VENUGOPAL DHOOT PLAYS A DIFFERENT TUNE PG 124
JANUARY 2013 VOLUME 4 ISSUE 5 `100
www.entrepreneurindia.in
EYES ON THE PRIZE
Top venture capitalists and angel investors pick their hottest sectors for 2013 PG 46 EXCLUSIVE
India VC/Angel Confidence Survey
Vishwavir Ahuja on rewiring Ratnakar Bank PG 90 AMW Trucks hits the high road PG 80 Rethinking farming with Bhushan Agro 5 startups to watch out for PG 105
PG 68
Kanwaljit Singh, Senior Managing Director, Helion Advisors
TABLE OF CONTENTS INSIGHTS
COVER STORY 46 A Boom Year
18 RBI’s New Role
R Jagannathan looks at the new role the central bank is playing to help minimize losses
20 Beating the Competition
Richard Branson talks about how you can build an innovative culture
22 No Fizz, No Show
Nandini Vaidyanathan says that most startups don’t seem to focus on customer needs
23 Sunshine is the Best Disinfectant
Manish Sabharwal emphasizes on the importance of transparency
Five years since a certain investment bank in the US came crashing down, the world hasn't entirely recovered from the crisis the global economy was sent into. India too hasn't been left unaffected. But despite the headwinds and the condition of the capital markets, the country's top venture capitalists still haven't lost faith entirely. They are looking to invest in 2013 and they have their eyes on a few sectors. What will the next year bring? Will things start to look up again? Find out By Ankush Chibber
IN CONVERSATION 32 ‘I have great belief in India’s entrepreneurial talent’ Bala Deshpande of New Enterprise Associates talks about the venture capital major’s strategy and challenges in the investment space
24 Doomsayers’ Oracle
Shruti Kohli tells you how to deal with detractors and stay on the path to building your venture
26 7 Tips to Remember in a High Growth Stage
Ravi Kiran has a checklist of things you should do when your venture is in high growth mode
27 Soliciting Advice
Anurag Batra shares his opinion on the role of consultants
By Sourav Majumdar and Bindi Shah
SOCIAL ENTREPRENEUR 40 Prepaid Power Bengaluru-based Simpa Networks has developed a prepaid payment platform to make clean energy affordable to rural India By Shonali Advani
MY STORY
FOLLOW UP 36 Revisiting the Magnum Opus Eight months since Harsh Mariwala’s initiative ASCENT was launched, we take a quick glance at how things are going By Shruti Chakraborty
WOMAN ENTREPRENEUR
28 Return of the ‘Big Brother’
Bharat Banka says that global businesses need to plan and budget their businesses differently
42 Trend Spotting Bala Parthasarathy, the co-founder of Snapfish, shares what it took to build a photo sharing service through tough times and the highs of selling it for a whopping $300 million
29 Back to the Future
Vikram Sood voices his opinion on why Indian brands have no fans
30 Entrepreneurship as a Career
Alok Kejriwal says that entrepreneurship is now getting accepted as a career option
IN FOCUS 38 On a Ride Shubhra Bhardwaj Mehandirata’s events business, Ferriswheel Entertainment, keeps her busy even after an event ends By Julie Sam
6 Intelligent Entrepreneur January 2013
56 High Five Pearl Uppal and Gaurav Kachru have donned the hat of seed fund stage venture capitalists after successfully exiting their previous business By Avanish Tiwary
THE FUNDING
SPECIAL
SPECIAL FEATURE
INNOVATORS INC.
62
SUCCESS INC BANK CHAT
62 IN A LEAGUE OF HER OWN As Co-founder and CEO of Indus League Nidhish Shetty’s venture GreenNerdsClothing, is working Rachna Aggarwal has built an towards better waste management in Karnataka umbrella of apparel brands, each with a By Shonali Advani distinct style and place in the industry. By Shonali Advani 73 Waste Not
SUCCESS INC.
68 RULING THE REALTY SECTOR
Even after building millions of houses in the country over four decades, there is no stopping Sushil Kumar Ansal when it comes to the expansion of his construction business. By Sunita Mishra 90 ‘Ours had to be a high level of
transformation’ 71 HOME IN ON SUCCESS
Know more about affordable housing, Vishwavir Ahuja of Ratthe former an emerging segmentnakar in theBank, housing India boss of Bank of sector in India. By Team Entrepreneur America, and his
58 A Family of Entrepreneurs Bahrain’s Al Alawi family runs its family business differently marrying money with harmony on a model you may want to emulate By Bindi Shah 68
62 Mobilizing the World—One startup at a Time
80 The Truck Stops Here
The mobile space presents a number of opportunities. Find a few pointers that can help you be successful in the space
Anirudh Bhuwalka’s AMW is changing the game by bringing in new practices to the heavy vehicles manufacturing sector
By Mohit Bhatnagar
By Shruti Chakraborty
LEGACY
GETTING THERE
colleague Rajeev Ahuja, Head of Strategy, Ratnakar bank, talk about how they are building a new, modern bank brick-by-brick
MONEY DEPARTMENT By Sourav Majumdar 81 BETTER BILLING
Know the changes you need to make GO FRANCHISE to your invoice to get paid faster. By Gwen Moran
94 2012 Global Franchise Rankings
Thinking of buying a US-based franchise? We have a list of companies you may want to 82 WESTSIDE STORY consider
STATE FOCUS
95
66 Such a Long Journey
84 Rest Assured
The Bombay Store is a business that has witnessed the freedom struggle, economic downturns and more By Shruti Chakraborty
some ways to keep a tab Paramjeet Singh wanted to create a product for the OF GROWTH 86 CORRIDOR on your costs retail space. His venture Springwel Mattress has As the country’s mostBy ambitious Joe Worthmega reached out to customers to tell them about the infrastructure project worth Rs.4.05 lakh benefits of a spring mattress By Pranbihanga Borpuzari
STRATEGY 68 As He Sows
WATCH OUT
Chandra Dubey’s venture Bhushan Agro has doubled the yield in its pilot village using scientific methods of farming
crore—the Delhi-Mumbai industrial corridor— 97 More Green in gathers steam, Entrepreneur does your Wallet a ground-level reality check to know how Focusing on sustainit will help boost trade. ability isn’t just for the By Pranbihanga Borpuzari social businesses. It can
88 ‘Provide regular training to technicians’
help your business save money too Awaaz Entrepreneur’s Harshada Sawant92 talks to RN THE TRICK IS IN THE By JD Roth Balasubramanya and Mahesh Murthy on what the IMPLEMENTATION consumer electronics sector has in store for startups
