Entrepreneur November 2011

RICHARD BRANSON AND HIS SUCCESS MANTRAS è INSURANCE AND FINANCIAL PLANNING

NOVEMBER 2011  VOLUME 3  ISSUE 3  Rs 100

HEALTH

WAYS TO BENEFIT FROM THE INDIAN HEALTHCARE BOOM

FUNDAS 17 HOT BUSINESS OPPORTUNITIES

TIPS TO DEAL WITH RULES AND REGULATIONS

HOW TO HIRE A PR FIRM MANAGE LABOR STRIKES USE SOCIAL MEDIA MARKETING START BRAND MERCHANDIZING STEVE JOBS

1955-2011

WHAT ENTREPRENEURS CAN LEARN FROM JOBS

table of contents 26

64 INDIA'S HEALTHCARE BOOM! 65 IN THE PINK OF HEALTH

Entrepreneur tracks the opportunities in healthcare and biotechnology, with an eye on how these segments will change the face of the country’s healthcare sector.

By Sunita Mishra

82 “BIOTECH SECTOR NEEDS VENTURE FUNDING FROM THE BEGINNING” Kiran Mazumdar Shaw, Chairman & Managing Director, Biocon Ltd says the biotech sector has actually grown and been nurtured in the country because of the MSME sector and the sector owes its status to the SMEs in India.

By Pranbihanga Borpuzari

TECH LEGEND 48 STEVE JOBS AN

EXTRAORDINARY CAREER We look back at how the Apple founder built a business that revolutionized the tech industry.

52 WHY ENTREPRENEURS

LOVE STEVE JOBS Know what made Steve Jobs so special that he existed on a level above his company and its products.

By Simon Sinek

54 REMEMBERING STEVE JOBS Here’s a collection of reactions on Jobs’ death from fellow entrepreneurs, tech personalities and other notable figures.

56 10 THINGS TO THANK STEVE JOBS FOR A flashback into the extraordinary life of Steve Jobs.

6 Intelligent Entrepreneur  November 2011

INSIGHTS 18 THE IMPORTANCE OF INSURANCE IN FINANCIAL PLANNING Ranjeet S. Mudholkar on paying a small charge to cover a low-probability contingent event, the happening of which can inflict a huge loss.

20 WHY SHOULD BIG DOGS BITE? Nandini Vaidyanathan opens a window into the despairs of a rookie entrepreneur.

22 CREATING GLOBAL FOOTPRINT Mitali Bose on the importance of right planning and preparation as an entrepreneur prepares to leave home shores and expand to the foreign lands.

24 PUSHING THE LIMITS

Bharat Banka highlights why it is important to have a nose for behavior as you scout for customers and investors .

26 THE BUSINESS OF SUSTAINABILITY Richard Branson on what sustainability exactly means and how an entrepreneur can contribute towards it.

28 THE LINK TO BETTER LEADS Ann Handley takes a look at an old social media platform's new lead-gen value.

IN CONVERSATION 58 “YOU MUST IDIOT-PROOF YOUR PRODUCT” In conversation with Entrepreneur, Krishnakumar Natarajan, Co-founder, Mindtree, shares several events that shaped his entrepreneurial journey, experiences with the IT industry and Mindtree’s role in the same.

By Shonali Advani 62 “THINK BIG SUPPLY BIG” Kishore Biyani, CEO, Future Group, says Indian SMEs should now look to increase scale and productivity to benefit from the growth story.

By Pranbihanga Borpuzari

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NEW ECONOMY 30 TITBIT Read on to know how an iPad app is upending how you will eat out in the future.

By Ankush Chibber

SPECIAL REPORTS 34 “MOST ACQUISITIONS ARE

EMOTIONAL DECISIONS” Phaneesh Murthy, CEO, iGate Patni, shares experiences from his entrepreneurial journey and endows entrepreneurs with the real Guru Mantra.

By Shruti Chakraborty

37 SME LEADER’S CONCLAVE 2011

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Leaders of the SME sector discuss business and financial challenges faced by the small and medium enterprises.

By Shruti Chakraborty

38 DREAMING BIG, MAKING IT HAPPEN Like-minded successful women share their dreams and concerns at TiE Stree Shakti Conference and Awards, 2011.

By Bindi Shah

OPPORTUNITIES 40 HEALTHY FIGURES Delivery and access to healthcare information in India is still fragmented and hasn’t created any far reaching impact on general levels of health. The opportunity for entrepreneurs is out there.

By Shonali Advani

SOCIAL ENTREPRENEUR 46

46 BUILDING VALUABLE VILLAGES Read on to know how a rural-based enterprise, Drishtee, is creating entrepreneurial opportunities in rural India.

By Smriti Mudgal

STRATEGY 84 SEEDS OF FUTURE

Read on to know how Trikaya Agriculture Pvt. Ltd. has set a benchmark for vegetable growers and made the impossible happen.

By Sunita Mishra

November 2011  Intelligent Entrepreneur 7

table of contents 86 TOURISM WITH A CONSCIENCE Get clued into how Orange County betted on luxury resorts in exotic locations with responsible tourism as the key strategy and how it has got it right so far.

