april 2013
Fighting the Patent Trolls The Magazine for Growing Companies
Page 28
How to smartly pivot your business model
Page 39
How I Did It
cracking the she code
Shantanu Prakash
Educomp Solutions
Page 34
The magazine for growing companies
April 2013 | `150 | Volume 04 | Issue 03 A 9.9 Media Publication | inc.com Facebook.com/Inc
@inc
Anu Acharya Founder of genomics company Ocimum Biosolutions, on networking, ambition and getting a “life-life� balance. Page 22
April 2013
contents
34 How I Did It
Learning without chalk and board 22 A Genealogy of Success
What it takes to succeed as a woman entrepreneur in a notso-woman-friendly atmosphere of entrepreneurship. Anu Acharya, founder of the `100 crore Ocimum Biosolutions, gives five tips to help break the mould.
28 The Troll Toll
Patent trolls bled $29 billion from businesses in 2011. Their primary target? Small and midsize companies. What you need to know if they come after you.
How Shantanu Prakash has helped teachers in over 32,000 schools become “superteachers” with digital and e-learning solutions. These smart lessons have taken Educomp Solutions to become a `1,522-crore company. as told to ira swasti
by kris frieswick
by shreyasi singh
44 The Way I Work
Photograph courtesy subject
Within a year of its launch, Manu Jain has made Jabong. com the country’s most visited retail website. His productivity secret? If you’re writing long memos and conducting unending meetings, you don’t know what you’re talking about. as told to ira swasti
This edition of Inc. magazine is published under license from Mansueto Ventures LLC, New York, New York. Editorial items appearing on pages 4, 11, 17-20, 28-33, 39-41 were all originally published in the United States edition of Inc. magazine and are the copyright property of Mansueto Ventures, LLC, which reserves all rights. Copyright © 2009 and 2010 Mansueto Ventures, LLC. The following are trademarks of Mansueto Ventures, LLC: Inc., Inc. 500.
on the cover
Anu Acharya, founder, Ocimum Biosolutions. Photographed by A. Prabhakar Rao in Hyderabad. Cover design by Anil VK. Imaging by Peterson PJ.
april 2013 | INC. | 1
contents
April 2013 39
17 06 09
05 Editor’s Letter
06 Behind the Scenes
All the world’s a stage, and all men and women merely players, wrote Shakespeare. A look at the companies that designeth a recent production of his play.
09 Launch
Report: Salaries continue to rise, but are strongly linked with performance Do you rely too much on gut to take decisions? Think again, says a new book Skimmer’s Guide to Top Dog: The Science of Winning and Losing, by Po Bronson and Ashley Merryman
12 Innovation
A backpack that doubles up as a mobile charger
14 All Things People
By Hari TN When you’re defining your company’s culture, it is not just important to describe “what it is” but “what it is not” too.
17 The Goods
Tools to keep your web accounts safe Headsets for business on the move Revamped hotel workspaces Tech Trends: Testing time management apps, by John Brandon
Hands on 39 strategy Don’t wait for things to go wrong before changing your strategy. Pivot in time from one business model to the next. 40 marketing Why it’s time to bring back old brands, according to Harvard Business School professor Rohit Deshpande
48 I Wish I Knew Then...
What’s in a name? A lot, if you ask Ashwin Ajila, founder of iNurture Education Solutions, who learnt the art of nomenclature the hard way—while naming the new courses his 130-people enterprise has introduced over the years.
Corrigendum In the story on Krya Consumer Products (Strategy, March 2013 issue), the line: “In fact, just within a year, the average sales of their eco-friendly detergent had reached one lakh units a month” carries an error. The company’s actual sales averaged `1 lakh a month. The error is deeply regretted.
2 | INC. | april 2013
inc.com
Contents
Top Videos on Inc.com
INC.COM/PERSONAL-PRODUCTIVITY
Three Ways to Be a Stress-Free Workaholic
Inc.com columnist Steve Tobak says a few simple rules can help you do more while making it feel as if you are doing less.
2 Work your tail off when you have to, not when you don’t.
Business happens in spurts. Whether you’re developing a product or building a business, those long hours don’t go on forever. It’s OK to kill yourself for a few weeks or months, as long as you chill out for a while when it’s over. If you overwork yourself constantly, you’re asking for trouble.
Inc.com/founders-forum
Alexis Maybank Co-founder of Gilt Groupe, on creating a unique user experience
“We offer sales that on a daily basis bring in half a million people the same second our doors open. That couldn’t happen except in the virtual world.”
1 Learn to give up—sort of.
When you’re overstressed and overworked, and the ideas just won’t come, give up. Seriously: Just call it quits, go home, go for a run, whatever. Once you relax, that’s when inspiration flows.
3 Don’t take it out on others.
Maybe you can function at a high level, but if you’re simultaneously demotivating your team, then what’s the point? And if you take it out on family and friends, you’re just going to end up lonely and depressed.
INC.COM/inclive
Vanessa Nornberg Founder of Metal Mafia, on her unusual approach to interviews
“The most telling thing about someone coming in for an interview is how they walk. Do they move with purpose, or are they meandering? If they meander, they can’t work for my company. Period.”
Head to Inc.com for expanded coverage on this month’s cover story (page 46) on how the world’s most respected entrepreneurs got their starts. Check out our video interview with Sir Richard Branson, in which he talks about inspiration, starting up, and a forgiving dad. And watch more video interviews with Danny Meyer, Alexis Ohanian, and Barbara Corcoran. Visit www.inc.com/how-I-got-started. 4 | INC. | APRIL 2013
bonsai: photos.com
How I Got Started
editor’s letter
MANAGING DIRECTOR: Dr Pramath Raj Sinha Printer & Publisher: Anuradha Das Mathur Editorial managing Editor: shreyasi singh assistant editor: Sonal Khetarpal feature writer: ira swasti DEsign Sr. Creative Director: Jayan K Narayanan Sr. Art Director: Anil VK Associate Art Directors: Atul Deshmukh & Anil T Sr. Visualisers: Manav Sachdev & Shokeen Saifi Visualiser: NV Baiju Sr. Designers: Raj Kishore Verma Shigil Narayanan & Haridas Balan Designers: Charu Dwivedi, Peterson PJ Midhun Mohan & PRADEEP g nair MARCOM Designer: Rahul Babu STUDIO Chief Photographer: Subhojit Paul Sr. Photographer: Jiten Gandhi community team assistant product manager: Rajat gupta Sales & Marketing senior vice president: krishna kumar (+91 98102 06034) business development Manager: arjun sawhney (+91 95822 20507) assistant regional manager (south & WEST): rajesh kandari (+91 98111 40424) Production & Logistics Sr General manager (Operations): Shivshankar M Hiremath Manager Operations: Rakesh upadhyay Asst Manager (Logistics): Vijay Menon Executive Logistics: Nilesh Shiravadekar Production Executive: Vilas Mhatre
Logistics MP Singh, Mohd. Ansari OFFICE ADDRESS nine dot nine mediaworx Pvt Ltd A-262, Defence Colony, New Delhi–110 024 For any queries, please contact us at help@9dot9.in Published, Printed and Owned by Nine Dot Nine Mediaworx Private Limited. Published and printed on their behalf by Anuradha Das Mathur. Published at A-262, Defence Colony, New Delhi–110 024 printed at Tara Art Printers Pvt ltd. A-46-47, Sector-5, NOIDA (U.P.) 201301 Editor: Anuradha Das Mathur
A Worthy Example At Inc. India, we don’t have a stories quota. The entrepreneurs you meet here aren’t filtered according to industry, demographic or region—only bright ideas and commendable achievements make the cut. Yet, I have to confess, every few months, I do flip through our past issues to track how many women entrepreneurs we have featured. And, to be honest, we don’t usually do as well on this metric as we’d like to. It’s why we are so excited to have met Anu Acharya, founder & CEO of Ocimum Biosolutions, a global genomics solutions provider. Not only is her company impressive, her journey also highlights several timely issues. Across the world, there is a growing debate on the role of women at the workplace, and the invisible hurdles they face. As I write this, Lean In, a book written by Sheryl Sandberg, COO of Facebook, is generating much discussion about its take on women and work. Sandberg essentially exhorts women to be more ambitious and more “there”. It’s a sentiment Acharya is likely to agree with. In the 12 years since she co-founded Ocimum Biosolutions, Acharya has built a 120-people award-winning genomics company that at its peak touched `100 crore in turnover. Acharya has also founded two other gene science companies, and is an active entrepreneurship advocate. In fact, she was named a Young Global Leader by the World Economic Forum in 2011 for her innovative work. What’s more—she’s a mother of two. It isn’t surprising that she “sleeps four hours on average”, and answers e-mails with lightning speed even at 1am. In A Genealogy of Success on Page 22, she takes us through her winning strain—a potent mix of ambition, determination and relationship building. Don’t miss it.