By Avanish Tiwary
OFFBEAT
SPECIAL REPORT
70 Are You A Gorilla?
89 ‘JUGAAD’ has Arrived
Take a close look at the evolution of a market leader in the gaming industry By Harsh Pamnani and Debprotim Dutta
Gujarat has become the epicenter of economic activity in the country. Besides MONEY labor harmony, infrastructure development, socio-economic reforms and an investor96 Where is your Business friendly climate, it is the entrepreneurial Overspending? nature of the people which has gone a DoGujarat you feel likeayou long way in making the story have been overspending successful one. in some aspect of your By Pranbihanga Borpuzari business? Read about
Here’s a look at how Gujarat leads the 99 Invest, for the country in ensuring industrial policies are best executed properly. The world of investing By Dinesh Awasthi isn’t as bad as you may
The CII organized a conference to discuss how jugaad can help companies in India and abroad
think. Find out how to plan your financial future the right way
Our Staff Writer
By Lovaii Navlakhi
December 2011 Intelligent Entrepreneur 7 To read more, grab the January 2013 issue of Intelligent Entrepreneur January 2013 7 Entrepreneur To Subscribe, visit www.entrepreneurindia.in
TABLE OF CONTENTS
TECH DEPARTMENT
STARTUPS
120 Optimize Lead Generation Lead generation, a separate area within marketing and sales, can impact your overall sales significantly By Meeta Wasan
122 Retain Talent in a Digital Media Agency 100 Pitch Black The Lenovo X1 is a laptop you would love to own and flaunt. Read to find out why By Ankush Chibber
Retaining employees in a business like this isn’t easy. Learn how you can do it By Rohan Chandrashekhar
106 Power Saver Mandar Kaprekar and Arun Shenoy help reduce the use of electricity through their technology solutions
BEYOND THE BOARDROOM
By Shruti Chakraborty
108 Boys and the Brew Paul Chowdhury and Narayan Manepally's Geist Beer is a natural beer made for the Indian enthusiasts By Shonali Advani
102 All On Board The two new All-InOne’s from HP, Envy 23 and Pro M1218nfs, get a flat out Yes from us
110 Up in Four Gone are the days when building a website was a long-drawn affair. Four SMSs is all it takes now By Shonali Advani
By Ankush Chibber
124 Sound of Music What keeps India’s top entrepreneurs busy outside the boardroom? Venugopal Dhoot, Chairman, Videocon Industries tells us about his passion By Sulekha Nair
REGULARS
SPEND IT
10 FEEDBACK 12 RESOURCES 14 ASK ENTREPRENEUR 16 CAPSULE 134 BACKSTAGE
127 Un Buon Pasto In a premium mall in Mumbai is the Indian outpost of Italian restaurant, Serafina, offering a fine spread By Ankush Chibber
128 A Nawabi Delight 112 Know Who and How
COVER CREDITS
iKen Solutions has developed an artificial intelligence-based system to know customers better
Jyran, a North West Frontier cuisine restaurant in Mumbai, is the place for a lavish meal By Shruti Chakraborty
By Shruti Chakraborty
129 Note-worthy 114 Cook and Share Cherian Thomas and Arun Prabhakar's Cucumbertown lets users share recipes on its simple interface
The fusion Indian cuisine at Zitar, in Mumbai’s Powai suburb, is worth a try By A Correspondent
By Pranbihanga Borpuzari
130 Stronger, Faster, Better
HOW TO 116 Enter into Arbitration Try arbitration to sort out your commercial disputes
COVER DESIGN
Arko Provo Mukherjee
COVER IMAGE Bmaximage
The Chevrolet Cruze has raced into a competitive market. Read about how we score it By Pranbihanga Borpuzari
By Pranbihanga Borpuzari
SHELF LIFE
118 Market a Clean Technology Firm
133 ‘In short, the Maker Movement has arrived’
Read about some ways to market your clean energy venture
Check out what we thought of Chris Anderson’s shot at long form journalism
By Shonali Advani
By Ankush Chibber
8 Intelligent Entrepreneur January 2013
IN SIGHTS
NEWTHINK
RBI’s New Role Playing party pooper to minimize losses
[ R. JAGANNATHAN ]
MUCH HAS BEEN MADE OF the cold war between the Republicans and the Democrats, the US econthe Reserve Bank of India (RBI) and the Finance omy is not going to revive any time soon despite Ministry. In October 2012, when Governor Duvvuri an accommodative monetary policy. The same Subbarao declined to cut repo rates, Finance goes for the European Union. Minister P Chidambaram was miffed enough to The reason: the old linear relationship between suggest that if the RBI did not want to do its bit to a fiscal or a monetary stimulus and economic revive growth, “then we will walk alone”. growth no longer holds. In 2009-11, when rates Since then, the Finance were trending higher, the Indian Ministry has been acting economy was growing at 8.4 In an interconnected frosty with the Governor, percent. In the next two years, and has even talked of taking despite excess government world, it is no longer a close look at the central spending, growth is going down. possible to draw a clean bank’s accounts to see if it is Conversely, even applying line to connect policy hiding any profits from the the fiscal and monetary brakes action and intended exchequer. However, there together may not impact inflais a different way to look tion. As for applying a monetary results at this issue. brake while putting the fiscal While a personality clash foot on the accelerator—as we cannot be ruled out given the are doing in India at present— Finance Minister’s sense of betrayal in October, the less said the better. the fact remains that in today’s complex economic Bane of inflation world, neither the Finance Minister nor the central In an interconnected world, it is no longer possible bank Governor, or even a friendly partnership to draw a clear line to connect policy action and between the two, can really have all the answers intended results. The best that can be hoped for to the economy’s problems. In fact, it may be best is broad movement in the desired direction. And to view their two jobs as essentially contradictory that too, over a period of time. and antagonistic, since their roles are different. Let’s explain this with an illustration. The RBI One has to play cheerleader to the economy, the wants to dent inflation by keeping rates reasonother has to offer a wet blanket when the music ably high. But 18 months after it started becoming gets too loud. But even if both are singing in tune, a hawk on inflation, there is no sign of a cool-off. they may not make beautiful music. This is not the RBI’s fault, for inflation does not Fiscal cliff depend only on interest rates, but several other Consider what is happening in the US. Even factors. One is global commodity prices. If these though President Barack Obama and the US are moderating, there are exchange rates to worry Federal Reserve are more or less on the same about. Global oil prices started cooling off this page—both are pushing for growth rather than year, but the rupee declined, and brought domesinflation control—neither has been too successtic inflation back to the old trajectory. ful. The US economy faces a fiscal cliff this month, The RBI has been saying that it is forced to and no matter what kind of deal is agreed between keep rates up since budget deficits are high. But 18 Intelligent Entrepreneur January 2013
Photo Joshua Navalkar
any attempt to cut deficits—by reducing subsidies on oil and fertilizer, for example—can only push inflation up in the short term.