By Shonali Advani

126

89 BIG GUNS

Know exactly when to hire a CFO for your business.

By Christopher Hann

MONEY DEPARTMENT 90 VALUATION CONUNDRUM Here are a few tips to get an investor to put money in your startup.

By Anirudh Prabhakaran

THE ULTIMATE ‘HOW TO’ BUSINESS GUIDE

92 INNOVATION, NOT CAPITAL, SHALL DEFINE A STARTUP’S SUCCESS Know what will provide a competitive edge to your startup in today’s world of low-customer access.

By Gautam Sinha

116 Choose a PR firm 118 Manage labor strikes 120 Set up a social media marketing firm 122 Use brand merchandize 125 Train your customer care staff

TECH DEPARTMENT 94 IRON MAN Dell’s new ATG laptop is something that has great value for companies working in the great Indian outdoors.

By Ankush Chibber 96 A TIMELY DEVICE Research In Motion may have just pulled out a small roadblock on the road to its inevitable decline with the BlackBerry Bold 9900.

By Ankush Chibber 97 DON’T FORGET TO WIPE

Know how to keep your network secure with growing number of mobile devices in the business.

By Dan O’Shea

98 NOKIA E6 As Nokia mashes up and tries to bring the best of both world’s for you, know if this option works for you or not.

By Ankush Chibber 100 PRINTER ON CLOUD Know more about HP T2300, the new sensation in the wide format multifunction printer industry.

By Pranbihanga Borpuzari

126 Set up an online store 102

SPEND IT STARTUPS 102 MAGNETIC MAGIC Chumbak’s designs have brought scenes from real life India across 27 product categories, filling the gap in the Indian souvenir market.

By Shonali Advani 108 ALL CHARGED UP GoGreen BOV is set to start a green revolution with its electric vehicles.

By Shonali Advani 112 WORD POWER

Neha Mohan is betting big on the virtual world with her startup Word Quotient.

By Shonali Advani COVER CONCEPT AND DESIGN

ARKO PROVO MUKHERJEE 8 Intelligent Entrepreneur  November 2011

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130 SWISS BLISS

Prepare for a feast fit for royalty at Durbari, the Indian specialty restaurant at Swissotel Kolkata.

By Sriya Ray Chaudhuri

132 FEAST ON FIESTA Ford’s global new Fiesta premium sedan arrives here as the first of eight global vehicles slated for launch in India by mid-decade.

By Pranbihanga Borpuzari

REGULARS 12 FEEDBACK 13 RESOURCES 14 SME DOCTOR 134 BACKSTAGE

resources [Info that’s handy]

SME FINANCE AND INVESTMENT SUMMIT

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mall and Medium Business Development Chamber of India, a leading organization representing large number of SMEs from India and abroad, in association with India International Trade Centre, will organize sixth National SME Finance and Investment Summit on November 15, 2011, in Mumbai. The SME Chamber provides assistance and support to Indian and overseas SMEs for enhancement of business activities and identifies investment partners, technology upgradation, joint ventures and alliances.

This summit will provide a platform to SMEs to update relevant information about financial market and will bring together senior executives from Government departments, RBI, banks and financial institutions, financial consultants, credit insurance companies, credit rating agencies and subject matter experts to interact with SMEs for creating awareness about the new developments as well as other facilities available to them for their growth.

Through presentations, speeches, panel discussions, questions and answers sessions

and networking, eminent personalities from various fields will discuss various finance-related issues and share their knowledge, expertise and views on the subject matter.

The summit will focus on perspective of banks towards lending to SMEs, banks’ new products and services for SMEs, Government policies and guidelines to streamline finance for SMEs, banking codes and standards, projecting an enterprise before an investor, improving the credit worthiness of SMEs, role of CFO for the growth of SMEs, private equity and venture capital opportunities, SME stock exchange, management of family owned businesses, financial fundamentals for start-up enterprises, investment opportunities in India and abroad, financial aspects to be considered in joint ventures and financial discipline and transparency for good governance.

Date: November 15, 2011 Venue: Mumbai Contact: Madhuri (022-66674444) Website: www.smechamberofindia.com

IIT TECHFEST 2011-2012

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IT Bombay, under the patronage of UNESCO, aims to discover the best ideas and innovations from across the nation that would reform and revolutionize the present day India via its Techfest 2011-2012 from January 6-January 8, 2012. Good ideas are common—what’s uncommon are people who’ll work hard enough to bring them about, says Ideate motto. Believing that all India needs is an idea, a belief and a vision to spark a revolution, Ideate invites everyone to lend a helping hand to the society and improve lives of millions. After all, the secret of getting ahead is getting started.

Four genre are open to participation—Utkarsh, Earth, Elixir and Inspire India. While Utkarsh invites technological solutions to present day rural problems, Earth seeks to innovate

and explore smart methods to deal with energy and environment crises. Elixir on the hand invites solutions and innovations that stand a chance to conquer the major healthcare challenges the world faces today. Meanwhile, Inspire India is your chance to spark a social revolution, think, innovate and redesign. A team may participate in more than one genre of Ideate. However, if the same idea is presented in more than one genre, then the team stands a chance of winning in only one of those, though it may get other benefits based on the discretion of the judging panel.