Shreyasi Singh shreyasi.singh@9dot9.in
april 2013 | INC. | 5
BEHIND THE SCENES
Companies at the Heart of Everyday Life
Production Wide Aisle Productions, started by Anirudh Nair in September 2005 produced and directed this story of loss and redemption at Zorba the Buddha, a restaurant-cum-performance venue in Delhi. Having worked with the British Council, The Scindia School and School of Inspired Leadership, Nair now has a new mission—to make William Shakespeare accessible to school kids through their “Meet Will” project. Their four-member team is also leveraging theatre workshops to enable corporates to explore leadership, communication and ethics in business in a more imaginative way.
The vibrant costumes that had to be faithful to The Golden Age of England and yet be acceptable by Indian viewers were designed by Mayank Mansingh Kaul. Beginning the label under his own name in 2008, the Delhi-based designer has a line of fashion garments and home textiles that use traditional Indian fabrics, including organic cotton for home and hospitality spaces. His 12-people team has been responsible for adorning the interior spaces of upmarket, boutique hotels such as the Devi Ratna and Devi Rasa hotel in Jaipur, Rajasthan.
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Gutter Credit here
Costume design
The Winter’s Tale
08.03.2013 7:30 P.M.
Set design The Shakespearean world of King Leontes of Sicilia was recreated by Anagram Architects that provided sets and props for the play. Started by Vaibhav Dimri and Madhav Raman in 2004, this design consultancy firm has developed a range of expertise, in areas such as public infrastructure planning, urban design, architecture, furniture and interior design. Their 14-people team has designed the South Asian Human Rights Documentation Centre, NDTV News Room and the Vaansa Eco Resort among others.
Promotions All the photographs, posters, social media posts and promotional videos for The Winter’s Tale performance was done by Tadpole Artists. In 2011, Neel Chaudhuri and Kartikey Shiva started this arts and communications company to work across different platforms of photography, theatre, film and music. Over the past two years, they have provided innovative promotional material in a medley of media— video, print and posters. Some of the key events they have worked with so far are theatrical performances such as Taramandal and Still and Still Moving. They’ve also made corporate films for Kee Pharma and music videos for the Sunburn Festival.
PHOTOGRAPH BY Subhojit Paul
reported by sonal khetarpal
News. Ideas. People.
launch
Salaries: Still Headed North? A recent report finds so, but suggests a strong link to performance In its annual General Industry Compensation Report, Hay Group, the global management consultancy has forecast an expected pay increase of an average of 11.2 per cent across job roles in 2013. The amount represents a slight reduction against the actual average salary increase of 12 per cent across India Inc. in 2012. Hay Group’s report breaks down job roles into four levels—clerical and operations, supervisory and junior professionals, middle management and seasoned professionals, and senior management and executives. Clerical and operations professionals are expected to beat the average of 11.2 per cent across job levels, standing at 11.5 per cent, while middle management professionals can expect an increase of about 10.9 per cent. illustration by manav sachdev
The report finds median starting salaries for fresh graduates to be in the range of `18,500 to `25,000, with engineering roles featuring at the top of the scale. Finance or accounting and IT or telecommunications are amongst the other roles that are popular with the industry at present, while roles such as administration and support and health and environment weigh in lower down the order. Designed to provide comprehensive analyses of remuneration practices in Indian organisations, the report includes insights on 4,18,414 jobs from 410 organisations, across the sectors of industrial goods, chemicals, transportation, FMCGs, construction, high technology, oil and gas, retail, services, health and life sciences, natural resources, leisure and hospitality, consumer durables, educa-
tion, and utilities. It is designed to provide comprehensive analyses of remuneration practices in Indian organisations. Interestingly, the study points to an overarching focus on performance with the payouts widely influenced by both individual and company performance. It finds that 84 per cent of the organisations have a shortterm variable payments policy in place and a very significant 96 per cent of organisations have made payments related to variable pay in the last 12 months. Interestingly, the proportion of variable pay (as a percentage of total CTC) shows an increase across management levels, weighing in at 6 per cent at the junior level, 10 per cent for the middle manager, and 14 per cent for senior management (see Figure 2 for more details). april 2013 | INC. | 9
launch
Average median monthly salary (in INR)
Fig.1
A skimmer’s guide to the latest business books
salaries for degree graduates
30,000 25,000
25,000 20,923
20,000
20,000
18,500
18,500 The book: Top Dog: The Science of Winning and Losing, by Po Bronson and Ashley Merryman.
15,000 10,000 5,000 0
Engineering
Human Resources
Sales
Customer Service
Job Families
Administration/Support/ Service
Pay Mix By Employee Groups The impact study The study also drew correlations between employee attrition and compensation packages. It pegged the overall average rate of employee turnover in the last 12 months at 13.6 per cent, implying a conservative trend in both hiring and exits. The attrition rate was fuelled mainly by the high turnover amongst employees in supervisory and junior professional, and clerical and operation roles (13.8 and 13.9 per cent respectively). “External disparity of compensation” was the number one reason for the voluntary exits, followed by “role stagnation” and “job relocation” as the other major areas of concern. Fig.2 The remuneration mix
100 90
5
6
10
11
10
10
80
Percentage (%)
40
37
37
14 10
32
50
Basic Salary Total Allowance
40
Total Benefits
30 20
44
47
43
44
10 0
Clerical Operations
Supervisory/ Junior Professional
Middle Management/Seasoned Professional
Management Level
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Senior Management/Executive
The backstory: Science journalists Bronson and Merryman previously teamed up on the best-selling NurtureShock, a book about child development research. If you read nothing else: Are you wired to win or to not lose? The difference, explained in Chapter Seven, affects not only how you respond to setbacks but also how innovative you are. Chapter Eight reveals the dangers of ignoring things that almost went wrong but didn’t. Ladies’ choice: The authors elegantly dismantle the women-are-less-competitive stereotype. Women fight just as hard as men—they just require better odds of winning before they will get in the game.
70 60
The big idea: Nature and nurture combine to make us the competitive (or not-so-competitive) animals we are. By understanding what influences our perceptions of risk and ability to perform under pressure, we can make better decisions.
Short Term Variable Payments
Finger check: Is your ring finger 10 percent to 20 percent longer than your index finger? If so, you probably possess such traits as assertiveness and risk tolerance that help entrepreneurs succeed. (It involves hormones and fetal development.) Rigor rating: 9 (1=Who Moved My Cheese?; 10=Good to Great). The authors provide an exhaustive culling of medical literature as well as reader-friendly anecdotes drawn from business, sports, the arts, and the military. —Leigh Buchanan
launch
What If Your Gut Is (Gasp) Wrong? Chip and Dan Heath on making better decisions q&a
An organisation, like a life, is the sum of many choices. So a leader’s most important job is to make good decisions, which—minus perfect knowledge of the future— is tough to do consistently. But there are ways to improve your judgment calls, say Made to Stick co-authors Chip and Dan Heath. In their latest book, Decisive: How to Make Better Choices in Life and Work, the Heath brothers explain how to navigate the land mines laid by our irrational brains and improve our chances of good outcomes. The trick, as Dan Heath explains to Inc. editorat-large Leigh Buchanan, lies in expansive thinking.
courtesy subject
Should you ever accept a decision at face value? Or should you always poke at it, look at it from different angles? Among the most pervasive biases in decision making is narrow framing. That’s our tendency to unduly narrow the number of options we consider and how we think about choices. Roughly two-thirds of executives only consider one option when making decisions. That’s disastrous, because adding options increases the chance of a good outcome. Why? Because there’s more likely a good option in the mix? There are a couple of reasons. By considering multiple options, we learn the shape of what’s possible. If you’re deciding whether to buy a particular laptop, it’s easy to rig that decision to what your gut tells you. But if you compare three different models and an iPad and a netbook, you contrast across multiple dimensions in a way that makes you
The Right Calls The key to making good decisions quickly? Pretend you are someone else, says Dan Heath (right, with his brother Chip).