Role of FM, RBI governor
Since finance ministers are more political animals than RBI governors, risk management in an economy belongs to the latter. Where finance minisNo cure ters see opportunity, central bankers have to look Moreover, slow growth can dent government revefor threats. If Chidambaram sees hope in growth, nues, making the budget deficit rise. So an interSubbarao has to check the downside on inflation. est rate policy intended to cool inflation could end If one were to view Subbarao’s job in this light, we up slowing growth, which can reduce government would not be measuring his success by whether revenues and bloat the fiscal deficit, which in turn he stops inflation in its tracks by raising rates or can worsen inflation, which in turn can spur fears ignites growth by cutting them. of a current account deficit and drive the rupee His job is to apply his mind to the entire gamut down—thus making inflation worse. of risks an economy faces and send the best possiGot it? If you haven’t, no need to worry. ble signal to everyone; especially to those who The world’s best central bankers and finance may be running the ship. For example, Subbarao ministers do not quite get the picture too; because has been saying in veiled terms that the biggest action to deal with one problem can have conserisk to the economy is the government’s inability quences in another area, which may damage the to contain subsidies and balance its budget. Since primary objective in the first place. this inability flows from the political situation of This brings me to two a patchy coalition, his actions If Chidambaram conclusions: one, anybody cannot specifically target who claims that he has a clear growth by lowering rates. He sees hope in growth, cure to the economy’s probmay have to judge the moral Subbarao has to check lems is probably fibbing. This hazard of giving politicians the downside on includes finance ministers what they want and send the inflation and central bankers, whom opposite message, of keeping the world looks up to for solurates high even when growth tions. (Consider how long the is falling. Finance Ministry and the RBI Party pooper have been promising inflation will fall below 7 This is almost exactly what the Governor has been percent, and it still hasn’t done so). And two, the doing. Evidence from the minutes of the Technical core job of a central banker is not to apply pat soluAdvisory Committee that gives him advice on rate tions to known problems, but to function as a risk action suggests that the consensus has moved manager for the economy. towards easing rates. But Subbarao has resisted Risk manager the temptation not because he is unaware of the So, what is a risk manager? In a company, a risk risks to growth, but because he knows lowering manager’s job is to protect the organization from rates may give politicians the opposite temptapotential hazards. He has to insulate it against tion—of not doing anything to cut deficits. weaknesses, both internal and external, that can There are no easy answers in a risk manager’s impact its future. job profile. Fending off one kind of threat may Insuring against risks may have costs, but these involve compromising another cherished goal. But costs have to be weighed against the risk of losing he has to take a decision based on his best judgmuch more by human mistakes or unanticipated ment on the optimal outcome—where losses are threats to its existence. minimized over the medium term, even if gains Even though a company’s future largely depends are not immediately visible. Risk managers are on what the CEO and his top managers do, it is the unlikely to win popularity contests because it is risk manager who can sometimes stand between their job to play party poopers when the dancers a company and disaster. are high on booze and getting out of control. A key qualification for being a risk manager It is their job to bring everyone down to earth must be his ability to be involved with the compawith minimal damage. ny’s goals and yet not be so close to it that he R. JAGANNATHAN is the Editor of Firstpost.com becomes a part of the risk.
To read more, grab the January 2013 issue ofEntrepreneur January 2013 19 Intelligent Entrepreneur To Subscribe, visit www.entrepreneurindia.in
IN SIGHTS
ROUGH DICTION
Doomsayers’ Oracle An intrepid entrepreneur shares her lessons on striving to succeed
[ SHRUTI KOHLI ]
OF ALL THE AWARD-WINNING CLICHÉS attached to entrepreneurship that I have been forced to trip over through my two-year long expedition as an entrepreneur, my favourite is the one which came from my quite-so-favourite uncle from the Punjab. During his brief meeting with me in Mumbai, he had an encouraging piece of observation to share with me, “People become entrepreneurs when they realise that they have no talents to show off and, hence, sell.” It made me wonder how old and worn-out beliefs latch on to our minds like a pitbull on a trespasser’s buttocks.
with such angelic beings. You know how dangerous these speedways are. The only way to keep safe is to keep away. That way, even if you are a destined loser, you will come across as a smashing success—having successfully saved yourself from all the danger lurking around on speedways. Then once you are successful, it doesn’t matter if you are faking it or if it’s for real. You can’t tell the difference anyway.
Cursing detractors
Contrarily, if you have spent all your productive time cursing your doomsayers and thinking of them as being a ball of flame Matter of vision rolling closer to wipe out The first one to go into Besides being intriguing, my your hall of fame, you have the ‘out basket’ is the well-meaning uncle’s statebeen shallow in substance ment was full of vision. It and spectacularly superfirat—the entrepreneur! gave me a vision of an entrecial. It’s time you drove to a This good-for-nothing preneur being a dead rat you dry, parched land, drilled a deadbeat with no spotted in your kitchen and hole in your head and let the particular talents to flung it to your neighbour’s bitterness out. Don’t worry balcony who flung it back about the land. Your bittershow off must go first assuming your cat may prefer ness will find company with dead rats over fish for dinner the cactus and be of some that night. But alas, by then, help to nature. Now drive your cat had succumbed to back and after licking the the who-killed-the-rat curiosity. That’s a tragtar off your Porsche, bow before the many Lord edy, to have two dead animals at once within Wishys, the Puppet Masters! It was because of your premise. Get rid of them! Oops! The first one them that you could reform. That done, you to go into the ‘out basket’ is the rat—the entreshould now settle your derriere on an armless preneur! This good-for-nothing deadbeat with no chair, and reflect. I say ‘armless’, as a chair with particular talents to show off must go first. If it arms gives you the perfect comfy platform to stays there any longer, it’ll only make you curse rest your arms and drift into Cloud Cuckoo Land your existence with its foul smell. leaving the world to do all the reflecting. That The rat and cat story told, it’s not surprising would be scary because no one can tell what the your well-wishers will do all they can to keep you world will reflect. As for you, you’ll definitely from ending like that dead rat. They will apply reflect success! all means to steer you off the success speedway. SHRUTI KOHLI is Founder, Chairman & MD of Spink Turtle Consider yourself blessed if you are crowded 24 Intelligent Entrepreneur January 2013
IN SIGHTS
BRAND VAULT
Back to the Future Indian businesses need to brand themselves better, as they did in the past
[ VIKRAM SOOD ] WE ARE A COUNTRY OF, for and by entrepreneurs running small businesses everywhere. We are a country of 90 lakh SMEs and family businesses. And yet, no Indian brands are sweeping us off our feet. When an emotionally-charged country flocks to see Bollywood, cricket and TV serials, why aren’t we fans of an Indian brand? Let’s begin by asking the right question. Is building a company the same as building a brand? Isn’t it true that you had a Mercedes parked in your mind long before it was parked in your garage? And I am sure you know people who love more than a dozen other companies like them. But wait a minute. Are they only companies? Aren’t they personalities? Don’t they stand for something which means more than the product you eat, drink, hold or drive?