Date: January 6-January 8, 2012 Venue: Mumbai Contact: Harshad Sukalikar (090768 80907) Website: www.techfest.org/home/event/ideate

TIECON CHENNAI 2011

Receive one-on-one mentoring from successful business owners, find a platform to connect with passionate entrepreneurs and pitch to VCs as TiEcon CHENNAI 2011 presents array of networking and business opportunities.

This all-day event has speakers deliver keynote addresses and participate in panel discussions covering topics aimed at facilitating the creation of tomorrow’s entrepreneur. TiEcon also offers a platform for VCs to interact and understand the visions and directions of the future game changers, thereby providing way for new avenues of investment opportunities.

The first-hand experience of the entrepreneurial world will provide future entrepreneurs a strong understanding of how an entrepreneurial ecosystem works. Want to be entrepreneur? TiEcon is where you should start.

Date: November 24, 2011 Venue: Chennai Convention Centre, Chennai Website: www.tie.org/ major_event/tieconchennai

November 2011  Intelligent Entrepreneur 13 To read more, grab the November issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in

tech legend

STEVE JOBS AN EXTRAORDINARY CAREER

We look back at how the Apple founder built a business that revolutionized the tech industry.

48 Intelligent Entrepreneur ď‚„ November 2011

STEVE JOBS CO-FOUNDER OF APPLE COMPUTER INC. FOUNDED: 1976 “We started out to get a computer in the hands of everyday people, and we succeeded beyond our wildest dreams.”—Steve Jobs Steve Jobs’ vision of a “computer for the rest of us” sparked the PC revolution and made Apple an icon of American business. But somewhere along the way, Jobs’ vision got clouded—some say by his ego—and he was ousted from the company he helped found.

Few will disagree that Jobs did indeed impede Apple’s growth, yet without him, the company lost its sense of direction and pioneering spirit. After nearly 10 years of plummeting sales, Apple turned to its visionary founder for help, and a little older, little wiser Jobs engineered one of the most amazing turnarounds of the 20th century.

The adopted son of a Mountain View, California, machinist, Steve Jobs showed an early interest in electronics and gadgetry. While in high school, he boldly called Hewlett-Packard co-founder and president William Hewlett to ask for parts for a school project.

Impressed by Jobs, Hewlett not only gave him the parts, but also offered him a summer internship at HewlettPackard. It was there that Jobs met and befriended Steve Wozniak, a young engineer five years his senior with a penchant for tinkering.

After graduating from high school, Jobs enrolled in Reed College but dropped out after one semester. He had become fascinated by Eastern spiritualism, and he took a part-time job designing video games for Atari in order to finance a trip to India to study Eastern culture and religion.

When Jobs returned to the U.S., he renewed his friendship with Wozniak, who had been trying to build a small computer. To Wozniak, it was just a hobby, but the visionary Jobs grasped the marketing potential of such a device and convinced Wozniak to go into business with him. In 1975, the 20-year-old Jobs and Wozniak set up shop in Jobs’ parents’ garage, dubbed the venture Apple, and began working on the prototype of the Apple I. To generate the Rs.60,750 in capital they used to start Apple, Steve Jobs sold his Volkswagen microbus, and Steve Wozniak sold his Hewlett-Packard calculator.

Although the Apple I sold mainly to hobbyists, it Photo© Romain Moisescot

generated enough cash to enable Jobs and Wozniak to improve and refine their design. In 1977, they introduced the Apple II— the first personal computer with color graphics and a keyboard. Designed for beginners, the user-friendly Apple II was a tremendous success, ushering in the era of the personal computer. Firstyear sales topped Rs.15 crore. Two years later, sales ballooned to Rs.981 crore.

But by 1980, Apple’s shine was starting to wear off.

Increased competition combined with less than stellar sales of the Apple III and its follow-up, the LISA, caused the company to lose nearly half its market to IBM. Faced with declining sales, Jobs introduced the Apple Macintosh in 1984. The first personal computer to feature a graphical-user interface controlled by a mouse, the Macintosh was a true breakthrough in terms of ease-of-use. But the marketing behind it was flawed. Jobs had envisioned the Mac as a home computer, but at Rs.1,12,275, it was too expensive for the consumer market. When consumer sales failed to reach projections, Jobs tried pitching the Mac as a business computer. But with little memory, no hard drive and no networking capabilities, the Mac had almost none of the features corporate America wanted.

For Jobs, this turn of events spelled serious trouble. He clashed with Apple’s board of directors and, in 1983, was ousted from the board by CEO John Sculley, whom Jobs had handpicked to help him run Apple.

Stripped of all power and control, Jobs eventually sold his shares of Apple stock and resigned in 1985.

Later that year, using a portion of the money from the stock sale, Jobs launched NeXT Computer Co., with the goal of building a breakthrough computer that would revolutionize research and higher education. Introduced in 1988, the NeXT computer boasted a host of innovations, including notably fast processing speeds, exceptional graphics and an optical disk drive. But priced at Rs.4,47,750, the NeXT was too expensive to attract enough sales to keep the company afloat. Undeterred, Jobs switched the company’s focus from hardware to software. He also began paying more attention to his other business, Pixar Animation Studios, which he had purchased from George Lucas in 1986.