“ Roughly two-thirds of executives only consider one option when making decisions. That’s disastrous.” smarter about the problem as a whole. Adding options also makes us more honest about how we assess them. Say there’s one house you want to buy. One job candidate you want to hire. As you evaluate that option, you rationalise away the negatives because you want it to work out. If you consider two homes or two candidates, you’re much more likely to be honest with yourself about their strengths and flaws. What are best practices for quick decisions? One strategy involves a pair of questions. For personal decisions, the question is, “What would I tell my best friend to do?” The work equivalent is, “If I were replaced tomorrow and a wise successor took my place,
what would he or she do?” Something profound happens when we see our dilemma from the outside like that. With so much information available, how come we’re not making better decisions? There’s so much information that it’s easy to build a case for what we wanted to do all along. You have to wire opposition into your decision-making process. In a high-stakes situation like an acquisition, you should have a team preparing the case to do it and a team preparing the case not to do it. How do you institutionalise good decision making in your organisation? You need a process whereby everyone can handle a decision the same way. There should be
attention paid to disconfirming information. Attention to alternate ways to frame the problem. Attention to what will happen if things go unexpectedly well or poorly. The process doesn’t guarantee a good outcome. But it sets guardrails to keep you from falling into the common decision-making traps. What traps are entrepreneurs especially vulnerable to? Entrepreneurs tend to be very optimistic, which makes them overconfident about how the future will unfold. The psychologist Gary Klein created a process called the premortem, where you say, “OK, team. We just made a decision. Let’s imagine that it’s a year from now, and it was a disaster. What went wrong?” Everyone assembles lists of fiasco scenarios and compares notes. Then you say, “Given what we’ve foreseen, how can we forestall as many of those outcomes as possible?” A premortem makes you humble enough to think, If I’m wrong, what then? april 2013 | INC. | 11
innovation
Companies on the Cutting Edge
Sunny side up
A good battery life is one of those features that the otherwise fully-loaded, omnipresent smartphones of today cannot boast of. But, Lumos Design Technology, a Bangalore-based product start-up has a solution that even handset manufactures don’t—a backpack that can charge your phone while on the go. Gandharv Bakshi, the company’s co-founder, and an electronics engineer from IIT Madras, and his wife Lavina Mahbubani, a fashion designer from NIFT, have developed the Unplug Solar Backpack. Lumos’ backpack has a solar panel placed on the outer front of the bag and an in-built battery that uses solar energy to charge phones. The technology is such that the internal battery gets charged at all times. In direct sunlight, the solar panel generates enough electricity per hour to provide four hours of usage time to a 4-inch smartphone. Indoors or in a car or an office with a decent window, it could charge upto two to three hours of usage time. Priced at `5,500, the third version of the backpack will be available for sale soon.
“Lumos is derived from the Harry Potter charm that when used, lights up a dark room.” —Gandharv Bakshi, co-founder, Lumos Design Technology
12 | INC. | april 2013
Unplug Solar Backpack
Lumos Design Technology
Dimensions Fits Devices: 16.4 x 1.8 x 11.8 in Material: Nylon Weight: 1.4 kg Battery: 1800 mAh Colour: Black Features Designed to load easily into overhead bins and small spaces with top and bottom grab handles Thick foam padding covers pressure points in the shoulder blades and lumbar area Integrated pockets for both a 17.3 inch laptop and an iPad or tablet (encased or not) Slots for business cards, pens, an iPod, a smartphone and USBs
Photograph by Srivatsa
imaging by anil t
reported by Ira Swasti
All Things People BY
HARI TN
Hari TN is the global head of human resources at Amba Research, a Bangalore-based investment research outsourcing firm.
One of the most hotly debated but least understood topic in organisations is “culture”. Because of the complexity of the topic, and also because no one has yet been able to come up with a metric to measure culture, discussions on culture usually go nowhere. Also, managers are not trained to deal with or even understand concepts that can’t be measured. Despite these challenges, it is important for senior leaders, especially in founder-led firms to understand all dimensions of culture. And, to get a practical understanding, it’s important to begin by describing “what it is” and “what it is not” even if the “what it is” sounds a little vague and subjective to begin with. So, let’s begin by asking a question. “How easy is it for you personally to become who you are not?” Obviously, the answer is simple—it’s extremely difficult. At best, each of us can tweak our personality a little, or polish away some sharp edges. But, it’s not possible to change your personality altogether. Similarly, organisations can’t change the basics of “who” they are, and hence, statements such as “we need to change our culture” are often rooted in ignorance. So, if organisations can’t change who they are, what’s the point of understanding culture? But, that is the same thing as asking—if individuals can’t fundamentally change who they are, what’s the point of understanding ourselves better? We know self awareness is
14 | INC. | april 2013
vital. It helps an individual better understand herself in relation to the world around her, and hence, deal with situations more effectively. That same understanding is essential for companies as well. To begin with, “culture” is what successful teams or groups attribute their success to. This applies to small teams, large teams and even nation states. For example,
photos.com
What’s your truth? Learn to filter the myths from the realities when it comes to company culture
all things people
take two founder-led companies which we’ll refer to as Firm A and Firm B. Let’s assume that Firm A has a culture that believes in extensive discussion and debate before taking decisions and Firm B believes in keeping discussions very brief—more to keep the team informed rather than for extensive inputs or buy-in. Let’s assume that both firms meet with great success. It is very likely that the prevalent culture of decision making in Firm A would be one of extensive discussion, debate and buy-in, whereas in Firm B it would be one of clear thinking leaders who do not waste much time in discussion and rapidly move to execution once they have made up their mind on what to do. This difference in cultures may not be apparent to a visitor. Even employees of these firms may not be conscious of this, especially if they have not been exposed to a starkly different decision-making style in a different firm. Therefore, employees may often have a tacit understanding or feel of the culture of their firm, but may not be able to articulate it at all. The interesting aspect about this is that both the Firms, A & B, may espouse exactly the same values— statements such as build an engaged workforce and passion for the customer— and still be very different. Edgar Schein, the demigod of culture, beautifully explains that artifacts (policies, office décor and layout, etc.) and espoused values are very poor measures of culture. The only reliable indicators of culture, which may not be apparent excepting to someone who is looking for it, are the tacit beliefs and understanding about the way things work. Very few firms consciously try and identify these tacit beliefs. There are consulting companies that can run a proprietary survey and arrive at where your firm stands on some culture parameters. However, these outcomes can be debated and often have limited practical application. Based on my experience of entrepreneurdriven companies, I have observed that culture variations can be broadly clubbed under two categories, namely a) the process and the basis of decision making, and b) the way performance is measured and underperformers are dealt with.
The table below captures the culture variants on two broad parameters:
Process and basis of decision making
Measurement of performance and dealing with under-performers
Culture 1
Culture 2
A small group, with no formal membership, debates and decides. When the formal group (like an executive team) meets, the decision has already been made. After a brief discussion giving the semblance of involvement, the decision is communicated
Inclusive process with extensive debate and buy-in. Decision making can be slow.
Informed judgment (facts and data wherever available). But in all cases speed is of essence.
A detailed and thorough analysis
Hard data and numbers are primarily used to evaluate performance
Soft assessment with a lot of weightage for effort
Quick consequences and low tolerance of under-performers
Slow and accommodating
It is not right to conclude that one culture is superior to the other or one works better most of the time. One of the cultures may work very well under one set of circumstances, but when the circumstances change, the same culture may result in a rapid downfall. There are several such examples in the corporate world. Digital Equipment Corporation is a classic example where a culture of empowerment and freedom had resulted in success in the early days of Silicon Valley, but in a more commoditised world of the IBM PC that called for greater discipline and optimisation, the same culture led to its rapid descent into oblivion. Could Digital have adapted and created a new culture? Theoretically yes, but practically, no. Change in culture means a complete change in leadership and the way of thinking which often happens when such a firm is acquired. It is very unlikely that it can stay independent and effect a huge culture change. The lesson in this is that you should know what your organisation culture is. And do not believe that you can change it dramatically. If a company operates in multiple countries, it is very likely that underneath the common firm-wide culture, there would be multiple sub-cultures. One could get unduly worried about understanding and managing these sub-cultures. However, I believe there are elements of managing global sub-cultures that have little to do with culture or cultural nuances.