Understanding needs Brand building creates the financial benefit of a constant and early image building, creating a clear value proposition, consistent branding, a designed user experience at every touch-point to delight your consumer. Who doesn’t like being treated well, and who won’t pay a little extra for that? Indian business owners look at branding and marketing as expenses, though every successful owner says brand value makes a lot of difference when you negotiate retail shelf rates and space, or command higher value in exports, or sit with confidence when looking for funding to scale up. But making a brand means commitment, structure, growth, scalability and order. In certain ways, it also means standing up for something, sticking by it and fulfilling your promises as you scale up. Which is what every Indian wants—someone they can depend on and trust. It is part of our family and values system, it’s in the nurturing relationship of parents and children, aunts and uncles who want to see you married and settled. Deep within us is the need to find someone who
understands us. Centuries of foreign rule have not taken away our need to belong and be with each other. For an avid traveler, it must be obvious—in India, unlike anywhere else in the world, you don’t even die alone.
Bigger, better So, how is it that market leaders here are nonIndian brands? Maybe we got so busy quick-fixing a broken country post-independence that we forgot to build it with a vision. We became great at jugaad, but forgot we need to build something bigger, which outlasts ourselves. For a 5,000-yearold civilization like ours, a few hundred years is ignorable. We were known by our products all along the Silk Route once; we never faltered on quality and always delivered the same experience. Indian brands were synonymous with exotic back then. And if you see today, we are as exotic once again—for investments, new products etc. The world may call us an emerging economy but I feel we are a re-emerging economy. And if companies are to park their businesses in people’s minds, they need to stop thinking like quick-fixing companies. We need to strategically re-think every think, and take sure steps towards scaling up and creating loveable brands. Branding makes good business sense as it helps scalability and ensures a business outlasts the current generation and lasts many quarters. We need to build the biggest powerhouse of brands for the next century from India—but in the right way. Over the course of the following articles—I will share the things needed—milestones and pitfalls on the road to scaling up your SME or family business from the perspective of branding and integrated marketing. VIKRAM SOOD is the Co-Founder & CEO of And Then Consulting
To read more, grab the January 2013 issue Intelligentof Entrepreneur January 2013 29 Entrepreneur To Subscribe, visit www.entrepreneurindia.in
IN CONVERSATION
‘I have great belief in India’s entrepreneurial talent’
Global venture capital major New Enterprise Associates (NEA) has $13 billion of committed capital worldwide, with a $2.6 billion fourteenth fund which closed in 2012. NEA has been investing in India since 2004, and opened a dedicated entity in India in 2008. Bala Deshpande joined NEA in 2008 as Senior Managing Director for NEA India and has now grown NEA’s India portfolio to around $270 million. With investments like Naaptol, Nova Medical Centers and ValueFirst, NEA’s strategy in India is to invest in mid-market growth space with deal sizes over $10 million. In a wide-ranging interview with Sourav Majumdar and Bindi Shah, Deshpande talks about the entrepreneurial scenario in India, NEA’s strategy and the challenges in the investments space. Excerpts: 32 Intelligent Entrepreneur January 2013
Q: A recent Gallup poll had shown India is one of the worst countries in Asia for entrepreneurship. From a venture capitalist perspective, what is your view on this? A: My own belief is that we tend to swing between extreme positivity and extreme negativity about our country. It is, in some sense, a bipolar kind of a situation because at some points we truly believe we will grow by 7-7.5 percent and when the downtrend starts we say it’s going to be 4 percent. These extremes are a reality but as a VC I believe that despite this we can be a truly great investment destination. Clearly, there is a reality which is beyond all these macro numbers. There is a very strong underlying micro opportunity which is very important for us to participate in. Q: But if the basic foundation of entrepreneurship is not strong, then doesn’t everything else flounder? A: I think it’s a generalization. Yes, the sentiment does make a difference, especially if you’re wanting one of your companies to go to the capital market or every other day there’s a scam that breaks out. But if you look at what our entrepreneurs go through to become who they are, it is truly marvellous what they have achieved. We have the highest cost of capital at 13 percent, a fairly uncertain regulatory regime which is dictated by the mood of the political powers. So we have to deal with that. If the service tax goes up we have to live with it, if the dollar goes up we have to bear it. We have very few enablers in our economy; corporate governance is also really patchy here, in the sense that there are some extremely good guys and some extremely bad guys. But I have great belief in the entrepreneurial talent of our country, given the headwinds they have to deal with. There’s been a lot of learning. I started on the venture capital side in 2000. From 2000-12 I have seen changes in the type of entrepreneurs, the kind of mindset change that has happened. They are far more savvy Photos Joshua Navalkar
and have woken up to some big realities. One big reality is: “I don’t have to build this business for my son. I am here for creating value and for realizing that value.” The big reality is what goes around comes around, so you can’t get away with sloppy practices. The other thing is also of understanding the role of talent. In 2003-04, we would talk of hiring a world-class CFO, once, twice, three times, but today we almost talk about it just at the time of our investment. It is equally true for HR or even for CEOs. I am not saying we’ve undertaken the complete journey of building the perfect organization chart, but in the level of awareness if we were three earlier, we are now a six or a seven.
“If you look at what our entrepreneurs go through to become who they are, it is truly marvellous what they have achieved.”