After cutting a three-picture deal with Disney, Jobs set out to create the first ever computer-animated feature film. Four years in the making, “Toy Story” was a certified smash hit when it was released in November 1995. Fueled by this success, Jobs took Pixar public in 1996, and by the end of the first day of trading, his 80 percent share of the company was worth Rs.4,500 crore. After nearly 10 years of struggling, Jobs had finally hit it big. But the best was yet to come.

November 2011  Intelligent Entrepreneur 49 To read more, grab the November issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in

tech legend

REMEMBERING

STEVE JOBS ENTREPRENEUR STEVE JOBS, co-founder of Apple Computer Inc., died on October 5. He was 56. Jobs’ vision for a “computer for the rest of us” yielded a host of products and services that have revolutionized the tech industry, among numerous others. During his reign at the top of Apple, the company introduced the iPod portable digital audio player in 2001, an online marketplace called the Apple iTunes Store in 2003, the iPhone handset in 2007 and the iPad tablet computer in 2010.

While Jobs struggled with health issues including

a pancreatic tumor and a liver transplant, Apple’s products continued to resonate with consumers, driving mind-boggling profits for the company.

Apple says it has sold more than 30 crore iPods, over 10 crore iPhones and more than 1.5 crore iPad devices. The company has sold billions of songs from its iTunes Store.

Here’s a collection of reactions of Jobs’ death from fellow entrepreneurs, tech personalities and other notable figures:

BILL GATES, FOUNDER OF APPLE RIVAL MICROSOFT “I’m truly saddened to learn of Steve Jobs’ death. Melinda and I extend our sincere condolences to his family and friends, and to everyone Steve has touched through his work.

Steve and I first met nearly 30 years ago, and have been colleagues, competitors and friends over the course of more than half our lives.

The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come.

For those of us lucky enough to get to work with him, it’s been an insanely great honor. I will miss Steve immensely.”

GUY KAWASAKI, ENTREPRENEUR, VENTURE CAPITALIST AND FORMER APPLE CHIEF EVANGELIST “May Steve rest in peace. My deepest sympathy to his loved ones. No CEO has done more for his customers, employees, and shareholders than Steve. He changed the world—my world, your world, the entire world. His words to live by: ‘There must be a better way.’ You changed our lives, Steve, and you showed us that there is a better way. . .we will miss you.”

54 Intelligent Entrepreneur  November 2011

MARK CUBAN, INTERNET ENTREPRENEUR AND BILLIONAIRE “He was a once-in-a-generation mind. His ability to understand and translate pop culture was second to none. He will be missed.”

GOOGLE CO-FOUNDER SERGEY BRIN “From the earliest days of Google, whenever Larry and I sought inspiration for vision and leadership, we needed to look no farther than Cupertino. Steve, your passion for excellence is felt by anyone who has ever touched an Apple product (including the Macbook I am writing this on right now). And I have witnessed it in person the few times we have met.”

AOL CO-FOUNDER STEVE CASE “I feel honored to have known Steve Jobs. He was the most innovative entrepreneur of our generation. His legacy will live on for the ages.”

APPLE BOARD OF DIRECTORS “Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives.

The world is immeasurably better because of Steve.”

U.S. PRESIDENT BARACK OBAMA “By building one of the planet’s most successful companies from his garage, he exemplified the spirit of American ingenuity. By making computers personal and putting the Internet in our pockets, he made the information revolution not only accessible, but intuitive and fun. And by turning his talents to storytelling, he has brought joy to millions of children and grownups alike. Steve was fond of saying that he lived every day like it was his last. Because he did, he transformed our lives, redefined entire industries, and achieved one of the rarest feats in human history: He changed the way each of us sees the world. The world has lost a visionary. And there may be no greater tribute to Steve’s success than the fact that much of the world learned of his passing on a device he invented.”

The overwhelming outcry of sadness, wrapped in accolades, for Jobs also flooded the Twittersphere.

MICHAEL DELL, FOUNDER OF DELL INC @MichaelDell Today the world lost a visionary leader, the technology industry lost an iconic legend and I lost a friend and fellow founder. The legacy of Steve Jobs will be remembered for generations to come. My thoughts and prayers go out to his family and to the Apple team.

RICHARD BRANSON, VIRGIN FOUNDER @richardbranson RIP Steve Jobs. A truly great businessman. Inspiration to so many. A real family man. He will be sorely missed.

KEVIN ROSE, FOUNDER OF DIGG.COM @kevinrose damn.. damn.. damn.. RIP Steve Jobs BEN KAUFMAN, FOUNDER OF QUIRKY @benkaufman “Those who are crazy enough to think they can change the world, are the ones who do.”. Thanks Steve.

Photo Illustration© Arko Mukherjee

GURBAKSH CHAHAL, SERIAL ENTREPRENEUR @gchahal Thank You, Steve Jobs.