First, bad management practices invariably get exacerbated in global contexts— frankly what is often attributed to culture incompatibility or culture differences can be laid fair and square at the doors of poor management. It is very convenient to lay the blame on culture. In other words, managers who are perceived as unclear in their communication or thinking, or seen as being rude and unaccommodating in their styles in local contexts will be perceived much more so in global contexts. Similarly, active listening is important in any context and so is not jumping to conclusions, but in a global context poor demonstration of either could be fatal. Therefore, take lessons from Management 101 very seriously in a global context. You might also sometimes find it difficult to evaluate whether a person is a good performer or not because you are coloured by your expectations and biases on the styles and thought processes of top performers in the culture you are familiar with. Therefore, focus on results and don’t pay too much attention to style and approach. Do not make comments on styles and do not impose your style and biases. Lastly, inclusiveness is crucial—even if you are the global lead for your function and feel very empowered, it would be helpful to seek inputs and advice from local geography. Not doing this would lead to loss of trust and weak implementation. Develop the maturity to consult and collaborate. Contact Hari TN at haritn@ambaresearch.com. april 2013 | INC. | 15
Your Business Toolbox
The Goods
Building a Better Password Tools for keeping web accounts safe Weak passwords can compromise your business and personal data. Still, many people use the same, easy-toremember password for all of their online accounts. These tools let you create strong passwords—and store them all in one place. —John Brandon
best for:
best for:
Dashlane
best for: Superstrong passwords 1Password
LaunchKey
MyLok+
This desktop software and mobile app lets you manage passwords and e-commerce account information. After downloading it on your PC, Mac, iPhone or Android phone, you create a master Dashlane password. Each time you visit a new site, the service prompts you to save your username and password. You can also click a button to generate a random eight-character password for each site. When you revisit the site, Dashlane logs you in. You can use Dashlane to fill in e-commerce checkout information, including addresses. It also sends an alert if a site you visit is breached. cost: Free
Much as with Dashlane, you install this software on your computer or smartphone and create a master password. Each time you visit a site, it prompts you to save your username and password. You can also click a button to generate new passwords containing up to 30 characters for each site. Unlike Dashlane, 1Password, which is available for Macs, PCs, iPhones, iPads and Android devices, does not fill in your login information when you visit a site. Instead, you must use a toolbar on your browser to log in. cost: $17.99 for iPhone and iPad; $50 for PC and Mac; free for a limited Android version
Set to debut this month, LaunchKey does away with passwords altogether. First, you download the app on your iPhone or Android phone. When you visit a LaunchKeyenabled website on your computer, you type in your username and the service sends a push notification to your smartphone prompting you to press a button to verify login. LaunchKey alerts you if someone tries to log in to a site with your information. If you lose your phone, you can deactivate the service remotely. One drawback: The service currently works on only a handful of websites. cost: Free
This metal USB thumb drive can store and encrypt more than 250 passwords. The 4 GB device comes loaded with a browser plug-in that prompts you to save passwords as you log in to websites. You can also automatically generate a 20-character password for each site. To use the device, you insert the thumb drive and type in one four- to eight-digit PIN. Then, when you visit a saved site, MyLOK+ automatically fills in your username and password. The device works on PCs, Macs, and tablets with a USB port. One drawback: If you lose it, you’re out of luck. cost: $190
Managing passwords and checkout
photos.com
Password-free login… Coming soon
best for:
storage
Thumb-drive
april 2013 | INC. | 17
Products + Services
must-haves
My favourite tool for creating animated vıdeos vlad barshai co-founder reachli san francisco
My company helps businesses market visual content on Pinterest and other social-media sites. Last spring, I was looking for a DIY tool that would help me create animated videos for our website. I read about a web-based service called PowToon, and I’ve been using it ever since. Creating a video on PowToon is similar to putting together a PowerPoint presentation. I start by coming up with a general concept and making point-by-point notes about what I want to portray in each frame. Then I log on to PowToon, create a video, add text, and drag and drop images and animations from a gallery. To add audio, I record a voice-over in iMovie and drag and drop the file into the video. Once the video is finished, I can upload it directly to YouTube or post it on our website. I use PowToon to create general tutorials for our site. When customers have a question about a specific aspect of our service, I often create short video tutorials and send the links to them. It’s a lot easier than explaining things in an email. One great feature of PowToon is the ability to modify videos easily. A few months ago, we changed our name from Pinerly to Reachli. It took 10 minutes to change the tutorial video on our homepage to reflect the rebranding. PowToon offers a free basic package, but we use the professional plan, which costs $57 a month and lets us create high-definition videos without the PowToon logo. —As told to April Joyner
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Worth a Listen Headsets for working on the go These days, more people are conducting business
calls on a variety of mobile devices. We tested three headsets that let you make calls or hold video chats on your smartphone, tablet or laptop. (All the units are black and silver; we added the colour.) Here’s how they stacked up. —J.B. Jabra Supreme UC *
This 0.64-ounce thumb-size headset, which features a 2-inch-long boom mike, can be paired with up to eight Bluetoothenabled devices, including smartphones, tablets, and laptops. It also comes with a USB key for use with a desktop computer or older laptop. You can sync it with two devices simultaneously; you just press a button to switch between them. During our test, the headset slipped on easily and fit comfortably. A noisecancelling feature removed background interference during Skype and iPhone calls, though we heard some voice distortion. A fully charged battery is good for six hours of talk time. cost: $149
Sennheiser VMX 200-II **
This discreet 0.35-ounce headset, which measures just 1 inch long, lasts for an impressive 10 hours on a full charge. During our test, call quality was excellent, beating out the other two headsets here. The headset can be paired with two Bluetooth devices, including smartphones, tablets and laptops. Unlike the other models we tested, it cannot be paired with desktop or laptop computers that don’t have Bluetooth capability. cost: $150
Plantronics Voyager Legend UC ***
Our top pick, the 0.63-ounce Legend can be paired with up to eight devices, including smartphones, tablets, laptops and desktop computers, via Bluetooth or a USB adapter. You can use the Legend with two devices at the same time by pressing a button to switch between them. The thumb-size headset, which features a 2-inch-long boom mike, stayed firmly in place. Call quality was excellent on an iPhone and Skype. Another plus: The Legend comes with a case that can double its battery life to 14 hours. cost: $200
From left: courtesy Subject; courtesy company (3)
the goods
Business Travel
the goods
on the road
Parking goes digital
Let’s Get Together Yotel features small workspaces with a hip vibe.
Goodbye, Business Centre Revamped hotel workspaces with an eye toward collaboration Dreary hotel business centres may soon be a thing of the past. These days, more hotels are
catering to the changing needs of road warriors by rolling out spaces designed for working in small groups. Here’s the skinny on three of them. —Jennifer Alsever
From Top: courtesy company; photos.com
Yotel
The Yotel New York at Times Square features eight “club cabins” with free Wi-Fi, a flat-screen display for presentations, and a boardroom table that seats up to six people on surrounding stools and a sofa. For a more casual vibe, the boardroom table converts to a coffee table. The cabins, which offer full waiter service, are available for rent by the hour by guests and nonguests. Business travellers can also meet in the hotel’s lounge, which has private booths. Yotel plans to roll out similar offerings in several new hotels worldwide. cost: $50 an hour
Westin Hotels
Westin began transforming its business centres last year, turning them into small-group workspaces that can be booked online by guests and nonguests. The rooms, currently in the chain’s Arlington Gateway, Grand Munich, and Boston Waterfront hotels, feature videoconference equipment, flat screens, printers, Wi-Fi, floor-toceiling whiteboards, and office supplies. Westin plans to roll out the concept in 30 hotels worldwide this year. It is also adding private nooks with noise screens to its lobbies. cost: $50 an hour
Marriott Hotels and resorts
Marriott recently converted the ballroom of its Redmond, Washington, property into a suite of small meeting rooms and common areas. The rooms, which include flat screens, free Wi-Fi, whiteboards, and individual cubbies, can be reserved by guests and nonguests online. Marriott is identifying other potential locations for the concept. In another effort to woo business travellers, the chain is adding communal worktables to the lobbies of 200 hotels. cost: $38 an hour
Nobody likes hunting for a parking space. Yet there hasn’t been much disruption in the parking industry—until now. New websites make it possible to find and reserve spaces in advance, so you’ll spend less time circling the block. An Airbnb for parking spots, ParkatmyHouse lets you locate, book, and pay for spots in private driveways, lots and garages in 2,500 cities worldwide. You can search by location, date and type of space. The site also provides maps and customer reviews. You can book spaces for 30 minutes to one year and get a printable parking pass. Have a spot to rent? Sign up for an account and add a listing. The service, which has an iPhone app, will email you if someone reserves the spot and pay you after the space has been used. Much like ParkatmyHouse, ParkWhiz lets you reserve and pay for hourly, daily or monthly spots in lots, garages and driveways in 80 US cities. Enter your destination, arrival time, and departure time on the site to see a list of spaces. When you book a spot, you get an electronic parking pass that you can either print or display on your smartphone. ParkWhiz also allows companies to book multiple spaces for events. —J.A.
Products + Services
tech trends john brandon
Getting in the Habit Apps with a fresh take on time management Like most people, I struggle with time management. Among other bad habits, I stay up too late at night and take too many coffee breaks during the day. I’ve tried time-management apps in the past, but most of them focus on how many hours you spend on websites or workrelated projects. Now, there’s a new breed of apps that takes a more holistic view of how you spend your days and nights, both online and off. I tested two of them, Lift and Chronos, to see if they could help me use my time more wisely. Lift, a free iPhone app with web and Android versions due out this year, lets you set daily goals and track your progress. After downloading the app on my iPhone 4S, I browsed a list of “habits” and checked off the ones I wanted to work on, including “Scan my business receipts daily” and “Sleep eight hours a night.” I also typed in a few custom goals, including “Drink only three cups of coffee a day” and “Spend only one hour a day reading blogs.” Each time I completed a goal, I had to remember to open the app and press a corresponding check mark. To nudge me in the right direction, Lift sent daily email reminders. I also received “props” from other users when I completed goals—a fun feature that helped me stay motivated. The app charted my progress by displaying stats in bar graphs. After three weeks, I was drinking less coffee and getting more sleep. I was even scanning my business receipts regularly. Lift was a big help. But I worried that manually checking off my activities would grow tiresome. That’s where Chronos comes in. The free iPhone app uses your phone’s accelerometer, GPS, and other location services to track your activities for you. After installing it, I adjusted sliders to indicate how much time I wanted to spend on various activities, including sleep (eight hours a night) and hanging out at a local
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After three weeks, I was drinking less coffee and getting more sleep. coffee shop (two hours a week). Chronos went to work right away. When I visited the coffee shop, it noted my location and how long I was there. The app figured out how much I was sleeping by noting when I set my phone down for a long period at night. Much like Lift, Chronos features progress reports in graph form. You can also view a map to see how much time you’re spending at various places. Unlike Lift, Chronos does not send daily email reminders or encouragement from other users, which I missed. Still, after two weeks, I had cut my time at the coffee shop to half an hour per week and was sleeping eight hours a night. Not bad. My verdict? Lift is the ticket for people who need external motivation. Don’t want the hassle of tracking your activities? Try Chronos. If you’re like me, the last thing you need is a time-management tool that takes up time.
