Surviving the Slowdown PG 60
AUGUST 2012 VOLUME 3 ISSUE 12 `100
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TABLE OF CONTENTS INSIGHTS
COVER STORY
SECOND LEAD
16 The Real Purpose of Branding
52 The Good Sir Richard
R. Jagannathan decodes the branding choices of a customer
Sir Richard Branson built the successful Virgin Group when the markets were growing at a sluggish rate. After achieving great heights with the Virgin Records label and Virgin Atlantic Airways, the entrepreneur is now preparing for his entrepreneurial journey into space with his venture Virgin Galactic By Jason Ankeny
18 Rediscovering the Art of Walking Bharat Banka tells you how to deal with a slower growth rate
19 Nature Vs Nurture
Manish Sabharwal delves into two entrepreneurial myths
20 The E-Commerce Holocaust Looms Alok Kejriwal discusses his four major worries for entrepreneurs
IN CONVERSATION
60 Shut Happens India’s big and emerging businesses both are finally feeling the pinch of the macroeconomic uncertainty. The dream run may have come to a halt temporarily By Ankush Chibber
SOCIAL ENTREPRENEUR
30 ‘We cannot rely only on growth to wash our sins’ Nirmalya Kumar, Professor of Marketing at London Business School and Co-Director of the Aditya Birla India Centre speaks about the challenges of shrinking markets, innovation and more
22 Charlie Come Early Anurag Batra on the growing breed of young entrepreneurs
24 Online Enablers
Nandini Vaidyanathan advises startups on why they should bank on tech-aids from numerous sources
By Sourav Majumdar
32 ‘Jugaad is very active in many emerging markets’ Navi Radjou, Jaideep Prabhu and Simone Ahuja, co-authors of the book Jugaad Innovation talk about jugaad’s negative connotation and its role in large and small scale companies
26 History of Idea Protection
Rajeev Surana talks about the evolution of idea protection through time
By Shruti Chakraborty
WOMAN ENTREPRENEUR
36 Labor Lessons Gayathri Vasudevan’s venture LabourNet is creating an ecosystem in India that aids employment generation By Shonali Advani
SUCCESS INC 38 Like a Phoenix Restaurateur Vithal Kamat has defied defeat by turning his Rs. 200 crore debt into a success story
27 A Million Bosses Now
By Shruti Chakraborty
Shruti Kohli says entrepreneurs are always at the mercy of their target audience
28 What’s your ‘Need’ to Grow?
Ravi Kiran talks about the need to understand what motivates us
GETTING THERE 42 A Karbonn Copy of Success 34 Lady-at-Arms G Sree Vidhya of Ravindra Services took on some of life’s challenges head on and emerged triumphant By Shonali Advani
6 Intelligent Entrepreneur August 2012
Karbonn Mobiles has made its presence felt in the Indian market despite facing stiff competition from global brands By Shruti Chakraborty
IN FOCUS
TECH DEPARTMENT
81 Motivate your Sales Team Your sales team needs to transform your business idea into a scalable entity. Read about ways to facilitate that from celebrity chef Gordon Ramsay By Carol Tice
SPECIAL REPORTS 82 Going global allowed us to do more: Ameera Shah Women entrepreneurs share their achievements and the challenges they faced to become successful By Our Staff Writer
103 Ultra XXXL Acer Aspire Timeline Ultra M3 is a great laptop as long as you don’t take the ultrabook tag too seriously
83 My entrepreneurship plunge is a calculated bet: Falguni Nayar 45 Packed with a Punch Sadanand Maiya, the man behind MTR Foods is all geared up to compete with the bigwigs in the packaged foods business By Shonali Advani
48 The Business of Creating Heroes Be! is the country’s first risk capital fund for the young who live in poverty By Bindi Shah
Women from the corporate and entrepreneurial arena discuss their business lessons and success stories at an event in Mumbai
By Ankush Chibber
By Bindi Shah
85 'Learn to let go' Smriti Mudgal discusses the entrepreneurial climate for startups with Kaushik Somanathan, Ravi Kiran and Sourav Majumdar
OFFBEAT
SPECIAL REPORT
104 Porto Photo
66 A Billion Drops of Fortune
The Epson PM245 is a portable photo printer worth considering
Naveen Luthra’s Mulshi Springs is slowly making its way towards becoming one of the most promising brands of natural spring water in the country
By Ankush Chibber
By Ankush Chibber
70 A Village of 4G and Innovation Kerala is slowly steering towards the idea of entrepreneurship, thanks to the efforts of a startup facilitator in the state By Shruti Chakraborty
90 Paint the World
105 Boost Productivity
Mihir Mody’s Adwallz is putting companies in touch with target markets via rural wall painting
Smartphones can help entrepreneurs stay focused on their business. Read on for three ways to do this with your smartphone
By Sriya Ray Chaudhuri
94 Power Dressing for your Store Window Your store window is an important factor for driving in sales. Read about how to create winning displays
By Amy Gahran
By Jane Porter
GO FRANCHISE 72 Investing in Change
96 Social Circuit
Impact investment funds are making forays into a space where traditional commercial funds are wary of entering
Social media platforms can aid franchising in a big way. Here are some lessons shared by franchisors
By Shruti Chakraborty
By Jason Daley
STRATEGY
ONLINE IDEAS
80 Plunge into Entrepreneurship
101 Watch Out
Starting a business can be daunting at first. Carve your way to success while your ideas are still hot