These are the most important elements of a business, right? I think there’s a definite amount of entrepreneurial talent and far more awareness about what it takes to create an organization. If you look at the fundraising that entrepreneurs have started engaging in, it’s not just about raising $2-3 million. Today people are understanding there’s a quantum play in fundraising which is really very important: to shore up their balance sheets, take on aggressive bets whether in M&A or in market expansion. So the dollar amounts being raised, both in debt and equity, have definitely gone up. Q: Do you think we are coming closer to a stage where a truly global organization can be built from the startup stage from India? Or is it still a distant dream that another Google or Facebook will come from India some day? A: My sense is we’re far away from that. We have to get seriously good
enterprises. I am not saying there aren’t any—yes there is the Infosys, there is Tata, there are Birla companies and other enterprises. But we’re far away from the dream of a ‘Facebook from India’. One of the biggest ingredients for that is a very, very large market. If you were to look at names like Facebook or Google or others, they were born in a very large market. When your domestic market is significant like in China—in manufacturing they have created some impact—their internal cost structure and large domestic market are the two key ingredients. In the US, NEA has seen significant scale in some of the startups we have looked at. Some of our companies have grown from scratch to $250 million of revenue. So the day India has that size of the market – and it may be possible because we are talking of becoming a trillion dollar economy, come 2020 – it will happen. But it’s a while away. Q: From an NEA perspective, you fund later growth stage companies but act like a venture capitalist. It’s a bit like being a private equity investor with a VC mindset… A: In the US we follow a very diversified investing approach which has augured very well for the firm. I am trying to adopt that in India because we believe that money should chase opportunities and not just be invested for the sake of investing. So starting from sector diversity which is a given, we also have stage diversity. We have very strong early stage investing in the US as well as venture growth equity. So our deal sizes have ranged from $5 million to as much as $75 million. It is actually the strength of NEA and it has been able to give back superior returns to the LPs (Limited Partners) on the strength of this diversified strategy. Q: In India, it’s above $10 million, isn’t it? A: In India when we were setting up, we said let’s define a go-to-market strategy which will make sense. In India, it’s a lot of hard work: you have to see 3,000 deals to do 10. That’s what
To read more, grab the January 2013 issue Intelligentof Entrepreneur January 2013 33 Entrepreneur To Subscribe, visit www.entrepreneurindia.in
COVER STORY
EXCLUSIVE
INDIA VC⁄ANGEL CONFIDENCE SURVEY
46 Intelligent Entrepreneur January 2013
Illustration Chaitanya Dinesh Surpur
Domestic turbulence and global macro headwinds aside, the country’s top venture capitalists and angel investors still say they will invest in India in 2013. Will the next year see the return of the good times? Which sectors will they bet their money on? We find out ANKUSH CHIBBER
Photo Bmaximage & Nachiket Gujar
To read more, grab the January 2013 issue of IntelligentEntrepreneur EntrepreneurDecember January 2012 2013 47 Intelligent Entrepreneur To Subscribe, visit www.entrepreneurindia.in
SPECIAL FEATURE
[ BLOOD TIES ]
A FAMILY O Not all family businesses are run the same way. We are sure not many run it the way Bahrain’s Al Alawi family does BINDI SHAH
W
alla Al Alawi was born as Hadi and Hayat Al Alawi’s eldest daughter in the Kingdom of Bahrain in 1980. As an Alawi descendant, little did she know the role in life and business that awaited her when she grew up. By the time Walla was ready to enter college in the mid-90s, her father Hadi had already established the Al Hayat Group, a venture he had decided to dedicate to his wife and six children. According to Hadi’s original plan, he wanted to build six companies ready for all his six children by the time they finished their education and were ready to enter the world of business. The Al Hayat group would be the parent under which the six ventures would flourish. He had a word with Walla about her career interest and passion and they mutually concluded that she would like to pursue fashion as an industry and build her brand. That was that. Women’s clothing and accessory brand Walla was launched in 2001 and Walla Al Alawi stepped in as founder and head of this venture.
An unusual way
SIBLING REVELRY: Hadi Al Alawi 58 Intelligent Entrepreneur January 2013
“My daughter stepped into the world of business into a company that she both loved and owned,” says a proud Hadi Al Alawi, Chairman, Al Hayat group. Hadi is only carrying forward the legacy handed over to him by his forefathers— Jaffer Al Alawi (grandfather) and Sayed Kadhem Al Alawi (father).
F ENTREPRENEURS Jaffer Al Alawi was instrumental in starting the family’s first business venture in pearls. Later, they diversified into real estate and other areas. He handed over this business to Kadhem, who made it strong and diversified it further. It was Kadhem who first came up with a unique model of seed funding to encourage entrepreneurship among the next generation (Hadi’s generation). Kadhem was father to 13 children—seven girls and six boys— and wanted to make each of them into successful entrepreneurs. “Very often, family businesses in the Middle East don’t survive generations due to succession challenges. They are forced to close down. The best way to keep a business running from generation to generation is through transparency and good governance,” says Hadi. “My father understood this well and devised unique ways to make his children successful business people without stepping onto each other’s toes and creating harmony within the family on a larger existential scale,” he adds. Around 1990, when Kadhem Al Alawi felt he will not live long, he decided to give $1 million to each of his 13 children. “I want to see what you can do with this $1 million while I am alive,” he told them. While Kadhem was very keen that each of his children starts his or her own venture, he laid down certain basic rules for them to follow. He told his children that their respective businesses should not compete against the original Alawi family business handed over to him by his father Jaffer Al Alawi, and neither should any of the businesses started by the 13 siblings compete against each other. But they could be complementary and support each other. “My father’s main aim of laying down this non-compete
clause was to avoid family feuds, jealousy and competition among us siblings,” stresses Hadi. Each of Kadhem’s children had the advantage of the main family business and the Alawi name backing them as they embarked on their own entrepreneurial journeys.
The war and more It was in 1990 that the Iraqi forces invaded Kuwait under Saddam Hussein’s leadership and the IraqKuwait war unfolded. The Iraqi occupation of Kuwait lasted for seven months and this led to disturbance in the entire region,
"ALL OF US WERE MADE TO UNDERSTAND THAT HE WHO FEARS GOD, FEARS NO ONE ELSE. AND SO WE LEARNT TO FEAR NEITHER SITUATIONS NOR PEOPLE" - HADI AL ALAWI, CHAIRMAN, AL HAYAT GROUP
including Saudi Arabia and Bahrain, to where some of the Kuwaiti armed forces had escaped. Hadi’s brothers and sisters, looking at the uncertainty around, decided to deposit the $1 million given to them by their father in the bank and wait and earn interest on the same till the war got over. Hadi, however, was not one to wait and waste any time. He went on to become the first among his generation to approach his father with a list of sectors he would like to operate in. There was deep thought involved behind these
choices that Hadi made. He consulted his six children—three sons and three daughters—as to what their interests were and decided to build a business for each of them. The parent group would, of course, be the Al Hayat group that literally means ‘The Life.’ The name stems from Hadi’s wife’s name, Hayat. The group became functional in the early 90s and today has business interests in communication, construction and engineering, fashion, furnishings and interior design, heavy equipment, real estate, technology and travel. Hadi was in the right place at the right time. He admits, “My father created a win-win and healthy situation for all of us. I wanted to carry forward his legacy in some way and knew that the value of $1 million would not be the same by the time my youngest child grew up. So I decided to build separate companies for each of them, incorporating the values and vision shared by my father, and hand over the same to each child when he or she grew up and finished his or her education.” Today, Hadi’s children, including Walla, are all involved in the family business, growing and running each unit independently. Meanwhile, Hadi is still a partner with his 12 siblings managing the original Alawi family wealth and business. There is now a trust created in memory of Kadhem Alawi that is run by his children. Not to forget, each is also running his or her independent business successfully. After the war, Hadi’s other siblings followed suit and each rolled out his or her own venture.
Dreams from my father Sayed Kadhem Al Alawi imparted four main principles to his children and also built his business centered on
To read more, grab the January 2013 issue of Intelligent Entrepreneur January 2013 59 Entrepreneur To Subscribe, visit www.entrepreneurindia.in
LEGACY
[ STORE LORE ]
SUCH A LONG
JOURNEY W
hen anyone says entrepreneurship is a part of our history or is in our genes, do you connect entrepreneurship to having been a part of our freedom struggle as well? Imagine going to a store that has been a part of India’s Swadeshi Movement. Not something you expect to find outside a museum, right? Welcome to The Bombay Store, whose founder and first director was Lokmanya Tilak. The first store was visited by the likes of Mahatma Gandhi, Jawaharlal Nehru and Vijayalakshmi Pandit.