Keeping the books
An antidote for accounting blues Still using that old shrinkwrapped accounting software? New cloud-based services are hoping to change that by luring businesses with interfaces that are elegant and intuitive. Xero, an online program with apps for iPhones, iPads and Android phones, features a dashboard that lets you see bank balances, recent sales and upcoming bills. You can pay bills, track expenses, reconcile bank transactions and send invoices customised with your logo. Another bonus? You can import invoices and expenses from web-based billing service FreshBooks. Xero, which supports double-entry accounting and 160 currencies, lets you view and share interactive reports. You can also track inventory using a third-party add-on and connect to your payroll system. Plans start at $19 a month for five invoices and 20 bank statements. A lower-priced option, Kashoo offers many of the same features as Xero, including FreshBooks integration. The double-entry system has an iPad app and supports more than 100 currencies. It lets you pay bills, track expenses, reconcile bank transactions, and send custom invoices. You can also view financial reports and statements on your dashboard. Unlike Xero, Kashoo does not track inventory, but a payroll feature is due out this year. Free plans include 20 transactions a month. For unlimited transactions, you’ll pay $16 a month, billed yearly, or $20 billed monthly. —Adam Baer
From left: courtesy subject; photos.com
the goods
A Genealogy of Success
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A Genealogy of Success
A Genealogy of
Success Within a few minutes of talking to her, it’s easy to understand why Anu Acharya, founder and CEO of Ocimum Biosolutions is so successful. Not only is Acharya undeniably sharp, eloquent and well-spoken, she’s also refreshingly objective and honest. Since 2000 when she co-founded Ocimum Biosolutions, a genomics software and services company, with Subash Lingareddy and Sujata Pammi, she has lived the life of a superstar entrepreneur. For one, the 120-people Ocimum, which is based out of Delaware, United States and Hyderabad, India has developed expertise in niche genomics areas such as lab automation, bio research design, data analysis and bio consulting. In both 2010 and 2011, it was named the Best Bioinformatics Company in India. Moreover, Acharya, an IIT Kharagpur alumnus and a double master's in physics and information systems from the University of Illinois, has personally been recognised for her contribution to genetics and entrepreneurship. Most notably, she was named a Young Global Leader by the World Economic Forum in 2011. Undoubtedly, her achievements go beyond creating a right product, and finding it the right market. So, we got her to tell us how she mapped this journey. Acharya delved deep into her experiences to put out her formula—and how more women can master these rules.
As told to shreyasi singh
Design by Shokeen Saifi Photographs by A. Prabhakar Rao | Imaging by Peterson PJ
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A Genealogy of Success
Build Relationships
When we began Ocimum about 12-13 years back, I was a Physics graduate who had started a company in biomedics. Of course, this required getting the hang of the technical expertise in the field of biomedics. But, equally importantly, it also necessitated creating a network of contacts from the ground-up in an industry I earlier had no experience in. So, I started networking—actively—from day one. I understood that even with the best product in the world we couldn’t be successful if we didn’t go to the right market, and make the right connections. So, I made a conscious effort to network, both physically in terms of attending events and conferences, and digitally. It was interesting, to say the least—people weren’t used to seeing a young woman in her 20s at all the industry conferences and forums. In fact, I had almost a regimented routine to spend a few hours a day on LinkedIn, for example—to write to or try and meet all the translational medicine professionals working in big pharma companies. My co-founders thought it was a waste of time. But, I held on. Eventually, I began to see results. I think it’s important to be there, and to be visible. It leads to acceptance, and I had people tell me that they accepted my invite, or agreed to meet me because I seemed to know everybody they knew. These contacts helped us a lot to generate leads. Both my other cofounders who were sceptical of this approach were also convinced when we started seeing results. I have to say doing this came easily to me. I’m outgoing and very open to having a discussion. It’s a core strength I’ve brought to the company.
“I made a conscious effort to network by attending events and conferences, as well as digitally. I had a routine to spend a few hours a day on LinkedIn.” —Anu Acharya 2 4 | INC. | april 2013
So, yes, absolutely, networking is hugely important. As a person, I’ve always been the centre point of my networks—be it friends from school and college, or former colleagues. Of course, creating a new industrynetwork is very different from making sure old friends meet up with each other. But, even after founding Ocimum, I didn't limit myself to meeting people and networking just for business although in the beginning it began like that. I realised early on that a great network does not work one way. For example, I began a Facebook page for women in IT. Forums such as these open dialogues, and you don't know what conversation or idea it can trigger off.
Don’t Leave, Stay Back
It’s true that most of the business deals do happen at the after-conference networking session, and drinks. I do believe that the difference between men and women entrepreneurs comes up most dramatically here. It's at this stage of the conference that most women leave. It's important to think about this—you might have gone to the conference, but is that enough? How do you get the most out of the conference? Maybe, I’ve been in an industry where there are not that many women and even from that pool, I’m usually one of the few women to stay back after the sessions wrap up to foster personal relationships, and talk as human beings. See, people start giving you business once they trust you, and are comfortable with you. You might have competency but the eventual sale won’t happen till there is trust. This is a vital ingredient to building a long-lasting environment. Of course, it wasn't always fun or easy to do this. I’ve had several amusing and not-sopleasant experiences while networking at conferences. For instance, I’ve always been a furious business cardgiver. And, I remember one particular professor at a conference I was sitting and talking to refused to give me his business card. He just wouldn’t share his card
A Genealogy of Success
with me till some other people joined in the discussion, and one of them told him I was from IIT Kharagpur. It’s only then that he began to take me seriously. There’s a lot of subtle bias when it comes to women, and you often need the right introduction to be able to get over that. I remember another similar instance when I was sitting in a stall at an exhibition we’d participated in. An older gentleman came and began talking to my male colleague who was at the stall with me, and told him how he’d met the company’s CEO at another event. My colleague was amused, and introduced me to the older gentleman. He was really taken aback. So often, I’ve seen that expression—that they didn’t expect to see a woman, and if they did see a woman, they didn’t expect to see such a young woman! A couple of times, these biases have been unpleasant. I remember losing my cool once at a gentleman. But, I’ve realised that it’s best not to get agitated. It's not going to help. Don’t take the bias personally—address it, definitely engage in a debate and conversation that is logical but don't make it about yourself. Most importantly, don't give up. Continue to show up and to stay back. Younger women today understand that it’s important to be around. Honestly, I’ve sometimes felt that I’ve lost out on certain opportunities because maybe I don’t play golf, or a round of tennis—that I’m not a part of the old boys’ network. Yes, this exists. Although overall, there has been some change in the number of women one sees at conferences and events, the ratio is still pretty bad, both in India and the US where most of our clients are. It's possible that the ratio of women is slightly better in the US but it’s certainly nowhere close to being equitable even there. I’m hoping women can create their own girls’ network based on shared experiences and ambitions. I've become very conscious of playing my role in creating this network over the past few years. For example, I refuse to speak at events where younger women are not being given a chance to speak, or where an effort hasn’t been made to go beyond getting the staple names and not encouraging other women to come up. I remember being quite upset at the Pan-IIT Conclave which I was involved in organising for this reason.
Have Irreplaceable Passion
I know many women don’t want to be overtly ambitious because they think that will disturb their family life. My co-founder is like that. But, I had completely different ambitions. And, I’ve been fortunate to have a fantastic support infrastructure—
The Wind(s) Beneath My Wings Sarla Acharya, my mother who I have always seen smiling regardless of the stress. She inspires me to think beyond what is possible and to smile all the time, which I think I’ve learnt to do quite well. Her smile therapy has great benefits— for one, she says it makes you more productive, and helps in cutting down stress.
Anula Jayasuriya, my board member and mentor for the last seven years. Incredibly bright, she has MBA, MD and PhD degrees from Harvard University. Of course, she is extremely competent, and has been a huge help in my business. But, most of all she has taught me humility because despite her many achievements, she is extraordinarily humble. Also, in times of crisis, she’s made extra efforts to support me. Actually, she’s taught me that being human goes beyond the boundary of expectations set in the board room. A true mentor, she also makes me want to give back, and to help other women just as she has
My mother-in-law, Dr Gargi Pammi. A doctor turned entrepreneur (she founded the Mukunda Diary), she has taught me that relationships are the foundation of both business and family. And, also that relationships need both nurturing and space to flourish.
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A Genealogy of Success
Stress-Free Rules
Future Map
Family Time: Enjoy your time with family regardless of the quantum of time you get.