Find out how you can promote your brand by creating business videos
By Nacie Carson
By Linda Sedloff Orton Intelligent Entrepreneur August 2012 7
TABLE OF CONTENTS
MONEY
STARTUPS
HOW TO 118 Market a Social Game Developing online social games is one thing, marketing them is an entirely different ball game By Jignesh Jain
120 Manage a Feeton-Street Sales Force This will help you market your products successfully and achieving that sales target
100 Fix and Facts A healthy mix of equities and real estate is a must in a high-inflation scenario
By Pranbihanga Borpuzari
By Rajesh Saluja
108 On the Right Track
123 Build to Sell
Manish Rathi’s Stelling Tech is a one-stop source for all train information in the country
It is important to monetize the value you have invested in your business. Use a calculated approach to make it saleable
By Pranbihanga Borpuzari
110 Betting on the Basket The founders of FabMart are entering the e-grocery segment with Bigbasket.com By Shonali Advani
REGULARS 10 FEEDBACK 11 RESOURCES 12 ASK ENTREPRENEUR 14 CAPSULE 134 BACKSTAGE
112 Cab on Tap Entrepreneurs Bhavish Aggarwal and Ankit Bhati have developed a technology that is changing the way people hire cabs By Shruti Chakraborty
By Bindi Shah
124 Clear Export Consignments at Customs Learn how to clear export consignments and Customs procedures and watch your business grow By Bindi Shah
127 Choose a Law Firm Your company needs expert legal advice and protection. Outsource to the right legal firm By Diljeet Titus
BOOK EXCERPT 128 The Key Strategic Paths An extract from the book The New Emerging Market Multinationals talks about how emerging market firms are achieving success
SPEND IT COVER CREDITS
129 Popular Bites Spaghetti Kitchen has a new menu, which is a compilation of its most popular dishes through the years
114 Not Just a Bookworm Tabassum Modi and Syed Sultan Ahmed’s venture Edumedia has amalgamated education and movies to bring about a change in the education system in India
COVER DESIGN
Arko Provo Mukherjee
COVER IMAGE Marc Royce
By Sriya Ray Chaudhuri
131 Pub Grub Monkey Bar, a gastropub in Bengaluru offers the right options and proportions in its menu
By Shruti Chakraborty
By Shonali Advani
116 Sports Ware
132 Speed Thrills
Sportingmindz is leveraging sports technology to aid sportspersons, students and national sports teams to excel at their game
The Mercedes CLS combines the thrill and charisma of a coupe with the comfort and practicality of a saloon
By Shruti Chakraborty
By Pranbihanga Borpuzari
8 Intelligent Entrepreneur August 2012
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THE BUSINESS OF FOOD STATE SURVEY: PUNJAB
SANJIV GOENKA’S SECOND INNINGS THE BUSINESS OF GYMS
THE BIG
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FOOD ISSUE India’s top restaurateurs tell you their recipes for success PG 54
5 HOT STARTUPS PG 99 LESSONS FROM THE TOP 10 U.S. BRANDS PG 46
A NURSERY FOR YOUR NEW VENTURE PG 40
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5 hot startups to watch out for PG 107
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Sanjiv Goenka's second coming
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To read more, grab the August 2012 issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in
IN SIGHTS
THINKING & DOING
[ ALOK KEJRIWAL ]
E-Commerce Holocaust Looms An entrepreneur shares his four major worries DO YOU KNOW WHY you meet so many people There is no comparable difference. I just called Vijay and Ravi? I am told that the supersearched for online options to buy my favorite hit movie Deewar (1975) inspired many parents book, Autobiography of a Yogi. to name their kids after the characters in the On the first page (Google), I found 11 websites film. In the US, it’s been documented that the selling the same book at the same price with the most common baby names of 2010 are Bella and same delivery terms, etc. Edward, named after the characters of the epic The point I’m making is that there is no differmovie Twilight. ence between the hundreds of e-commerce sites Nowadays, in the entrepreneur community, in India, and that is a big cause of worry. whenever I ask someone, “Dude, what are you Some of these entrepreneurs tell me they doing?” The answer is almost are building a ‘brand’ that always, “e-commerce”. Now, consumers will be loyal to, Though zebras are I have no problems with but that’s bunk. Great compae-commerce! nies become brands; expenstriped uniquely from For an Internet entrepresively built brands don’t each other (like fingerneur like me, the progression become great companies. prints), it’s very difficult from bricks to clicks is natural and welcome. Suggestion: To succeed, to tell the difference However, a few concerns each e-commerce business between two zebras in the process have begun to in India must have somehaunt me. thing unique to offer. They all can’t sell zebras and still 1. Buying a zebra pretend to be distinct. Let’s assume that you want to buy a zebra (why 2. Getting a free dinner not?). Now, if you ask me for advice, I will ask The Zodiac Grill, an upmarket and chic restauyou to go to a zebra farm, choose and get one of rant that was launched many years ago at the those beautiful animals home. Taj Mahal Hotel in Mumbai, had a menu withThe challenge you will have would be differout prices. entiating one zebra from another. Though zebras The restaurant left the decision of how much are striped uniquely from each other (like fingerto pay on its patrons. Now, the Zodiac Grill was prints), it’s very difficult to tell the difference being very clever. It actually collected hard-tobetween two zebras. 20 Intelligent Entrepreneur August 2012