ROBERT SCOBLE, TECH EVANGELIST AND BLOGGER @Scobleizer Rainbow over Silicon Valley. Steve Jobs RIP. @ Sunnyvale SCOTT HEIFERMAN, FOUNDER OF MEETUP.COM @heif Sad sad sad sad sad sad sad ASHTON KUTCHER, ACTOR, INVESTOR AND ENTREPRENEUR @aplusk We have all surfed on the wake of Steve Jobs ship.

Now we must learn to sail, but we will never forget our skipper.

We asked our Facebook fans what they will remember Jobs for most. Here are some highlights among the responses: STAN LEY: For changing all of our lives, for always seeking a great way to connect people together, for being one of the top 10 visionaries of all times.

DAWAYNE MONTGOMERY: Creativity, desire and a brilliant view of the future.

JERRY TUNG PERFECTIONISM: That strong, unwavering vision when it came to products and presentations and his inspiring speech at Stanford.

MARTHA PUFF SHEARD: For being an inspiration to entrepreneurs. Respect due for not being afraid to take risks—what entrepreneurship is all about. RIP, indeed.

K SCOTT BURGESS: His comeback after being fired at Apple; Macintosh commercial, the first time I saw an iPod, his quote “Stay hungry, stay foolish.”

JAMES THOMSON: I’m not a huge Apple guy but Steve Jobs was a giant. His innovation and commitment to excellence has been and will continue to be an inspiration to entrepreneurs for years to come. There aren’t many like him and there will be few to follow.

TINA RUCKER CLEMMONS: So young. But accomplished more in 56 years than I could imagine in my current 42 years. He’s certainly inspirational.

BRYAN BMON ADAMS: Everything. It would take hours to write. The single biggest influence for me. ©Entrepreneur Media, Inc. All rights reserved.

November 2011  of Intelligent Entrepreneur 55 To read more, grab the November issue Entrepreneur To Subscribe, visit www.entrepreneurindia.in

cover story Biotech sector needs venture funding from the beginning The biotech sector in the country is showing a lot of promise now. With well established companies leading the way, Kiran Mazumdar Shaw, Chairman & Managing Director, Biocon Ltd., says the Indian SME sector, despite challenges, is doing a remarkable job.

By Pranbihanga Borpuzari

ENTREPRENEUR (E): What is the role of SMEs in the biotech sector?

KIRAN MAZUMDAR SHAW (KMS): The biotech sector has actually grown and been nurtured in the country because of the MSME sector and the sector owes its status to the SMEs in India because it was the small startups, which were very innovative, that have grown from fledgling companies to more mature companies.

Without the SME sector, there was no way this sector could have flourished.

E: Utilization and acquiring patents are the key areas for this sector. Are Indian entrepreneurs geared up for this?

KMS: This sector thrives on IP. Therefore even small firms are very IP savvy from the beginning. Having said that, I think you need to create an ecosystem that has a strong understanding of IP, innovation and needs to be supported by a very strong infrastructure of IP. Biotech is a sector which thrives on SME which in turn needs to be supported by a strong IP infrastructure.

E: What constraints do small companies face?

KMS: Right now the biggest constrain is venture funding which is not at an optimal level in the biotech space.

I think because there is scarcity of venture funding for the biotech sector in India, you are seeing more low-risk business models of services, contract manufacturing etc which are not the desirable model for bio technology.

E: In the absence of venture capital and PE players, what has been the role of banks towards companies in the biotech space?

KMS: If I was to be honest today biotech companies have to avail debt-based funding as there is no real venture fund available to small biotech companies. Venture funding is only available to mature companies and I 82 Intelligent Entrepreneur ď‚„ November 2011

PhotoŠ Maximage

think that is where the flaw lies in the Indian biotech sector. We need venture funding right from the beginning, we need access to capital markets and create awareness amongst investors towards innovation or else we will be restricted in this sector.

E: The government has the Biotechnology Industry Partnership Program and Small Business Innovation Research Initiative. How successful have these programs been?

KMS: These schemes have played a very key role for the sector. They have managed to fill the very important gap that venture community has not been able to do so. All credit should go to the government for filling this space but we need much more. We need access to capital markets and according to me that is a crying need for this sector.

Unfortunately SEBI guidelines do not allow for SMEs and innovative companies in the biotech area to access the capital markets and we need to look at this space very carefully.

E: Extensive inter-firm cooperation characterizes the biotech space. Have Indian SMEs understood this and followed it?

KMS: There is a very interest-

biotechnology is going to play in the future. Whether its about addressing the food crisis that we are currently challenged with, healthcare, bio fuels or environmental sustainability and the need to develop green technology. Biotechnology is playing a very key role in all such areas.

E: Where does India stand in the field of biotechnology?

KMS: India is amongst the recognized biotechnology nations in the world and we are in the top 10 biotech countries based on our capabilities. In terms of size we are in the top 10 whereas we have the opportunity to be amongst the top five.

E: India is still lagging when it comes to focus on R&D. What is the reason?