Anu Acharya's latest venture mapmygnome.in will decode DNA and indicate genetic health risks that people could’ve possibly inherited from parents, or have accumulated over time due to lifestyle, environmental insult and other factors. This decoding results in what the company calls the GenomePatri (health horoscope) which provides people with warning signs of latent immunity weaknesses, predisposition for certain illnesses, and highlights sensitivity to drugs. Acharya says the company was born out of her need to create a larger impact. “For 12-13 years I was driven by establishing Ocimum. But, I felt we needed to do more about bringing direct healthcare-related knowledge to people. By this, we can spot out potential risks and help people live healthier lives.” Founded in late 2011 with a capital investment of `10 crore, mapmygenome currently addresses 20 diseases, 35 traits and 39 drug responses. It hopes to have 2,000 users and `10 crore in annual revenue within two years.
Habits: Adjust your habits to ensure that you have time for yourself. Only a few months ago, I changed my habits to bring exercise into my schedule. Delegate: Choose the right person and shower praise at
Speaking Out Acharya is a governing board member at CSIR (Council for Scientific and Industrial Research) and NIBMG (National Institute for Biomedical Genomics. She also serves as the Vice Chair of the Global Agenda Council on Genetics for the World Economic Forum.
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those who will help you get your work done. Outsource: Certainly, outsource whatever you cannot do within your schedule even if you can do it better. Read, Sing, Dance, Run: Do whatever makes you happy whenever you find time. I cook.
both emotional and to raise my daughters, be it my mother, my mother-in-law or even my grandmotherin-law. Sometimes, the fear of not having this support is one of the prime reasons why women hold back. In fact, I’ve seen people get stuck at that point, and not be able to cross it. Here, being able to identify what you are passionate about is critical because then the above challenges don’t seem insurmountable. I’ve witnessed this personally. When I had my first baby, the company I worked for gave me a six-week maternity leave only. I was extremely upset about that. I didn't know how I would manage. But, when I had my younger daughter, I was working for myself. Two days after having her, I was itching to use my laptop and get back to work. When you love what you do, you react differently. Entrepreneurship is my passion. In fact, a young woman who heard me at a conference in Harvard University said she wanted to be like me, and do the kind of exciting things I was doing. But, she said she was waiting to have enough money saved up before she jumped into creating her own ideas. I couldn’t help but
tell her—if you want to do the kind of things I’m doing, you don’t do it for money. Entrepreneurship is about doing things with limited resources, and still enjoy them. It's the process, not the end. Just today I watched a video by British philosopher Alan Watts, the theme of which was “What Would You Do If Money Were No Object”. His point is simple—if you’re going to spend so much time doing something, it’s not possible to be good at it till you enjoy it.
Work Is Life, Life Is Work
Some phrases get attached to women in the workplace, and work-life balance is one of them. I don't dwell on this balance much as it forces one to separate work from life, and life from work. An entrepreneur has chosen a life that is her passion even though others might see it as work. I do admit that to others it might seem that my life has revolved around excesses. I'm driven by reaching goals that don't seem reachable when you begin, and then constantly re-setting new goals. I'm not apologetic about this pace. Over the years, I've realised that this is how I function. It’s the way of being and living that makes sense to me. Not everybody might think so, but it’s possible to build families and businesses together. Maybe because there are such few women founders that their experiences aren't visible. They get zoomed out. Today, in my new start-up, my daughters (aged 13 years and 6.5 years) are as involved as I am.
the troll toll Patent trolls drain businesses of billions of dollars a year. And if you have a website—any website—you are a potential target. Here’s what you need to know if they come after you by kris frieswick illustrations by shigil narayanan
“I felt like I’d been mugged.” Chris Friedland is fed up with the patent system. In the past two years, he has been hit with 18 patent-infringement claims. Friedland’s Chico, California–based company isn’t the type you would think would bump up against a lot of high-tech innovations. He runs a basic e-commerce site, Build.com, which sells home improvement and plumbing supplies. But in 2009, Friedland received a letter accusing Build.com of violating a patent for web server technology. The claim struck Friedland as ridiculous. By his reading, the patent was so broad that it would affect anyone who had ever used the internet. But when he consulted his lawyer, it became clear that this was no joke. The letter came from a type of company known as a nonpracticing entity, which owns patents but never uses them to create anything. These companies make money solely by pursuing potential patent infringers and demanding licence fees. This particular NPE (Friedland can’t name names because of a nondisclosure agreement) had a compelling case, said Friedland’s attorney. The infringement letter referenced several large companies that had already paid licence fees for the patent. “We wrote a cheque and thought they’d go away,” he says. “But then the trolls just rushed in.” Troll is a derogatory term for the most aggressive types of NPEs. Friedland isn’t sure how word of the settlement leaked to Troll Town, but he says that after he paid the fee, he was inundated with infringement letters from trolls. The patents in question were amazingly broad: There was one for transferring data through a network, another for using images on a website, another for having a computer that connects to a database. “I mean, if you own the patent for connecting computers to a database, you should go after Facebook or Google, not some stupid plumbing company, right?” says
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patent trolls
“The best business to be in right now is being a patent troll, and that sucks. They’ve got nothing to lose.”
Friedland. Many of the letters were threatening. “They say, ‘Send us a cheque for $10,000 or we’ll sue you,’ ” he says. “It’s a shakedown. They know they don’t have a leg to stand on. But they know you’ll pay for a licence instead of going to court.” In 2011, patent trolls cost US companies more than $29 billion in legal fees and settlement costs, according to a study by the Boston University School of Law. The trolls target mostly small and medium-size businesses— companies with annual revenue of $10.8 million on average, according to the study. Nearly any company that uses basic technology or operates a website is a possible target. Trolls are litigation machines, the natural result of a patent system that has done a terrible job of evaluating and granting software patents—and a court system that hasn’t done much better at examining them. In some cases, trolls are forcing business owners to choose between paying employees and paying legal fees. Jim, the founder of a small web services company who asked that his real name not be used, has been hit with six patent-infringement notices, including one involving a patent on sending notices via social media. He says the claims are bogus, but he can’t afford to go to court or to pay the licence fees the trolls are demanding. Instead, he says, “I may have to just drop the product line that they claim is infringing and lay people off.” It’s a decision that pains him, but Jim says the trolls have him over a barrel. “I want to fight,” he says, “but I have 180 other employees to look after.” “The best business to be in right now is being a patent troll, and that sucks,” says Eugene R. Quinn Jr., a patent attorney with Zies Widerman & Malek and founder of patent blog IPWatchdog. Unlike the companies they target, trolls can’t be sued for patent infringement because they don’t make anything. “They’ve got nothing to lose,” says Quinn. “That’s the problem.” Acacia Research and Intellectual Ventures, widely considered the two most successful patent trolls in the country, insist
that their business model, far from harming innovation, actually helps inventors. “In order to have any value to their patents, many patent holders have to partner with a company like Acacia,” says Paul Ryan, CEO of the company, which made $184.7 million in 2011 in licence fees and settlements. “We think we’re providing a valuable service.” Acacia frequently partners with inventors and splits the licence fees. Ryan estimates that 70 per cent of Acacia’s patents come from small companies or individual inventors. “Once they realise that a patent assertion is being made by someone who doesn’t have the money to pursue it, a lot of large companies delay until the inventor runs out of money,” says Ryan. Most NPEs are unlike Acacia, however, in that they do not share revenue with inventors. They simply buy the patents outright, often from failing and bankrupt companies. Software Patents, a Troll’s Best Friend Patents on computer software are universally acknowledged to
be the most vague, poorly written, and difficult patents to decipher. Software patents, by one estimate, account for just 12 per cent of all patents. But they make up 74 per cent of the most litigated patents, according to a 2011 study published by The Georgetown Law Journal. (The majority of the plaintiffs? Nonpracticing entities.) Software patents have been around since the early ’60s and kicked into overdrive in the late ’90s. The U.S. Patent and Trademark Office didn’t have much software expertise at the time, and it approved many overly broad patents. One such patent covers the “interactive web.” The patent, owned by a company
who’s behind the trolls?
Here are some of the people running the show, according to public records.
Nathan Myhrvold
Intellectual Ventures The largest patent troll, Intellectual Ventures has acquired some 70,000 patents.
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Mark Small
Lodsys Lodsys bought a patent and went after many iPhone app developers in 2011.
Paul Ryan
Acacia Research Acacia partners and splits earnings with inventors. In 2011, it made $184.7 million.
Craig North
Gooseberry Natural Resources This shell sued AOL, Digg, and other online publishers.