The Bombay Store is over 100 years old. From being a part of the freedom struggle, witnessing economic downturns to dealing with globalization, it has traveled a good distance
A rich lineage
The new face
The Bombay Store was founded in 1906 and was originally called the Bombay Swadeshi Cooperative Stores Co. Ltd.. It was a joint stock company that was founded to promote the sale of Indian products. Amongst its first set of directors was also Ratanji Jamsetji Tata, Dwarkadas Dharamsey and other prominent people of the time. The first store was opened in what is now the Times of India building and was inaugurated by Dadabhai Naoroji. The company expanded rapidly as the Swadeshi movement grew. Outlets were opened in a number of other cities and manufacturers were producing Indian-made goods to sell through the store. With time, as the Swadeshi movement lost significance and the economy changed, most outlets were shut down. The only operational outlet was in Mumbai (then Bombay), which is currently where the store stands, in Fort since 1938. Asim Dalal, Managing Director of the company now known as The
In 1991, the Dalal family bought a majority stake in the company and has been managing it ever since. From a single store, it has now grown to as many as 12 outlets located in Mumbai, Pune, Bengaluru and Goa. Until the early 90s, the store was still known as the Bombay Swadeshi Store. A few years after the Dalal family bought the company, it was renamed as The Bombay Store. “With globalization having swept the world, we realized that the approach to how the store was run had to change. Before we revamped the store, many perceived it as a government-run emporium,” Dalal recollects. The Bombay Store changed the traditional set up it was operating then with people manning counters, to the current self-service format. Explaining how the Dalal family revolutionized the store, he says, "We also brought in design experts from National Institute of Design (NID) and National Institute of Fashion Technology (NIFT), expanded
66 Intelligent Entrepreneur January 2013
SHRUTI CHAKRABORTY Bombay Store says, “I remember coming to the store often with my grandfather as a child and finding it fascinating. One day, my father informed me that we had some shares in the company.” The company was one of the first retail organizations to be listed on the Bombay Stock Exchange.
the product offering and made the store spacious, wherein customers could walk in and shop on their own.” The company tries to remain true to its essence and sells only Indian products crafted by artisans and Indian manufacturers. Besides handicrafts and artifacts, the store also sells furniture, clothes and fashion accessories.
Taking it forward Bejan Barucha, President-Operations, The Bombay Store, says the biggest challenge for the company is in dealing with artisans and small producers because it prevents them from having the advantages of mass-produced goods. “If a customer buys a product from us and wants another exactly like that, it is sometimes a challenge to provide it,” he admits. The products are mostly sourced from parts of Rajasthan, Gujarat, West Bengal, Agra in Uttar Pradesh and other parts of north India. “We try and deal with manufacturers or dealers who work with artisans and tribals, instead of dealing with the latter directly, as most of them cannot provide the quantities we need as we try to scale. Also, it becomes easier to deal with the artisans' requirements such as raw material, manpower etc.,” informs Dalal. The Bombay Store has a wide range of products across the price spectrum ranging from `100 for a key chain to
A PIECE OF HISTORY: Asim Dalal at The Bombay Store
`1.3-1.4 lakh for a Pashmina shawl or a silk carpet. While the plan is to expand to newer locations, the company faces similar challenges like most others in the retail industry. Dalal says, “The rentals are high and often unreasonable. Looking for the right place is important for us.” The Bombay Store has set up outlets in malls and has one located at the Mumbai Airport. This, Dalal says, brings them the advantage of not having to look for customers. Since the products now appeal to expatriates and people looking for souvenirs, travel retail is an ideal way for them to go. Setting up a 1000-square foot store at the malls costs anywhere between `25 lakh and `30 lakh. Including the merchandise, the setup cost of a single 1,000 sq ft store is `50 lakh. The flagship store of the company is spread over 10,000 square feet. The company is looking to add another store each in Mumbai and Bengaluru. It has not yet expanded to Delhi and NCR or the eastern part of the country. Dalal reasons Photo Neha Mithbawkar
a lot of their products come from these regions and there are a number of retailers selling similar products
“WE REALIZED THAT THE APPROACH TO HOW THE STORE WAS RUN HAD TO CHANGE. BEFORE WE REVAMPED THE STORE, MANY PERCEIVED IT AS A GOVERNMENT-RUN EMPORIUM” - ASIM DALAL, MANAGING DIRECTOR, THE BOMBAY STORE
in those areas. “We plan to expand to Delhi once we can customize our product offerings to fit the preferences of the local consumers and then widen our product portfolio.”
Nurturing a startup To deal with the problem of the high cost of brick-and-mortar stores, the company has begun to sell online since October. It also launched its brand The Elephant Company, which makes products targeted at the youth, on a store-in-store model in February 2011. The Elephant Company, Dalal explains, will function as a separate business from The Bombay Store. “It is like our startup venture.” While it has started by setting up kiosks within The Bombay Store premises, the plan is to expand The Elephant Company separately. The company is debt-free so far, Dalal informs. They are, however, looking to raise equity capital for The Elephant Company, which will have outlets along with an e-commerce model. So far the going has been smooth. Last year, The Bombay Store clocked in a turnover of `27 crore, excluding revenue from The Elephant Company. “This year we are targeting a topline of `35 crore,” Dalal says. Legacy is clearly good business as well.
To read more, grab the January 2013 issue of Intelligent Entrepreneur January 2013 67 Entrepreneur To Subscribe, visit www.entrepreneurindia.in
BANK CHAT
‘Ours had to be a high level of transformation’ The Kolhapur-based old private sector Ratnakar Bank, which was set up in 1943 as a community bank, is now in the midst of a massive transformation. After taking charge in July 2010 as Managing Director and CEO, Vishwavir Ahuja, the former India boss of Bank of America, has brought in several top professionals from institutions like Citi, YES Bank, Bharti Axa Life Insurance and others and is re-wiring the bank to suit the current environment. In 2011, a clutch of leading investors —including HDFC and Norwest Venture—came in with `720 crore to power the bank’s vision for growth and transformation. In the first of this new series, Ahuja and his colleague Rajeev Ahuja, the head of strategy for the bank, talk to Sourav Majumdar about the transformation agenda and how they are building a new, modern bank brick by brick. Excerpts:
Q:
Last year, you got in a slew of big frontline investors to put `720 crore into the bank. These investors were obviously convinced of the strategic plan you have drawn up. Can you give me a few key pillars of that strategy?