KMS: Again I go back to the

“WE ALSO HAVE A VERY DRACONIAN BIODIVERSITY BILL WHICH DOES NOT ENCOURAGE R&D AND INNOVATION.”

ing ecosystem evolving in the biotech industry where there is a lot of partnership, collaboration and interactive forums where the biotech companies come together and collaborate in very interesting ways. For instance, in Bengaluru, we have some very interesting examples of how small companies are helping each other, filling in niches which certain companies do not have. For example, when you are looking for bio-markers you will have informatics companies collaborating with biologybased research companies; then there are genomic companies involved in some gene decoding so on and so forth. There is a very interesting ecosystem of partnership model evolving.

point that there is not enough investment into R&D and innovation because investors are not very comfortable with long term returns. This is why one does not see much innovation and R&D. Having said that, despite this very challenging environment, biotech companies are investing as much as they can on R&D.

E: What more needs to be done on the policy side?

KMS: The department of biotech has been playing a very important role in spelling out very enabling policies like BIPP and various other research funding and partnership avenues. However, I think this is a sector which is challenged with very difficult regulation, For instance there is a very strong and a negative sentiment against clinical trial and agricultural field trials and a sort of resentment and animosity towards genetically modified crops. We also have a very draconian biodiversity bill which does not encourage R&D and innovation. These are the issues which need to be addressed since India has the potential. We have some hard decisions to take in ensuring we revamp these policies especially towards he bill, Schedule Y and genetically modified crops.

E: Biotechnology is not only about producing medicines. It also involves numerous works in fields like agriculture. What is the prospect of Indian SMEs in such areas?

KMS: In the biotech sector globally there is a new

E: What would your advice be to young entrepreneurs and SMEs in this sector?

KMS: My advice is that biotech is a very exciting sec-

thinking that we are actually entering the new economic age which we would like to refer as “bio-economy.” This bio-economy is about the important role that

tor and despite the challenges, if one has the stomach and the staying power, there will be great rewards at the end of that endurance.

November 2011  Intelligent Entrepreneur 83 To read more, grab the November issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in

money department [Where to get it, how to make it, how to keep it coming in]

THE VALUATION

CONUNDRUM A few tips to get an investor to put money in your startup.

By Anirudh Prabhakaran

90 Intelligent Entrepreneur  November 2011

W

hile I personally admire the Groupons, LinkedIns and the tens of other startups that have been valued at astronomical levels, as an angel investor, I have my grouse. Several startups I have come across have valuation expectations that bear no relationship to their business. Some of them have no clear revenue plan, customer acquisition plan, sales and marketing plan, organization structure or the right people to take the organization on a growth trajectory to justify the valuation expectation.

As an entrepreneur, while it is natural to assume that one’s idea is the next big thing and that the current team (including the entrepreneur) is going to rock the world, it is important to have some basics in place while putting down an expected valuation to the investor(s). On several occasions, I may have rejected the proposal purely based on the valuation expectation vis-à-vis the idea, rather than playing the role of a real angel investor, finding out how the entrepreneur could be assisted to grow.

Simply put, some expectations just put off a potential investor. So, how does one arrive at a logical valuation, especially when there are several new emerging areas, with no precedence? Here are a few points to remember:

1. IF YOU CAN USE AN EXCEL SHEET, SO CAN THE INVESTOR. Growth projections to justify the expectations, are, on several occasions, mere excel sheet formulae. One needs to substantiate the growth by documented/researched market estimates (where possible) or share one’s personal experiences logically. Factor in potential competitors, the stage in the product (or service) cycle and market/environment dynamics (including governmental or policy related matters). Explain the scaling up plans (including sales and marketing), brand building, challenges in execution and other costs.

Then justify your valuation. A well balanced approach, talking about challenges and plans to overcome the same, could then lead to a logical valuation, instead of trying to justify only based on potential/perceived demand.

2. ALL FOUNDER(S) CANNOT BE STEVE JOBS (OR NOT NECESSARILY THE RIGHT CEO TO LEAD).

Perhaps, this is the toughest decision for any founder. A technically great idea could make the founder the right CTO or the CMO, arguably. Would the founder be the main bottleneck in future? It is important to answer this question, although it is seldom taken seriously. Proactively identifying the right person/team to lead the organization to the next level could help create a professional approach.

3. YOU CANNOT BE CERTAIN ABOUT ANYTHING, EXCEPT DEATH. Rarely does one come across presentations with transparency/clarity on the perceived risks to the business. Perhaps, the eagerness to obtain valuation makes the entrepreneurs project no risks. No investor would take a call without due diligence. Hence, projecting the risks with complete clarity, along with mitigation plans, would help build transparency—a much sought after quality—and make the valuation expectation more credible.

4. ASKING FOR INVESTMENT IS NOT AKIN TO HAGGLING. In general, an assumption could be made that if one asks for a very high valuation, the investor would haggle and, hence, it is easy to

settle at a mid-point. Nothing can be further from reality. Hence, it is important to do one’s homework. The past investment pattern of the investor/investor group, could be explored through various formal/informal means. This could help structure the valuation expectation appropriately.