Michael Doyle
Eolas Eolas bled millions from businesses with its patent on the “interactive web.”
rulings seem to signal that it would not uphold patents that take called Eolas, was finally invalidated at a trial last year—but only familiar, abstract concepts (like watching a TV ad) and simply after being successfully used for more than a decade to extract add on the internet. millions of dollars from many companies. In 2004, Eolas won a Amazingly, software patent-infringement suits usually fail in $565 million judgment against Microsoft, which later settled for court. According to the study in The Georgetown Law Journal, an undisclosed amount. software-patent holders—including NPEs and actual compaExperts say patents like Eolas’s should never have been nies—win just 13 per cent of their court cases, compared with a granted, because, for starters, the technology already existed 50 per cent win rate for nonsoftware-patent holders. But most when the patent was filed in 1994. But because few companies cases never get that far. In an estimated 90 per cent of cases, the had actively patented software before the late ’90s, there was defendants settle before going to trial. In other words, the trolls’ very little prior art. Prior art—published evidence that key conentire business model is built on the assumption that software cepts in a patent application existed before the application was patents are so mysterious and complicated—and legal battles so filed—is grounds to deny or invalidate a patent. Because of the expensive and distracting—that limited amount of prior art the no one will challenge them. patent examiners consulted Partly because so many (mostly other patents) and the companies settle, it’s tough to time constraints they faced in the shakedown nail down the number of dubiapproving or denying patent Patent trolls have become a drain on ous patents out there. “There’s requests, thousands of patents small and midsize businesses, which often no way to really know how were issued for software-based lack the resources to fight back. many patents are improvidently “inventions” that weren’t new granted,” says Samuels. “What and were in wide use. These patIn 2011, patent trolls cost US businesses more than we do know is that the numbers ents used such broad language of overbroad and vague patents that it was nearly impossible to asserted by trolls are growing determine their limits. in legal bills and settlement costs. everyday. Litigation is expensive, and the system incentivises Confusion in the Courts The average company targeted by patent trolls has you to pay the trolls to go away Today, the patent office does rather than prove that the pata much better job of forcing in annual revenue. ents are invalid. Until we see software-patent applicants more defendants fight back, to be more specific, but that we’ll never know.” doesn’t help with the vague patThreatened with the cost of going to court, most companies give in to the trolls’ demands. ents that have been granted. When these murky software The Hunt for Solutions patents eventually wind up in Because of these issues, some court, judges often disagree business leaders, including venof defendants in software-patent cases settle before going to trial. about what the patents encomture capitalist Fred Wilson and pass. Conflicting rulings come investor Mark Cuban, have down almost weekly. One recent called for an end to software case concerned a patent on the patents. People who defend idea of forcing online users to watch an ad before showing software patents say they do protect genuine inventions and copyrighted material on the internet. The patent holder, argue that efforts to weed out trolls will hurt innovation. “A Ultramercial, has sued many companies, including Hulu. “But number of people look at the problem and say, ‘Abolish software the patent doesn’t even tell you how to put the ad on the interpatents,’ ” says Mark Lemley, a patent-law professor at Stanford net,” says Julie Samuels, staff attorney for the Electronic FronUniversity and a founding partner at intellectual-property law tier Foundation, a nonprofit that promotes freedom of firm Durie Tangri. “But there are really useful inventions in softinformation online and has campaigned to get bad software ware that we want to protect. There’s a really hard line-drawing patents invalidated. problem.” He points to the software that enables a Toyota Prius The Ultramercial patent was upheld by the U.S. Court of hybrid engine to switch from gas to electric. “That controller— Appeals for the Federal Circuit. But the Supreme Court asked that’s a piece of software,” he says. the appeals court to reopen the case in the light of recent Besides, says Lemley, the countless companies that have softSupreme Court rulings about the part of the patent law that bars ware patents will fight hard to keep them. “Depending on how anyone from patenting an abstract idea, a law of nature, or a you count,” he says, “there are between 5,00,000 and a million natural phenomenon. The Supreme Court’s recent software patents in force in the US today. That’s a lot of constitu-
$29 billion $10.8 million
90%
april 2013 | INC. | 3 1
patent trolls
“These are just attorneys who have made the decision to ruin people’s lives. It’s capitalism at its purest and worst.”
encies that wouldn’t want to see them eliminated. I think such a change is politically infeasible.” But Congress has made some progress, most notably with the America Invents Act, a patentreform law that was passed in the year 2011. There are plenty of people who complain that the law, which goes fully into effect in March, doesn’t go far enough. But it does reduce patent holders’ ability to list mul- DeFazio of Oregon and Jason Chaffetz of Utah have proposed a tiple unrelated companies as co-defendants in a lawsuit—a pop- bill, called the Saving High-Tech Innovators From Egregious Legal Disputes (or SHIELD) Act, that would force NPEs to pay ular tactic used by trolls. It also broadens protections for inventors who accidentally infringe on patents through simulta- defendants’ legal costs if a judge determines that a patent lawsuit neous invention, and it clears the way for any interested party to didn’t have a reasonable chance of succeeding. Some in the private sector are also working on solutions with contest patent applications by submitting prior art. In addition, the patent office. In August, Google launched a free prior-art the legislation creates a new administrative method, called a search tool, which scours many sources, including other patpost-grant review, intended to help weed out bad patents withents, academic research, the web, and books. “I’ve never met out litigation. However, many of these provisions apply only to anyone who thought that the patent system as it exists today is a new patents. net benefit for the software industry,” says Google Some in Congress are still trying to software engineer Jon Orwant, who manages the fix the troll issue. Vermont Senator PatFighting Mad project. In September, Stack Exchange, a questionrick Leahy, who co-authored the AmerChris Friedland of Build.com, and-answer site co-founded by Joel Spolsky and Jeff ica Invents Act, has been conducting which sells plumbing supplies, has been hit with 18 patentAtwood, teamed with the patent office to launch Ask hearings on the impact of NPEs on infringement notices. Now, Patents. The site uses crowdsourcing to find prior art small business. And Congressmen Peter he’s rallying other companies and assess the claims of new patents. to stand up to trolls. Meanwhile, several tech companies, including Google, Facebook, Intuit, and Rackspace, filed a 30-page amicus brief to the U.S. Court of Appeals in December, asking the court to reject patents on abstract ideas that involve a computer or the internet. “Such bare-bones claims grant exclusive rights over the abstract idea itself, with no limit on how the idea is implemented,” reads the document. “Granting patent protection for such claims would impair, not promote, innovation by conferring exclusive rights on those who have not meaningfully innovated, and thereby penalising those that do later innovate by blocking or taxing their applications of the abstract idea.” Entrepreneurs Fight Back Unfortunately, none of these initiatives will make the
kind of broad changes needed to curb the troll attacks against small and medium-size businesses. For now, the best recourse is to stand and fight. Steve Vicinanza is one of those launching a counteroffensive. About a year ago, his company, BlueWave Computing, an Atlanta-based IT consulting firm, received an infringement claim from an NPE called Project Paperless. It owns a patent on scanning paper documents directly into an e-mail attachment. The patent was issued in the late 1990s and had gone through a series of owners before passing to Project Paperless in 2011. The troll demanded that Blue3 2 | INC. | april 2013
Photograph by robyn twomey
Wave, which has more than 100 employees, pay a one-time of the trolls backed down, he says. But a few sued. Friedland licence fee of $1,000 per employee. But BlueWave doesn’t make started calling other defendants, most of which were not direct office equipment—it just installs it. The claim struck Vicinanza competitors, and asking them to join with him and share as so crazy that he ignored it. resources. “I would tell them that we have mutual interest,” says But then Project Paperless sued him—and named 100 Friedland. “And that if we work together, we can get it resolved of Vicinanza’s clients as co-defendants. The troll claimed these in the best way possible for all of us. As a group, we are stronger customers were also infringing thanks to the printers and IT than as individuals.” For one suit, Friedland managed to pernetworks that BlueWave had set up for them. Vicinanza could suade all the co-defendants to fight, even though many initially either go to court or pay the licence fee, which was now douwanted to settle. The case is still ongoing, and there are more ble—more than $2,00,000. battles ahead: Friedland is still involved in six other disputes Though his attorney advised him to pay the fee, Vicinanza and continues to get new infringement notices from other patdidn’t like the idea. “I know a lot about this stuff,” he says. “I pulled their patent. I said, ‘This is crap!’ I’m Italian, and we know how this stuff works. It’s called extortion. When people try to extort money out of me, I fight back.” Vicinanza paid a Seattle firm $5,000 to conduct a prior-art search. When he had enough ammunition, Vicinanza warned the troll that he had evidence that How to get rid of a troll invalidated the patent and was going to request a Tips from entrepreneurs who have battled and won reexamination. Soon after, Project Paperless dropped geted by the patent 2. Do a prior-art 1. Fight back the suit. All told, Vicinanza estimates he spent about troll and get them to search Most companies $50,000 on the fight, but he considers that a victory. join you in your fight, Patents are hard to would rather pay a “People kept telling me that this would cost $1 milsays Friedland. You overturn—it’s much fee than go to court, lion,” he says. “I got off for a fraction of the fee I would can share information easier to fight the and that’s what trolls and resources. infringement than the are counting on. have had to pay if I had settled. And if I had settled, I patent itself. However, Though they threaten would’ve gotten agita when I wrote that cheque.” 