Photo Joshua Navalkar
solicit information on what refined diners were buy it in multiples and keep them for later. willing to pay for a very classy dining experience Now, it seems the same lesson is being applied in India. in a rather perverse way by Venture Capital Once they had enough data, they switched to (VC) firms who are blindly investing in multiple a full-priced menu (err... really expensive) and e-commerce firms in India, all of whom are in became a huge success. The Zodiac Grill served the same line of business! a free dinner that was not free after all. When I asked a VC “Why?” he said, “We need As far as e-commerce sites go, the concept of a couple of e-commerce sites in our portfolio. ‘cash on delivery’ (COD) reminds me of Zodiac It’s just making sure that we have covered the Grill’s free dinner experiment, however, with a industry. sad twist. Sure, we know that many of these guys will That’s because data now indicates that almost fail. But we just need to have e-commerce in the 40 percent of e-commerce buyers are returning closet. COD goods on flimsy reasons such as, “This is not what I wanted to buy…” and so on. Forget Suggestion: Entrepreneurs should make sure paying for the food, they’re returning it after it that they are not those black trousers that VCs comes to the table. are buying blindly, just to stock up! Other challenges include money by courier The fallout is that you become one amongst companies being pilfered, repeat visits to customthe many, that will never receive special care ers’ houses to conclude a and attention (follow-up delivery (thereby escalating rounds of investments, etc) costs), etc. A large swathe of Indian when you need it. COD could have been a nice digital entrepreneurs 4. Entrepreneur Hara-Kiri way to get consumers to ‘try’ have started e-comIn Japan, Samurai soldiers e-commerce, but not ‘the’ killed themselves in a ritual preferred payment engine! merce companies as called Hara-Kiri rather than their first ventures. compromising their honor. Suggestion: Get consumers Some of them are naive; The big worry I see today is to pay 50 percent advance when they buy online. some have been misled, that a large swathe of Indian digital entrepreneurs have That way their intent to some bribed by easy started e-commerce compabuy will be proven and they money into doing this nies as their first ventures. will be around to collect their Some of these entreprepurchases and pay up the neurs are naive; some have remaining sum. been misled, some even bribed by easy money 3. The challenge of the black trousers into doing this. A few years ago, I happened to buy a pair of black I just hope that when massive consolidation trousers at a store. It turned out to be perfect. happens and lots of e-commerce companies die It had an amazing fall, fitted me like a glove and perish, these young entrepreneurs don’t give and even the color stayed true black after up or slink into oblivion. repeated washes. We need an army of business Samurais (entreA few months later, I went back to the store to preneurs) in India, so we can’t afford to let them buy another pair of black trousers but was disapdo Hara-kiri! pointed to be told that they had stopped producing that particular range. Suggestion: Entrepreneurs must not replicate The store manager tried selling me the new what’s already been done. There are so many range, but I just didn’t get the same ‘wow’ feeling business opportunities available, so why settle when I tried it on. for starting the 233rd e-commerce site in the I left the store without buying anything. In the country? years to come, I never managed to lay my hands ALOK RODINHOOD KEJRIWAL is a digital entrepreneur and on the ‘perfect’ pair of black trousers. The lesson blogs at http://therodinhoods.com I learnt was that when you get something great,
To read more, grab the August 2012 issue ofEntrepreneur Intelligent Entrepreneur August 2012 21 To Subscribe, visit www.entrepreneurindia.in
IN FOCUS
[ BIG BITES ]
Punch PACKED WITH A
SADANAND MAIYA gets set to compete with the bigwigs in the packaged food business. Again... SHONALI A DVANI
T
he man’s back in action. He may be 63, but his entrepreneurial spirit is not. After a brief hiatus, Sadanand Maiya, of the Maiya family behind Bengaluru’s iconic Mavalli Tiffin Room (MTR), is gearing up to venture into the packaged foods industry again. And this will, by a quirk of will and not fate, pit him against his once-own business, MTR Foods. The eight decades old MTR Foods was bought over by Norwegian firm Orkla back in 2007 in a `500 crore sale. The sale, which was initiated by private equity investors JP Morgan Partners and Aquarius looking for a profitable exit, also came with a non-compete clause for five years, which prohibited Maiya from entering the packaged food segment. Maiya, unlike many others, did not go anywhere else. He waited. But no sooner did that clause expire in April 2012 than the seasoned entrepreneur returned with a home-grown brand with which to take on the bigwigs operating in his sector.