5. HAVE YOUR ANTENNA UP. The investors are not trained actors. It is not possible for them to be stoic and hide their emotions/thoughts. Even if the investors are not openly questioning your expected valuation, they may drop several hints that they do not concur with your expectations. It could be in the form of continuing to question the strategy or competition or team etc. It is normally

"INVESTORS MAY DROP SEVERAL HINTS THAT THEY DO NOT CONCUR WITH YOUR EXPECTATIONS." not difficult to grasp onto non-verbal signals.

This is not to say that an entrepreneur needs to temper down the expectations at all times. Investors are normally fair, or else, they would not be approached by any entrepreneur (word spreads quickly in these days of social media). Investors are in the game to share the entrepreneur’s story and assist them.

However, they may not be fully aware of the dynamics of the industry that an entrepreneur has to offer. Hence, despite all the data that an entrepreneur has to offer, it is normally a leap of faith for the investor.

Thus, with a systematic and logical approach, the leap could actually be made into a hop or perhaps only a step.

Finally, it is a business decision for the entrepreneur to stick to the expectation and seek the next investor(s) or continue discussions with the same investor (s) at reduced valuations.

This is one of those “leap of faith” decisions by the entrepreneur!

ANIRUDH PRABHAKARAN is an angel investor who also runs an educational services venture.

November 2011  Intelligent Entrepreneur 91 To read more, grab the November issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in

tech department [Cool ways tech can help you grow]

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Research In Motion may have just pulled out a small roadblock on the road to its inevitable decline with the BlackBerry Bold 9900.

By Ankush Chibber

BLACKBERRY BOLD 9900 PRICE Rs.33,000

DIMENSIONS 115x66x10.5 mm WEIGHT 130 g SCREEN SIZE 2.8 Inches, capacitive, multi-touch display CAMERA 5MP, LED flash MESSAGING Email, MMS, SMS, Voice, IM

IT’S WELL KNOWN IN industry circles that Research In Motion (RIM), the Canadian handset maker is the now the new Nokia. Its handset sales have been falling, and revenues dropping. In India, it has been the Android phones that have been eating into its market, whereas abroad it has also been hit by the iPhone.

That eventually RIM will have to pull off either a product miracle or make a big strategic move to survive is now well established. But if it does keep churning out phones like the Bold 9900, maybe it can buy some time and not make a decision in utter haste like Nokia did (if you saw Meego).

The 9900 has been selling a whole lot in the first few weeks of its launch in India. On first sight, it does look very polished (especially with the silverish band all around the body) and the body does seem more ergonomic and thumb-friendly than its recent predecessors.

Overall, it is very classy and flaunt-able as far as BlackBerry phones go. RIM had recently bombarded us with candy colored floss such as the purple and pink Curves and we are thankful for a bit of macho style returning to its stables. Targeting teenagers is good but RIM should really have been focusing on the loyal clientele in offices across India, we think.

Then there are the specs, which are the most top-end available on the company’s range for now. The Bold 9900 runs a speedy 1.2 GHz processor, has a very vibrant 640 x 480 pixels

96 Intelligent Entrepreneur  November 2011

touch screen, and of course the brand new OS7.

Using the phone you realize that it does well on what RIM promises i.e. the messenger service and push email and that is enough for most folks in India. A good addition is the new HD video-shooting mode. We like that as should most BlackBerry users But sadly, RIM has not improved a few glaring chinks with the 9900 that they really, really should have, most notably the battery life which does not last the full working day.

Gone are the days when BlackBerry phones had Nokia 3300-esque battery lives. In our review, we would charge the phone at about 9 am and lose that charge at about the same time at night. And we are not big data users.

Also, the browser still sits at the bottom of all web browsers available in the market right now. It seems just lazy on the part of RIM engineers and UX designers to overlook that again.

Also, the OS while new, does not still solve the interface problems we have pointed out in our past reviews. Getting to an app is still a chore, especially with the lack of universal search. Then the camera at 5 MP is just not becoming of what is a very expensive smartphone, especially in the Indian scenario.

So where does the 9900 fit in? We would recommend the 9900 as probably the best replacement for existing BlackBerry users looking to upgrade but wanting to stick to the platform. It really is the best BlackBerry has to offer right now, we think.

For everyone else, we would say to only change track if they have 30K odd lying around and are fed up by either the lumbering Symbian (Nokias), glitchy Androids or the wholly expensive iPhones.

tech department [Cool ways tech can help you grow]

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Q: How do I manage the growing number of mobile devices in my business and keep my network secure?

By Dan O’Shea

IN THE EARLY AUGHTS, firms handed out BlackBerrys like they were ball pens. If you were a worker going mobile, you were going to do it only on your employer’s terms, with a device owned by the firm and access to corporate data dictated by the house IT manager. That made keeping tabs on business mobile devices easy.

Business mobile usage has been visited by a consumerization trend, with employees using all manner of personal mobile devices while within the business and to access corporate data when they’re out and about, says Jeff Wilson, principal analyst for security, Infonetics Research.

“You may see firms enabling employees on iPhones for corporate access, but for a lot of people it may not be too difficult to then figure out how to configure their personal iPad for access, too,” Wilson says. Employees might have a business phone, a personal phone and a personal tablet all carrying business data makes them harder to manage and act on looming security threats. In this complex environment, a third-party mobile device management solution may be the answer.

