................................ 79 Dominos .................................................................... 44 Electronic Tender ....................................................... 67 Elixir ........................................................................... 67 Engineering Exports Promotion Council.................... 83 Engineering Manufacturing Entrepreneurs Resource Group ........................................................................ 38 Ernst&Young .............................................................. 52 FinalQuadrant ............................................................ 23 Floatel ........................................................................ 30 Four Seasons Istanbul ............................................... 29 France Telecom ......................................................... 63 GE Commercial Aviation Services............................. 14 Glenburn .................................................................... 32 GlobalPlaneSearch.com ............................................ 15 94

MAY 2009

Gmail ......................................................................... 62 Green Magic Tree House Resort ............................... 29 Gulf Cooperation Council .......................................... 53 Gwangju Institute of Science and Technology ........... 75 HCL Comnet .............................................................. 79 Helga Folly................................................................. 32 Hero Cycles ............................................................... 83 Hero Group ................................................................ 83 HP.............................................................................. 97 HSBC Bank ............................................................... 76 Hydropolis.................................................................. 30 IBM ............................................................................ 92 IceHotel ..................................................................... 32 IIT Delhi ..................................................................... 74 IIT Kanpur .................................................................. 20 Indian Council of Medical Research .......................... 74 Indian Institute of Management ................................. 37 Indian Institute of Science ......................................... 75 Infosys ....................................................................... 52 INSEAD ..................................................................... 21 Institute for Development and Research in Banking Technology ............................................... 79 International Air Travel Association............................ 15 International Lease Finance Corp ............................. 14 International Monetary Fund ..................................... 53 International Oncology Services................................ 74 International Society of Transport Aircraft Trading ..... 14 Ittiam .......................................................................... 19 iXiGO ......................................................................... 20 Jawaharlal Nehru Center for Advanced Scientific Research ................................................................... 75 Jealous Jeans............................................................ 92 Jet Airways ................................................................ 14 Jinal ........................................................................... 92 Jules Undersea Lodge............................................... 30 Kala Gaon.................................................................. 36 Kingfisher................................................................... 14 Lars Stroschen .......................................................... 32 Liberty Hotel .............................................................. 29 Madhouse .................................................................. 67 Makaibari ................................................................... 32 Makemytrip.com ........................................................ 23 Malmaison hotel ........................................................ 29 Maskati Commercial Services ................................... 52 Massachusetts Institute of Technology ...................... 26 Microsoft .................................................................... 67 MoserBaer ................................................................. 72 MTNL ......................................................................... 63 Naina ......................................................................... 92 Nanoshel ................................................................... 72 NASA ......................................................................... 62 NASSCOM ................................................................ 24 National Detectives & Corporate Consultants ..... 69, 70 National Financial Switch .......................................... 79 National Innovation Foundation ................................. 35 National Institute of Design........................................ 26 National Science Foundation..................................... 75 Nayzak Air Transport ................................................. 14 NCR Corporation ....................................................... 79

NDTV ......................................................................... 25 Neemrana Hotels....................................................... 32 NEN ........................................................................... 90 Norwest Venture Partners India ................................. 58 Opelin ........................................................................ 67 Oriental Bank of Commerce ...................................... 38 Poseidon Undersea Resort ....................................... 30 Premier Shield ........................................................... 77 Project on Emerging Nanotechnologies ................... 73 Propeller Island City Lodge ....................................... 32 Punjab National Bank ................................................ 36 RBI............................................................................. 38 Renesys..................................................................... 63 ReportLinker .............................................................. 75 Reserve Bank of India ............................................... 79 Reva .......................................................................... 92 RGe ........................................................................... 72 Safari Land Farm ....................................................... 29 Samsung ................................................................... 73 Satyam ...................................................................... 52 Security and Intelligent Services (India) .................... 77 SeventyMM ................................................................ 67 Sigma Mall ................................................................. 92 Stanford University .................................................... 43 State Bank of India .............................................. 38,97 Sultanahmet Jail ........................................................ 29 Talent Ideas and Enterprise....................................... 40 Tata Consultancy Services ........................................ 52 Tata Telecommunications .......................................... 79 TechTribe ................................................................... 67 Telecom Italia ............................................................ 63 Telefonica .................................................................. 63 Telegeography ........................................................... 62 The Caves ................................................................. 29 The Indus Entrepreneurs ........................................... 40 The Jail ...................................................................... 28 TI Cycles.................................................................... 83 Time Warner .............................................................. 63 Tranquil Tree House Resort ....................................... 29 Travelguru .................................................................. 23 Travenues .................................................................. 23 Trident Sleuths ........................................................... 69 TTK ............................................................................ 63 United Nations Security Council ................................ 53 University of Delhi...................................................... 75 University of Pennsylvania ......................................... 21 Utter Inn ..................................................................... 30 VV Marketing ............................................................. 83 Vasanti ....................................................................... 92 VentureBean Consulting ............................................ 39 Wadhwani Foundation ............................................... 91 Welcome group.......................................................... 32 Wharton school ......................................................... 21 Wincor Nixdorf ........................................................... 77 Wipro ................................................................... 52, 92 Writer Corporation ..................................................... 77 Yatra .......................................................................... 23 YouTube ..................................................................... 44