Strategic steps Maiya has used his time strategically. He went back to the original family business of running a South Indian vegetarian restaurant. This time it was his son P. Sudarshan Maiya who ventured into the space. Supported by his father, he launched Maiya's restaurant (under Maiyas Beverages and Foods Private Ltd.), which now has
two centers in Bengaluru that also sell sweets and savouries. The primary reason to get into the restaurant space was to establish and build a new brand—Maiyas—so that by the end of the clause period, he could launch his range of packaged food products, riding on brand recall value. More pertinently, Maiya has used this period researching and developing new food technologies, aided by a PhD from Columbia University (2010) in Nanotechnology and Food Science. Cut to the expiry date this April, and the company launched Maiyas ready mixes and masalas, which are currently sold through retail stores in Karnataka, Andhra Pradesh and Tamil Nadu, as well as exported to the US, Japan, Canada, Singapore, Australia, the Middle East and Germany. As this Entrepreneur issue goes to print, the firm’s range of ready-toeat (RTE) products are slated to hit the shelves. “The domestic market size for RTE is `250 crore; it grew 25-30 percent in 2010-’11. MTR Foods occupies a 15 percent share as leaders,” says Pratichee Kapoor, Associate Vice-President, Food Services and Agriculture, Technopak Advisors.
'Frozen' future Maiya’s biggest bets lie in the frozen food segment, a category he’s confident will be a major growth driver for the food processing industry. For starters,
he’s made heavy investments in the back-end, pumping in `60 crore for a plant spread over four acres that is currently producing instant ready mixes and masalas and will soon produce RTE foods. Snacks production will be shifted here with newer machines. The entrepreneur has also identified another 18 acres for the second phase of expansion next year, where he would invest `40 crore in a plant which will produce frozen foods. However, the staff of 200 won’t change as he’s relying heavily on automation. “For frozen food, we are initially concentrating on south Indian items,” says Maiya, who now serves as a Director at Maiyas Beverages and Foods. Back in 2000, he had attempted the same using blast freezing technology. “But it was too early to introduce frozen variants in the market,” he recalls. This time round, he’s adopting the spiral freezing technology, which results in faster turnaround time. “It drops the temperature of food, say a freshly-fried vada, from 75 degrees to -35 degrees Celsius in 15 minutes. The food quality will remain unchanged when it’s reconstituted by thaw ing, heating or putting in a microwave with no water molecules on the surface, as was the case with blast freezing,” he explains. “The idea was to imbibe nanotechnology-based products, especially frozen foods. In 15-20 years, this will be the norm, and RTE items will taper down,” he points out. Technopak Advisors estimates that the frozen food market at `700 crore (2010) is growing at a CAGR of 15 percent and will reach `1,400 crore by 2015. “Currently, frozen peas hold 45-50 percent market share followed by cut vegetables, fries and meat and poultry which make up the balance,” says Kapoor. The drivers for changing trends include increase in nuclear and doubleincome families seeking convenience, and rise in the number of expatriates and international travellers which has led to more awareness and adoption of western eating habits. Deeper penetration of modern retail has changed
To read more, grab the August 2012 issue of Entrepreneur Intelligent Entrepreneur August 2012 45 To Subscribe, visit www.entrepreneurindia.in
COVER STORY
[ HIGH FLYER ]
THE
SIR RICHARD Fueled by frustration with the status quo, Richard Branson built his Virgin Group empire attacking verticals that had long been dominated by lumbering legacy companies. Now he’s extending his entrepreneurial philosophies to a new market that’s out of this world JASON A NKENY
52 Intelligent Entrepreneur August 2012
WHAT DREAMS MAY COME TRUE: Richard Branson
Photo Credit Virgin Atlantic
To read more, grab the August 2012 issue of Entrepreneur Intelligent Entrepreneur ď‚„ August 2012 53 To Subscribe, visit www.entrepreneurindia.in
SECOND LEAD
[ DOWNTURN BLUES ]
The macroeconomic strains are finally showing on India's big and emerging businesses both. It's time to put on your game face A NKUSH CHIBBER
60 Intelligent Entrepreneur ď‚„ August 2012
IN
the 2008 film drama August, Josh Hartnett plays Tom Sterling, a young, abrasive CEO of a recentlygone-public startup, Landshark. The year is 2001 and the month August, and as a promoter, there are only a couple of months before he can sell his shares and make some money. Sterling stalls. He wants to wait a bit more. But his main client is also stalling and investors pushing. Eventually, it's a moment of caution stretched too long. The market plunges, investors pull the plug, and a month later, 9/11 happens. It all goes horribly wrong. The movie August is really not a movie made for emerging businesses anywhere, be it in the US or India. But the lessons, or should we say warnings, from this motion picture are very real and dangerously close. It’s not 2001 yet. Or for that matter, the even worse 2008. But only a fool would deny that there is not an air of disappointment mixed with equal parts of uncertainty and slowdown floating about now. There might be many views you would hold about where the economy is heading, but really, there are only two dominating views
MEHER PUDUMJEE
Chairperson, Thermax
– bad and really bad. R Sriram, the Co-Founder at Next Practice Retail, a retail consultancy firm, and former CEO and Founder of the Crossword chain of bookstores, is one of those who believes that even though its not 2001 or 2008, things are really bad.