That might include the ability to run automatic firmware updates, diagnostics, data backup and restoration, to scan for security threats and the particularly valuable ability to remotely lock and wipe data from a phone if it is lost or stolen.

Often these solutions are offered by enterprise security companies, sometimes in partnership with a mobile carrier. Costs vary and are usually based on the number of devices within a business enterprise. That number is not always easy to determine, Wilson says, noting, “A lot of SMBs have an inventory challenge. The first thing is figure out how many devices are accessing their corporate info—which phones and tablets, and the operating systems they use. Then you can

develop policies to deal with them.” One way to do that is to deploy a network access controller.

“It’s a box that intercepts traffic information and tells you who’s connecting, what device types, what their authentication credentials are and if they have virus software,” Wilson says.

Mobile viruses are becoming more common, and the booming market for application downloads presents other dangers. Having a device lost or stolen just once may provide enough reason to invest in remote management, especially if that device contains sensitive corporate data. “For a small business,” Wilson says, “Ask yourself, ‘What do I have on these devices and what is it worth? Is changing credentials enough, or do I have to wipe it?’” ©Entrepreneur August 2011 by Entrepreneur Media, Inc. All rights reserved.

DAN O’SHEA is a Chicago-based writer who has been covering telecom, mobile and other high-tech topics for nearly 20 years.

To read more, grab the November issue Entrepreneur November 2011of  Intelligent Entrepreneur 97 To Subscribe, visit www.entrepreneurindia.in

back stage To B-school or Not to B-school?

Going to business school certainly doesn’t guarantee entrepreneurial success— but is it valuable? Entrepreneur went to experts from both sides of the lectern for firsthand accounts of the pros and cons of MBA programs.

ON CORE CURRICULUM THE PROFESSORIAL VIEW comes from Timothy Faley, Ph.D., managing director of the University of Michigan’s Zell Lurie Institute for Entrepreneurial Studies (part of the university’s Ross School of Business) and an adjunct professor of entrepreneurship.

THE STUDENT VIEW comes from a 2010 graduate of USC’s Marshall School of Business who works in the venture capital sector (and asked not to be identified by name).

Professor: There are six distinct bundles of skills that make up entrepreneurship—identifying opportunities, framing them into a business construct, assessing feasibility, operationalizing, resourcing and managing growth.

It’s not that the core courses are bad. It’s not like finance is not important. But you need to know how to do finance when you don’t have a 10-year history—how to do it from a blank page. It’s not like marketing is not important. But you also need to know how to do marketing when you have no budget.

Student: They bombard you with core classes during the first term—accounting, statistics, economics, strategy, leadership, management, finance—it’s all over the place, so it’s basically cramming. I don’t know if that kind of model is the most effective.

ON TEACHING MANAGEMENT SKILLS Professor: You can talk about the frameworks of management, about group dynamics and about different personality types and what they bring to the table. But the reason top schools always require three to five years of experience before coming back to get your MBA is that the experience of having observed it and lived it makes a huge contribution to the whole learning process.

Student: Management lectures were all about trying to create some sort of framework, i.e., three skills of a general manager: setting the agenda, enabling others, networking. But then they would say, “You can’t teach leadership and management—it must be learned.”

ON ANALYSIS VS. HANDS-ON TRAINING Professor: We teach frameworks and understanding, but you have to live it. In the last quarter of the first year, every student spends six weeks on a real corporate project with a team of their classmates. It could be entrepreneurial, it could be a startup company out of an international incubator or it could be at IBM. But they’re working on something real and they’re working in teams. They have to figure out how to pull this all together in six weeks.

Student: Read a Harvard Business School case, study, analyze, then overanalyze some more—this is what MBAers call “analysis paralysis.” This is a significant issue with many MBA programs—they teach theory, but could use some help with practical scenarios. Even when classes require developing actual business plans, one term or one semester is not enough time to learn all the details of running a business.

ON ETHICS Professor: When you’re an entrepreneur, at least at the beginning, all you have is your skill set and your integrity.

We talk to students a lot about ethics and make sure they understand how that impacts their career. When you’re a lone entrepreneur, that’s the pillar you lean on. It’s not necessarily a stand-alone course for us—it comes up all the time.

Student: Ethics should not be taken lightly, especially in light of the Bernie Madoff scandals of the world. However, most of this stuff is common sense. A bad person will commit crimes—whether or not they have an MBA degree.

ON WHETHER AN MBA GUARANTEES A JOB Professor: Long-term students will be sorely disappointed if they take that attitude. It doesn’t matter if it’s business school or relationships outside of school—if you say, “I just want to leverage it to get a job,” then five years from now you’re going to be pretty sad. You may be working in a job and may be making a lot of money, but you’re not going to be happy.

Student: People stop caring after a while and just go through the motions, then end up focusing on getting a job and reliving their undergrad years. I would still pursue my MBA knowing what I know now. The people that I met and the networks that I have established because of my MBA made it worth it. (As told to Carolyn Horwitz) ©Entrepreneur October 2011 by Entrepreneur Media, Inc. All rights reserved.

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