This was a five-year plan from 2010 and envisaged many things to be done. We were very clear that it had to be a high level of transformation and we had to ensure everybody’s complete buy-in and support—to start with, that of the entire board. As far as shareholders were concerned, we knew a lot of money had to be raised. Not a small quantum of money—a large quantum had to be raised, because the agenda we had put in place was not incremental, but VISHWAVIR AHUJA (VA): In July 2010 or so, we stepped in, very transformational. Knowing fully well that the new in the formal sense. The first step was to have a long-term set of shareholders who would come in would change the strategic roadmap which had to be completely socialised character and quality of the shareholding and support the and blessed by the board new vision, the vision had of the bank. So let’s just to come first. say we put something in So we did that. The rest “There is an opportunity in India to create place immediately and of the team started coma highly governance-driven, technologythe board completely ing on board later—say endorsed it unanimously. September-October 2010 focused, product-oriented bank which can It also involved a certain onwards. So, for all practiaddress the emerging opportunities” amount of adjustments cal purposes we are at a that had to be made in two-year mark now. Now the composition of the I’ll hand it over to Rajeev board, where we were able to bring in some very eminent to articulate the components of that plan. people. At this point, we brought in Jairaj Purandare from RAJEEV AHUJA (RA): What’s useful to take up from here PricewaterhouseCoopers and Narayan Ramachandran, is what was envisioned was a bank—in five year’s time— former country head, Morgan Stanley and some others. which is deeply rooted in the realities of India in all kinds The combined board endorsed the strategic growth plan of markets, in entrepreneurship, in emerging India. A lot which we outlined as Vision 2015. of us came from different backgrounds and it was a pretty 90 Intelligent Entrepreneur January 2013
TRANSITION TIME: Vishwavir Ahuja (left) and Rajeev Ahuja
eclectic mix of people. But there is an opportunity in India to create a highly governance-driven, technology-focused, product-oriented bank which can address the emerging opportunities. There are several institutions which have shown us the way in the last 15-20 years. It’s not something which is untested, but few banks were attempting this format, this level of transformation at that time. So the vision was something people bought into. We were not looking to build a corporate finance institution or a niche one. We had a very strong history. We were always a modest size institution, but the catchment we were engaged in was always a very large economic zone— agri, SME, engineering. So a part of the agenda was also to enhance it, strengthen it and regain our pride of place. The opportunity in India is certainly in cities like Mumbai and Delhi but the bigger ‘delta’ is in markets which are outside. In some manner, what Mumbai and the big metros went through in the last 20 years since the banking liberalisation is already happening in these cities and towns. So we were only trying to appropriately manage and fit ourselves there. Photos Nachiket Gujar
Q: If I ask you to explain in a single line what Ratnakar Bank wants to become, what would that be? RA: (Laughs) I’m going to take two lines to explain this. As a bank we touch and interact with various points in an economic society. You talk to individuals, small-, medium-sized and large businesses, rural and semi-urban businesses. But if you want to look at India’s defining characteristic over the past 15-20 years and for the next 20-30 years, it is the dynamism of India’s entrepreneurship at various stages and various parts of the economic chain. So while we don’t have a tagline saying ‘Ratnakar, the bank for XYZ’, if you look at the DNA we’re creating, we’re actually looking at creating new businesses, modernising them, whether it is the individual or the business. Obviously, all of this doesn’t happen on Day One. You need to get your core right, first. The core starts with governance, operations, technology, products, the quality of people and credit standards. The challenge is to create the core very well. We divided our journey into three parts. One is the consolidation and awareness and building some things quick. Then, really building it for the long haul. We had a CBS (Core
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START UPS
[ NEW FRONTIERS ]
KNOW WHO AND HOW iKen Solutions is applying artificial intelligence-based techniques for personalizing the customer experience of consumers SHRUTI CHAKRABORTY
S
iddharth Goel, 33, was running his first startup Cellent Technologies, a mobile marketing solutions company, out of his father’s office in South Mumbai. Along his journey with the company, he felt the need to look for analytics solutions that could improve the quality of Cellent’s services. At the same time, in IIT Bombay, Professor Rajendra Sonar, 43, had developed a platform as an extension of his Ph.D research applying artificial intelligence to provide improved business intelligence to companies. Sonar had been trying to build a business model around his research and formed Mumbai-based iKen Solutions in 2005, but not much had taken off. Goel’s company began working with Sonar to build a product based on the research. Simultaneously, Goel was trying to raise funds to get Sonar’s startup off the ground. The turning point was a B-Plan competition organized by non-profit organization TiE in 2008, where the firm got attention and mentoring from Pravin Gandhi of Seedfund. On his advice, Goel and Sonar joined hands to help iKen Solutions grow.
The early days Goel brought in investment of `4 crore and took over as CEO and Sonar as CTO of iKen Solutions. The next few 112 Intelligent Entrepreneur January 2013
HIGH POINT Promoter’s investment: `4 Crore Clients: TCS, Comviva, HCL Turnover Target: `15 crore for FY14 USP: Applying artificial intelligence techniques to analytics, Treating customers on the basis of N=1 giving personalized analytical solutions, Integrating analytics into the operating systems creating a smarter operating system years were spent in improving the product offering to create something that would make market sense. During this time, the company was being incubated at IIT Bombay’s startup incubator—Society for Innovation and Entrepreneurship (SINE). “A lot of analytics today works on the basis of creating buckets or groups of people. But within every group, different people have different needs,” Goel says. iKen Solutions aims to resolve this problem with its web-based platform. The software developed and now used by iKen Solutions is called Mooga that provides a framework to create personalized experiences on an N=1 basis using artificial intelligence
techniques. This means it treats every unit of analysis as an individual and not a group. Mooga uses machinelearning techniques, or case studies, along with business rules which allow it to adapt to different situations where personalization is required. It works towards making customer experiences intelligent, therefore it is useful for businesses to understand and analyze consumers on an individual level.
Real intelligence While the software has so far been applied to value-added services for mobiles, e-commerce and now also for smart television, it can be of use to several other sectors too. “The platform can be used in a number of other applications. We are exploring media and entertainment as a possible sector. It can have significant impact on e-learning by personalizing education,” Sonar explains. “The software can understand what each student needs based on examinations results, learning abilities, and find relevant articles that will help a student.” The company, in its initial stages, had begun by creating solutions for banking and insurance, including tracking fraud, but Sonar said they found it a very difficult space for them to penetrate. “Most analytics companies look at three criteria—What, When, Where. Our platform integrates the ‘Who’ along with ‘What’, ‘When’ and ‘Where’,” Goel points out. “The problem is well-known and everyone is looking for personalization. There are a number of analytics companies trying to resolve the same problem, but our approach is different. Our results are qualitative rather than just quantitative,” he says. Another advantage it adds is integration of analytics into the operational functioning of a company. “How you use data provided by analytics is left to the operations side of a company. In our case, we provide insights based on analytics and a service that allows you to integrate the findings
MATCHING IDEAS: Siddharth Goel (left) and Rajendra Sonar
into your operating systems, thereby making them smarter.”