BMPH 2007
HOW MANY BIG MACS CAN JOE, IVAN, LIU, ASHOK, DAITO, AND ALAIN AFFORD?
BMPH 2011
3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 U.S
Russia
China
India
Japan
Western Europe
“Retail spending is certainly down. Overall, inflation has been high while salary raises have not been as high. People’s aspirational incomes are thus low. This has affected their spending capacity,” he says. Though he agrees that India is definitely doing better than other parts of the world, he says that there “is a mismatch between expectations and reality”. This mismatch could have its roots in what you may think is the prime indicator of the Indian economy. In April, the International Monetary Fund (IMF) released data which said that India's gross domestic product in purchasing power parity (PPP) terms stood at $4.46 trillion in 2011, marginally higher than Japan’s $4.44 trillion, making it the third-biggest economy after the US and China. Good news? Now take a more on-the-ground medium of assessing economic health, Burgernomics, the foundation of which is the Big Mac Index developed by The Economist. The index is an informal way of measuring the purchasing power parity (PPP) between two currencies using the Big Mac, which is a standard product offered by McDonald’s across the world. This index was further worked on by Prof. Orley Ashenfelter of Princeton University in a
To read more, grab the August 2012 issue of Entrepreneur Intelligent Entrepreneur August 2012 61 To Subscribe, visit www.entrepreneurindia.in
Source: National Bureau of Economic Research
Photo Neha Mithbawkar
Down. Down. Down. Down
SPECIAL FEATURE
[ POSITIVE IMPACT ]
are profitable. For example, an organization which works with something that the entrepreneur believes is the need in a particular area, but is something that people don’t want, may face a challenge. Organizations that work with social issues need to come up with new business models and entrepreneurs who can build profitable businesses are of great need in the social sector, he says. Impact investing made most of its initial forays through investments in Impact investing is a trend fast catching on in India. Venture capital microfinance institutions. Before the funds focusing on social ventures and businesses targeting the base microfinance model became a profitof the pyramid (BoP) are making deep forays into this space able business model attracting investment from commercial venture capital SHRUTI CHAKRABORTY funds and other eager investors, for a long time, impact investment funds and philanthropic capital were the ow many rural entrepreones taking the sector forward. leading what is being called the impact neurs have you met at invesA study conducted by the Monitor investing foray in the country. Harvey tor-startup summits and Group and Acumen Fund says that Koh, Associate Partner in the Monitor gatherings? Leave Sulabh aside; now, is the MFI sector received $20 billion in Inclusive Markets India practice, a conthere a name that immediately springs subsidies from philanthropists and sulting firm that works actively with to your mind when you think of social aid donors to refine its model over two impact investors and social ventures entrepreneurship in India? decades. In November 2010, a report by in India, says: “Social ventures mostly Many Indian entrepreneurs have JP Morgan, Rockefeller Foundation and work in very tough environments charted out business plans for venthe Global Impact Investing Network in India; this makes it important for tures that will focus on social chal(GIIN) estimated that the potential profit them to innovate more.” He adds that lenges. Some of them have succeeded for impact investors across just five secit is important to build businesses that in building notable busitors of inclusive businesses could nesses. Yet, many others 100 range from between $183 billion BoP IMPACT INVESTMENTS SINCE '07 (EST.) have ended up remaining and $667 billion over the next confined to a few villages or 10 years around the world, with towns. The truth is that there invested capital ranging from 80 just aren’t enough social between $400 billion and $1 trilventures in the country that lion. A survey by JP Morgan and have scaled up high enough the GIIN in late 2011 found that to be noticed immediately. the 52 impact investors surveyed 60 One of the reasons for that intended to deploy $3.8 billion of could be a lack of access capital collectively over the next to capital. 12 months. For social ventures that 40 Jayant Sinha, Managing face the problem of access Director of Omidyar Networks’ to capital, one trend that India fund says India is the hub has caught on rapidly in the of equity oriented impact invest20 last few years may come as ing. This, he says, is mostly due to a cause of relief. Names like the number of causes. Besides the Omidyar Networks, Acumen vibrant venture capital industry Fund, Aavishkaar Venture and exciting innovations, he says 0 Management Services that the scale of the problem is 2007 2008 2009 2010 2011 Source© VCCEdge Database ON Analysis and Unitus Seed Fund are such that there is a scope for a lot Investment in $ million
INVESTING IN CHANGE H
72 Intelligent Entrepreneur August 2012
of social ventures to emerge and work with people at the base of the pyramid. “The base of the pyramid is so large here. There are 850 million people who are surviving on less than $2 a day.” In India, companies focusing on the base of the pyramid have received less than $300 million since 2007.