People DARE.CO.IN

covered in this issue, in alphabetic order; first appearance

Abhishek Gupta ................................. 74

Lalit Bharadwaj .................................. 75

Aditi Nag ............................................ 91

M. Vidyasagar .................................... 75

Aditya Mittal ................................. 42, 67

Manak Singh...................................... 41

Anand Mahindra .......................... 42, 67

Mohamed Ghassan Shaikho ............. 54

Andreas Strauss ................................ 32

Monique Griffiths ............................... 29

Anjana Vivek ...................................... 39

Nandan Nilekani .......................... 42, 67

Arun Sarin ................................... 42, 67

Narayana Murthy ......................... 42, 67

Ashish Mathur.................................... 69

Neeta Kumar ..................................... 36

Ashok Bhaskarwar ............................ 74

Paul Allen........................................... 80

Barry Woods ...................................... 30

Peter Cooper ..................................... 45

Bill Gates ........................................... 80

Pravin Gandhi .................................... 40

Bringi Dev .......................................... 41

Prof. Kurt E Geckeler ........................ 74

CK Prahalad ................................ 42, 67

Rajnish Kumar ................................... 23

D. Raghuram...................................... 83

Rakesh Sharma ................................. 67

Devendra Khari .................................. 43

Rohit Agarwal .................................... 67

Dharmendra Yashovardhan ............... 23

S. Mokhapaty ..................................... 74

Donald Rumsfeld ............................... 19

Sameer Guglani................................. 67

Dr Dipankar Banerjee ........................ 74

Sathyan P. Gopalan ........................... 77

Dr Pradeep Jai Singh ....................... 74

Sergeyi Bin ........................................ 80

Ganesh Prabhu ................................. 37

Shiv Nadar ................................... 42, 67

Geetika Dayal .................................... 41

Sohil Chand ....................................... 58

George Bush ..................................... 19

Steven Udvar-Hazy............................ 14

George Doriot .................................... 21

Sylvia Pinto ........................................ 91

Girirai Nyati ....................................... 73

T. Ramasami ...................................... 75

Gulab Rao ......................................... 34

Taralika Lahiri ................................... 69

HP...................................................... 67

Usman Shekhani ............................... 34

Jens Schütter..................................... 23

V. Kuluthunga Cholan ........................ 69

Jitender Kohli .................................... 67

V.K. Bansal ........................................ 37

John Pawle ........................................ 45

Vasanti Venugopal ............................. 92

Kanwal Rekhi............................... 42, 67

Vikas Kumar Binjrajka........................ 83

Kavita Singhal.................................... 36

Vindi Banga ................................. 42, 67

Kiran Mazumdar-Shaw ................ 42, 67

Vinod Khosla ............................... 42, 67

Kishen Das ........................................ 83

Vipul Prakash ................................... 67

Kota Murali......................................... 73

Vivek Agarwal .................................... 43

Kranthi Vistakula ................................ 26

Warren Buffet..................................... 80

DARE is not an acronym. It represents the daring spirit of the entrepreneur.

The red color for the R of DARE represents the fire in the belly of the entrepreneur. You could think of the D representing the face, A representing the chest, R representing the belly and E representing the feet of the human body. Hence the red R. The entrepreneur dares to do things.

(S)he dares to do things differently

SMS “DARE <your comments, questions or suggestions>” to

56677 dare@cybermedia.co.in MAY 2009 95

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event/report

Entrepreneurship in reel life DARE screens movie on entrepreneurship in 25 cities

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DARE.CO.IN

event/report

A

number of businesses have been reeling under the effect of the ongoing slowdown in some way or the other. To pep up the dampened spirits of entrepreneurs, DARE screened a movie, Sahas, on how to succeed in entrepreneurship. The movie, which was screened in 25 cities between March 28 and April 4, 2009, left the audience asking for more.

Sahas was a series of four short films, each of 15-minute duration. The short

films showcased the struggle faced by entrepreneurs both while starting and scaling the business. The movie talked of solutions that can help entrepreneurs deal with the challenges relating to funding, printing, logistics, IT networking etc. The movies were well received by the entrepreneurs present at the screening as they could easily connect the reel life situations presented during the movies with real life situations. In all, the movie was watched by

approximately 2,000 people, with an average of 75 people per city.

The sponsors of the event were State Bank of India, DHL, HP, CISCO, and CGTMSE. The movie was screened in Ahemadabad, Madurai, Kanpur, Agra, Rajkot, Coimbatore, Varanasi, Faridabad, Surat, Trivandrum, Jalandhar, Gurgaon, Gwalior, Vadodara, Kochi, Chandigarh, Hubli, Nashik, Vijaywada, Indore, Mysore, Nagpur, Vishakapatnam, Raipur, and Pondicherry. D A R E

MAY 2009 97

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/exit

Please visit www.dare.co.in to read articles published in these previous issues of DARE For fresh subscriptions or renewals of the magazine, please visit http://www.dare.co.in/subscribe/ 98

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