Working with the big boys The startup has an impressive client list with names like TCS, Comviva, HCL and one of India’s largest telecom operators (name undisclosed), for whom it is working on personalizing value-added services like caller tunes. This has already resulted in a 180 percent increase in the number of downloads. In the Smart TV space, the company is working with HCL. The aim is to create a service that shows what an individual customer is likely to watch or like, based on an in-depth understanding of other programs the viewer watches. The parameters measured by the platform can be customized according to a client’s requirement, Sonar explains. For example, if it’s a music video, not only does it make suggestions by the Photo Nachiket Gujar
wisdom of crowds, it also looks at other parameters like the melody, music directors, artists, to bring out more relevant results.
Making business sense Ashwin Raghuraman, Vice President of India Innovation Fund says, “It’s often a challenge for venture capitalists to evaluate technology innovations before they have gone to market. The gestation period of such companies is relatively long, and this is one reason that technologies were being created but many weren’t made into commercially viable businesses.” India Innovation Fund invested in iKen earlier this year, while it was still at a pre-revenue stage. What works for the company, according to Raghuraman, is that the timing is right, personalization is picking up rapidly, and their solution can be applied across sectors. Since it’s a B2B2C model, it
will take the firm a long time to make inroads into a sector and they will have to dedicate heavy resources to one client, according to Raghuraman. He estimates that the company will take another three years to scale to a decent size. At this point, iKen generates revenue from a licensing fee and an annual maintenance charge. This, depending on the customer’s requirement, could be monthly, yearly or multi-year licenses. “We’re past the product risk phase, we know it works. Also the market is starting to accept us, but we are at the phase where executional and operational challenges could be a problem,” he admits. This year the startup made a public impact when it was recognized by NASSCOM amongst Emerge 50 Award winners in the Innovation category. Hopefully, this could give the founders a boost to overcome future challenges intelligently.
To read more, grab the January 2013 issue of Intelligent Entrepreneur January 2013 113 Entrepreneur To Subscribe, visit www.entrepreneurindia.in
HOW TO
Optimize Lead Generation Lead generation can impact your market sales if used in the right way. Read on to find out how MEETA WASAN
T
raditionally, marketers have focused on the various Ps and Cs—product/pricing/ promotion/place or the alternative, which is consumer/cost/convenience/communication. What gets missed, however, is the gap between
120 Intelligent Entrepreneur ď‚„ January 2013
marketing and sales, particularly in the case of corporate sales, where the person who consumes a product or service is not the person who pays for the service, and is often not the person who makes the decision.
Illustration Chaitanya Dinesh Surpur
The answer for this gap is lead generation which has recently been identified as a separate area within marketing and sales. The skills needed to run a successful and optimal lead generation program are just as unique as the dexterity required to produce a successful creative campaign or execute any areas of the marketing mix. Lead generation programs can be tied in closely with a ROI-based model and can be cost-effective, if managed well. However, there are certain steps that one must keep in mind to be able to get there. Here are some ways to optimize lead generation: Define a lead A lead may vary from company to company. For instance, a marketing team’s definition or need may be different from that of a sales person; a lead for a salesperson belonging to a large enterprise may be different compared to that of a sales person who works in the SMB space. The crucial point is that all users and stakeholders of a program should be on the same page and have the same description of a lead in their minds. The alternative is a constant level of dissention between the lead generators and the sales team. In any situation, there are four essential parameters that must be met for a lead to be a lead. They are: a budget, the authority to purchase, a well-defined need and a known time frame for procurement. These parameters should be documented to ensure that there is no ambiguity at any end and all expectations are met with, while generating a lead. Know your product It is imperative that the marketer understands the product and solutions well. A thorough analysis of the product, its advantages, disadvantages, positives and negatives is crucial. A complete SWOT analysis and a competitive analysis are needed before it can be positioned well. Understand your target market and audience It is important to know your customer and their point of ‘hook’. A successful lead generation program needs to ensure that a ‘hook’ is identified for all stakeholders within the account. For example, a typical Enterprise Performance Management (EPM) solution will be best positioned with the ‘Office of the Chief Financial Officer (CFO)’ as it needs the help of a financial
team to look into such solutions. However, the Chief Information Officer (CIO) and his/her team will be a great influence in their decision-making process. Further, an EPM solution is usually a high-ticket item and it may only be positioned within a large enterprise. A complete breakdown of the geography, companies with a buying power, name and contact information of the buyers and influencers is mandatory. Hence, it is essential to map your target audience. Design a ‘Go-To-Market’ strategy Every lead generation effort has a goal besides simply generating leads. We may be creating leads based on a particular need—cost-reduction, timereduction, meeting government compliance, etc. For instance, a lead generation program can run for a month or if a company is attempting to build a pipeline, it could take six months. Be clear on your program pitch State the reasons why a customer should look at or try your product. The key to long-term success is tuning the particular hook—to be able to generate a large number of leads in a cost-effective manner—just as a fisherman changes his bait. Focus on your callers skills’ This is one of the most important steps if we were to run an optimal lead generation program. Marketers need to ensure that callers or sales teams have the right attitude, right training and the right skill sets to be able to represent the company and its solution well. It is an extremely difficult job to find a C-level executive on the phone and even more difficult to retain their attention. A caller may often have to make an impression in the first minute of the call. A well‐thought out pitch must be put together cohesively and delivered, to engage the caller in a constructive conversation. Issue of measurement Before starting a lead generation activity or program, one must put into place measures to estimate each investment and activity outcome, so that one can take corrective action and measure as quickly as possible. MEETA WASAN is the Founder and Director of Doon Consulting
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BACK STAGE
SHOULD YOU DANCE? Choose an answer. Tally your points ROSS MCC AMMON 1. How long has the party been going on? a. Just started (-10) b. About an hour (0) c. Two or more hours (1) 2. What’s your favorite euphemism for dancing? a. Cutting a rug (-7)
b. Getting down (-6) c. Showing your stuff (-5) d. Busting a move (-3) e. Getting your swerve and/or freak on (0) 3. Pick the word that best characterizes your feelings about dancing. a. Stupid (-5) b. Other (0) 4. Is some sort of tasty punch being served? a. Yes (3) b. No (-3) 5. Have you ever been employed as a dancer? a. Yes (2) b. No (-5) 6. How senior are you? a. Boss (-10) b. Senior-level management (-8) c. Middle management (-6) d. Employee (-4) e. Intern (-20) f. Steve, the guy who comes in to fix the copier every now and then (10)
Less than 0 points: You should not be dancing at the holiday party. 1 to 9 points: Under exactly the right condition—it’s late, someone turned up the music, the punch bowl has been refilled, you are quitting in a couple of weeks anyway—you will be forgiven for dancing. More than 10 points: You are Steve. And you should be dancing. 134 Intelligent Entrepreneur January 2013
Illustration Chaitanya Dinesh Surpur