Aavishkaar Venture Management Services To be called an impact investing fund, a venture fund should be ready to do Photo Neha Mithbawkar
“IMPACT INVESTING FUNDS SHOULD BE READY TO TAKE RISKS THAT COMMERCIAL CAPITAL IS NOT WILLING TO TAKE.” — VINEET RAI, MANAGING DIRECTOR, AAVISHKAAR VENTURE MANAGEMENT SERVICES
what commercial capital is not going to do, says Vineet Rai, Managing Director of Aavishkaar Venture Management Services. “Impact investing funds should be ready to take risks that commercial capital is not willing to take,” Rai says. The company invests in entrepreneurs based in rural India at a very early stage. “Some of the companies we invest in are at a stage wherein they haven’t even started generating revenue,” adds Rai . By December 2012, Rai says Aavishkar is likely to have invested $180 million. The company has created four funds so far and has invested in 33 companies through the four funds. Aavishkaar I achieved its first closing in August 2007 at $6 million, and its final closing in January 2009 at $14 million. The fund invested in 22 companies, putting in $50,000 to $500,000 per company. Aavishkaar 2 has a target size of $120 million and has achieved its first closing at $70 million in December 2011. The other two funds are Aavishkaar Goodwell 1 and Aavishkaar Goodwell 2. Aavishkar Goodwell 1 was formed in 2006 and had its final closing in May 2008 at $18.3 million. The fund gives equity capital to microfinance startups and microfinance institutions that are in the transformation or growth stage. It has invested in seven companies in India so far. Aavishkaar Goodwell 2 had its first closing at $10 million and has a target size of $80 million. Rai says the target is to invest $1 billion in the next 7 to 10 years in 300 companies. The company focuses on about six sectors, including agriculture and dairy products, healthcare and sanitation, education, energy and microfinance amongst others. “The average return we get from our companies is about 20 percent,” Rai says, adding that some fail, while others generate very high returns.
Omidyar Networks Founded in 2004 in the US by the founder of eBay Pierre Omidyar and
August 2012 73 To read more, grab the August 2012Intelligent issueEntrepreneur of Entrepreneur To Subscribe, visit www.entrepreneurindia.in
OFF BEAT
[ STORE SCORE ]
Here are 7 tips to create winning displays JANE PORTER
Y
our window displays are like billboards for your store. They can be the makeor-break factor in whether a customer enters your shop or walks on by. Yet too often, small retailers create windows that are boring, cluttered or poorly lit. "If you just put some thought in it, it doesn't cost much," says Noelle Nicks, who oversees visual merchandising for Cole Hardware's four
94 Intelligent Entrepreneur ď‚„ August 2012
stores in San Francisco. Although she has never spent more than $100 on a single design, her windows rarely fail to get attention. Her displays have included a farmers market with light bulb carrots and radishes and a beach setting complete with real sand. Nicks and other design experts offer these seven tips on how to create affordable window displays that will lure customers into your store.
Illustration Chaitanya Dinesh Surpur
1
Tell a story
When Valentine's Day rolls around, you might be tempted to grab every red item off your shelves and cram them in your display. That's too simplistic. "Start with a theme first," Nicks says. "Then plug in the pieces." One Valentine's Day, she chose the theme, “how to mend a broken heart," painting a black jagged line down a giant plywood heart and attaching hinges, chains and other hardware. For Halloween, she hung more than a dozen types of brooms against an orange backdrop with the words, "Which broom?" across the glass beneath them. The display not only played on the traditional witch-ona-broomstick theme, but it also showcased the store's large broom selection.
2
Think in visual planes
Before arranging a display, Nicks runs a line of blue tape across the window to mark eye level from the street. That isn't something you can simply estimate from inside a window because the floor often isn't at street level. "You want to concentrate the key pieces where the tape is," Nicks says. At the same time, you may not want to keep everything at eye level. Susan Jamieson, a Richmond, Va., interior designer, suggests suspending items from the ceiling or lowering them close to the floor, while maintaining a focal point at eye level.
3
Surprise customers
If you want to get noticed, avoid the predictable. Debbe Hamada, owner of Tilde, a Portland, Ore., gift shop, likes to incorporate unexpected, whimsical objects in her windows. She has used large papier-mâché acorns, forest animals cut from foam board, and giant lockets made of muslin and heavy chains to catch customers' attention. "People come by to look at the window. We get a lot of people [who] take pictures," she says. "It also brings them into the store."
4
Use bold shapes and colors
You don't have to be crafty to be good at window design. It's all about bold colors and shapes. In her next window display, Hamada plans to hang giant fuchsia and grey puffs of tissue paper around a few display tables of jewelry—something customers can see from a distance, even though the showcased
products are tiny. "Two out of every 10 people come in because they've seen something colorful in our windows," says Hamada, who usually spends less than $30 on a window arrangement.
5
Keep it clean
You don't want to clutter your windows with an assortment of products. "We've found that less product fits with a better quality product," Hamada says, "as opposed to a discount window where you might see a whole bunch of stuff crammed in." That said, you might consider using mass quantities of a single product, says Jon Schallert, a marketing consultant in Longmont, Colo. "A single or a double of anything is not going to get someone's attention. But if you put a dozen of something out, it's going to get anyone to look." A Christmas tree made of tennis balls, for example, is bound to draw more attention than a lone canister of them.
6
Update your displays
You want to change your windows as often as possible, but it doesn't have to be a costly, time-consuming effort. Schallert suggests printing a dozen large photographs that represent your store—images of your products or customers using them, for example— and rotating one or two of them in your window every few weeks. At the very least, update your displays every one to two months, says Linda Cahan, a West Linn, Ore.-based retail design consultant. "The more often you change your windows, the more people will look at your store."
7
Use lighting to stand out
Window lighting shouldn't be an afterthought. "You can draw a customer in if you have the correct angle of light on your product," says Schallert, who advises against hanging lights directly above a product to avoid creating shadows. Instead, use lighting to highlight focal points. Cahan recommends investing in a few spotlights you leave on after you close for the night. "If you are the only place with your lights on, then you will be like a beacon of visual stimulation," she says. ©Entrepreneur Inc. All rights reserved. JANE PORTER is a freelance journalist based in New York
To read more, grab the August 2012 issue of Entrepreneur Intelligent Entrepreneur August 2012 95 To Subscribe, visit www.entrepreneurindia.in
START UPS
[ TRAINED TO DELIVER ]
ON THE RIGHT TRACK Wondering if your train is running on time? Would a one-stop source for all your train information help? PRANBIHANGA BORPUZARI
AT
the heart of all train services-related information is a portal, trainenquiry.com, operated by Noida-based Stelling Tech Pvt Ltd. While the site was operational for a number of years under Indian Railways, Stelling’s US-returned techie founders Manish Rathi and Sachin Saxena have quietly gone about revamping the site. Trainenquiry.com is a platform that allows passengers of Indian Railways to search and find information on trains running across the country. Information such as train timetables, live running or status of a train, coach position etc is available with a simple search. The search can be made through either the 5-digit train number, train name, to and from station names and codes or simply through the intermediate station name. Rathi, 32, who was born and bred in India, did his dual masters in the US and then worked at Bell Labs for five years. Quitting, he worked in a string of startups in the US before moving back home to work with a startup, Bengaluru-based July Systems, in 2004. “I was exposed to mobile systems and Indian startups. Till then I was on the product side,” he recalls. After two and a half years at July, Rathi joined Delhi-based IndusLogic (now GlobalLogic), where he met Saxena, 45, as the duo worked on a business called Version 1.0, which helped startups to take their ideas and 108 Intelligent Entrepreneur August 2012
WELLWHEELED: Manish Rathi Photo Amit Kumar
INDIAN RAILWAYS Total track: 1.14 lakh km Route covered: 65,000 km Stations: 7,500 Fourth largest: After the US, Russia and China Passengers carried: 30 million per day Freight carried: 2.8 million tons per day
convert them into a launch. “In two years, we worked with 12-13 startups, so we started understanding this ecosystem quite well. At the same time, we were also getting very excited about the mobility space as the entire world was becoming mobile,” says Rathi.
Travel pangs Quitting their jobs in 2010, they decided to start in the healthcare segment but could not see any immediate business opportunity. “We then looked at the travel space,” says Rathi. Here, he realized people traveling by the railways had common problems. They found that information did not reach the passengers or was not available in the medium they wanted. They also figured information requested for was dependent on the stage of the journey. For example, a passenger would be more interested in the platform number at the start of his journey. “We managed to get in touch with Centre For Railway Information Systems (CRIS). They were also toying with different ideas. One thing led to another and we decided to collaborate with Indian Railways,” says Rathi. CRIS was set up 25 years ago as the Indian government conceived a project for analyzing Freight Operations Information Systems (FOIS) with the Indian Railways. Subsequently, in 1986, the Ministry of Railways established
CRIS to be an umbrella organization for all computer activities on Indian Railways. Today, its flagship service is the Passenger Reservation System, which provides reservation services to 15-22 lakh passengers a day on over 2,500 trains running through India.
A complex project Investing about `50 lakh from their personal savings and some angel investments, Rathi started working with the railways in August 2011, beginning with access to their data. “They generate humongous amount of data and we had to extract the relevant material and give it in a presentable format,” says Rathi. Sunil Bajpai, Group GM (FOIS) says building such a platform was always going to be complex because sometimes a train journey is spread across three days and it takes a lot of thought to provide the correct information that a passenger would be looking for. Compared to the extensive data available for every flyer on an airline, railway passengers are akin to aliens, says Rathi. No one really knows where they come from and what their preferences are. About 80 percent of India travels by railways, with nearly 30 million passengers traveling everyday by trains but little is known about them. “We got very excited about the potential of this information,” says Rathi. To make the platform work, he relies on information provided from the railways, looks at what is publicly available and takes into account geographical data. “We have created a platform which assimilates all the data and delivers output that is compatible across web, mobile etc,” he days. The other aspect that Rathi worked on was the prediction engine. “If I get an input on a train passing a certain station, I have to take that input and see what happens in future. For example, predicting an arrival time for a train if there is a delay. We had to build an algorithm to predict this,” he says. The railways also work on a different
timetable and the information, which comes to Rathi, is based on the operating timetable. “We have to then convert it into a timetable which is understandable to everyone,” he says.
Version 2.0 With initial work on the platform sorted out, Rathi is now trying to build smartness around the information. “We now understand why trains get delayed and which stations cause problems. This information will help build the next generation of services,” he says. According to Rathi, value-added services should be able to connect the needs of the traveler along with the businesses providing such services. This can be services like hotels, car rentals, porter services etc. He also wants to offer a service that will help people make choices by suggesting which trains are more punctual. Another service he would like to build on is which train offers you a higher probability of getting a confirmed ticket in case you are waitlisted. “In the last two months, we have managed to gather data on 55 lakh train travelers but this is still the tip of the iceberg. The next six months will see us getting more information. We will also look at connecting different modes of transportation information with the railways,” says Rathi. Only about eight to nine railway networks in the world provides such services; providing real time information is a real achievement for Rathi. “Our initial revenues will come from advertisements followed by transactions on the site. We are also looking at money from value-added services,” he says. The third year of operations is when he is looking at substantial revenues to chug in. More than 1 lakh km in length India, the fourth-largest railway network in the world is also one of the most complex with numerous junctions and passenger and goods train running on the same track. For Stelling, the opportunity is as long as it is complex.
To read more, grab the August 2012Intelligent issueEntrepreneur of Entrepreneur August 2012 109 To Subscribe, visit www.entrepreneurindia.in
BACK STAGE
TWO SUITS WALK INTO A BAR Golden rules for talking business over drinks ROSS MCCAMMON a good look at each other because of the person in the middle. Awful.
ACT LIKE YOU HAVE A MINORITY STAKE IN THE PLACE MEET FOR DRINKS? GREAT! BUT IF YOU DON’T WANT TO SEE YOUR PITCH BECOME A PUNCH LINE, TAKE CARE NOT TO LET THE BOOZE AND CASUAL ATMOSPHERE WREAK HAVOC ON YOUR BUSINESS JUDGMENT.
PRETEND YOU ARE NOT IN A BAR The bar will impose its riches upon you: drinks, atmosphere, etc. If you’re going to get any work done, concentrate on business, and let the bar do the rest. The bar should be thought of merely as neutral territory. The bar is not a topic of conversation. Drinking is not a topic of a conversation. Because those things aren’t about business.
DO THINGS EARLIER Everything should happen sooner than your counterparts expect it to happen. You should get there before they do and introduce business earlier than seems appropriate. You should wrap things up faster than seems suitable. Because if you do things early, you have control. Early is a virtue.
NEVER MORE THAN TWO If there are two of you, sit at the bar. If there are more than that, do not sit at the bar. Three people at a bar is the least-natural way for three people to jointly communicate. The person in the middle appears to be watching a tennis match, and those on the ends can’t get
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Respect the bartender. And the host. And the cocktail server. And the restroom attendant. And the valet. Because for tonight, these are your people. They are your assistants. You want the bar to be slightly more yours than your counterpart’s.
HESITATION KILLS MOMENTUM Never hesitate while ordering a drink. Never read the big chalkboard above the bar. Just order something you know they have. You wouldn’t waste time in a conference room.
EYES! The worst thing I’ve ever seen someone do in a meeting at a bar is not look me in the eyes… the entire time. No business was done that day. Anyone who doesn’t look you in the eyes is either ashamed of something or intimidated by something.
POSTURE! Square up. All business meetings are confrontations of a sort. So, square up. Sitting up straight is evidence of a backbone. It is also evidence that you’re not so inebriated you can’t conduct business.
CONSIDER TAKING NOTES ON A NAPKIN Because, just maybe, you’re inebriated. And because then you can always say: It all started by writing down on a napkin in a bar.
MODERATION! When it comes to doing business in bars, weak drinks help. The weaker your drink, the stronger your position.
MODERATION, PART 2! The second worst thing I’ve ever seen a counterpart do at a bar meeting is spill a full glass of beer all over himself because he missed his mouth when he went to take a drink. It was a breathtaking combination of misjudgment, humiliation and moisture.
ORDER YOUR OWN DRINK “I’ll have the same” is weak, unless that is what you’d have ordered.
BUT DO NOT ORDER YOUR OWN DRINK IF YOUR DRINK IS NOT A SERIOUS DRINK “I’ll have an Açai-tini.” No. No stupid martinis. Ever. If it ends in “-tini,” it needs to begin with “mar-.” All other -tinis are not actually martinis and do not suggest a serious drinker, a serious person or a serious business partner.
IMMEDIATELY FORGET EVERYTHING EXCEPT THE BUSINESS Things are said when drinking. Things are flirted with. Things are betted. Those things are to be forgotten. Anything aside from the business discussion is not to be spoken of again. What’s to be remembered is whatever is on the napkin. Because of the many virtues of doing business in bars, discretion is the most important. ©Entrepreneur Inc. All rights reserved. ROSS MCCAMMON is an articles editor at Esquire magazine