4. Be annoying if you can find proof companies with lawDrew Curtis, founder of Fark.com, a news aggreMake the process as that a patent is suits, trolls win only gation site, is also encouraging other entrepreneurs to invalid, you can some- painful, annoying, and a small fraction of fight. Curtis’s company was sued in 2011 by Goosedifficult as possible times frighten the cases. Chris Friedfor the troll, says troll away, says Steve land of Build.com berry Natural Resources, an NPE with a patent on a Drew Curtis of Fark. BlueVicinanza of says that when he web form used to create and send out press releases com. This is the tactic Wave Computing. made it clear he was online. Fark doesn’t do anything like that, but trolls that trolls normally ready for a fight, don’t have to prove infringement in order to file a use on entrepremany of the trolls that 3. Get support lawsuit. “These are just attorneys who have made the had targeted his com- Find other companies neurs, but it also works well in reverse. that are being tarpany backed down. decision to ruin people’s lives,” says Curtis. “It’s capitalism at its purest and worst.” Many other companies, including AOL, Yahoo, and Digg, also got hit with the suit. Curtis refused to pay up. “I was the only guy in the lawsuit that wasn’t a ent trolls. For him, the long-term answer is changing the patent conglomerate or venture-cap-backed company, guys who had law. (He would like to see the life of a software patent reduced war chests,” says Curtis, who spoke about his experience at a from 20 years to two years and patent rights go only to the origiTED Conference last year. “And I was the only guy that fought nal inventor or company that commercialises the invention.) it.” After Curtis made several discovery requests—asking Gooseberry to provide, for example, screenshots demonstrating Until that happens, he encourages companies to reject the nondisclosure agreements that trolls routinely insist upon as a conFark.com’s violation of the patent—the troll offered to settle. Curtis refused to sign a nondisclosure agreement or pay a settle- dition of settlement. Instead, he says, companies need to share their experiences with one another. “It’s like being an abuse vicment fee. To his surprise, the troll backed down. (Curtis won’t tim,” he says. “If you don’t talk, you perpetuate it.” divulge how much it cost him to wage this war. He will say only that he got outstanding American Express points paying his legal fees with his credit card.) Friedland, of Build.com, has also begun taking a stand. When he made it clear he was ready for a fight, the majority april 2013 | INC. | 3 3
HOW I DID IT
Learning without chalk and board Shantanu Prakash Educomp Solutions
There isn’t an education vertical that the Gurgaon-based education giant Educomp Solutions has not ventured into since its inception in 1994. Sample this. The `1,522-crore company runs over 250 pre-schools, 69 K-12 schools, seven colleges, one higher education campus, 343 vocational training centers and 74 test prep centers. But wait, there’s more. Founded by Shantanu Prakash, the 17,000-people company manages to reach 20 million students across the globe. Prakash is happy with the numbers but says creating an entrepreneurial culture in the education sector has been his greatest achievement. As told to Ira Swasti / Photograph Courtesy Subject
I grew up in Rourkela. My father used to work at SAIL and my mother was a school teacher. We moved to Delhi after I completed grade 10. I did my bachelors in commerce from the Shri Ram College of Commerce, Delhi University. During my college days, I used to run an events management company along with a friend where we’d organise rock concerts in hotels and sell tickets. We made about `4-5 lakh which was fairly good money in the 80s. But then the stock market bug hit me and I lost all my money trading on the Delhi Stock Exchange. The events business was more like a side hobby that I pursued in college. I realised that there was more value in getting an MBA from the IIMs and I knew that I could always come
3 4 | INC. | april 2013
back and do business. So I temporarily suspended the events business to go to Ahmedabad while my partner continued to run it. While doing my MBA, I realised that the events business was not something to build a career on. I wanted to do something more serious that could create a greater impact. Fortunately, at that time, CBSE had introduced computer science as a new subject in schools and schools had no idea of how to set up a computer lab. I saw a great opportunity there and set up a small company along with another partner that helped schools build computer labs. I didn’t have formal training in computers or IT but a good entrepreneur is one who knows how to acquire the knowledge even if she doesn’t have it. So I got other
The New Age Tutor
Shantanu Prakash had already run two businesses before he set up Educomp Solutions in 1994. Since then, the company has helped children in 32,000 schools to learn better.
HOW I DID IT
people who had that domain knowledge to do it for us. We had started this business with almost
zero capital. We went to schools, got contracts to build a computer lab, and then went to companies that leased computers, showed them the contracts to get their hardware. These companies used to charge a very high rate of interest, about 20 per cent in those days. But it still made sense as the business was profitable. Expensive capital is better than no capital and as you start building something, capital also slowly starts coming to you. We grew to about 50-60 schools by the second year. Our turnover around that time was `4-5 crore. But soon, there were some differences in the way my partner and I saw the future of our business.
I believed that in India, the real challenge
was not in setting up computer labs. Our education sector had a more fundamental challenge, and that was—how can you make children learn better? This realisation hit home when one of the schools we’d set up a computer lab in had a technical snag. The entire computer lab shut down. But, the school went on undisturbed. That made me realise that computer labs were not very important to the functioning of the school—they were not the heart and soul. So I started asking teachers what is really important about running the school and they said that the reason we exist is to make children do better at school.
To make that happen, we needed to invent
better ways to help them learn maths and science. This required a lot of research and development, and meant taking the company in a completely different direction. My partner on the other hand wanted it to be a product company building computer labs for schools. I wanted to create something else altogether.
So, we decided to part ways. We split the
revenue from the business amongst ourselves. He continued to run that business while I set out to lay the foundations of Educomp, with less than `1 lakh in hand in
3 6 | INC. | april 2013
“When you’re making a sales pitch, instead of explaining the numerous different features of your product, try to figure out the customers’ problems and how you can solve their problems with your product.” 1994. I think I got my first school to buy our software more on faith than on data. We didn’t have a software or sophisticated product to go by. I was already in the education business and knew a few school principals. We went to teachers to show them what we had, and when they asked us how much more content we had, we said we didn’t have more but we could develop more according to your needs. While selling our products to teachers, I learnt that understanding the customers’ pain was more important than what we had to offer. When you’re making a sales pitch to someone, instead of explaining the numerous different features of the product you have developed, try to figure out what the customer’s problem is and then just focus on how you solve that problem. For instance, when the teachers told me that children are struggling with mainstream subjects, going to tutors and facing a lot of stress instead of learning how to work on a computer, I thought, could I could make children more productive in class, so that they could understand maths and science in a better way than simple chalk and board. That’s how we ended up building the animation content software called Smart Class. By 1998, six years after starting out, our revenues stood at `3.5 crore. Then the com-
pany started growing. In the year 2000, we received a $2.5 million of venture capital and by FY 2007-08, Educomp had clocked revenues of `276 crore. I think the biggest turning point for Educomp however, was going for an IPO in 2006 as since then, the company has been growing 100 per cent a
year. We could have gone for private equity but the capital markets were more mature at the time and excited about entrepreneurship than VCs, like today. Like any other business, we had our share of challenging moments in terms of transition and scale. Around 2008-10, we grew the business very rapidly, around 5X but we found that the backend of the organisation—the supply chain, the inventory system, the ERP system, the order fulfillment system—hadn’t kept pace with it. We had all these customers placing orders but our ability to deliver those orders was constrained and so we had to do a lot of business processing to scale it up. At such times, you have to believe that your capabilities are bigger than these challenges and you’d be ready to face the next challenge. There is also a myth about teachers being
wary of digital modes of education because that will make them obsolete. Our products are such that they require teachers to be present to teach. All we do is provide them tools to do a better job. When teachers use Smart Class, students do better in school and the credit goes to teachers. If their results are good, the teachers get better ratings too. Smart Class is used in 15,000 private schools and 12,000 government schools today. I think that busts the myth.
Educomp has won many awards but I think my biggest achievement has been to create a culture of entrepreneurship in education. There are so many companies who have followed us into this sector. Being the beacon of hope and inspiration for other entrepreneurs is very satisfying.
xt Gen uting
other food groups I mentioned in my previous answer, is outstripped by the capabiliADVERTORIAL ask the expert ties of the mainstream processor family, which in today’s incarnation is Intel’s Xeon E5 2600 series. In response to this phenomenon, Intel subdivided the Xeon lineup to include a new “EN” class of processors, the E5-2400 series, which ease back on the gas pedal of Moore’s law for designs that don’t require as much processing power in relation to local storage and memory. This creates a new class of cost & performance optimized systems for lighter workloads or for storage heavy systems (think big data) at the entry end of the portfolio. various permutations of server designs Three of our new UCS M3 series systems required to cover the myriad of workloads fall in this category: the B22, C22 and C24. most efficiently. Think of these as your four At the same time, Intel has brought four server subsystem food groups. Architecsocket server options, formerly the provture purists will remind us that everything ince of the mission critical, “EX” end of the outside the processors and their cache spectrum, down into the mainstream. An falls into the category of “I/O” but let’s not example of this is our new UCS B420 blade. get pedantic because that will mess up my if you want fourthat socket core count Q: RLC is India’s largest reverse logistics company So intelligence solutions we can put on top ofand large with around 500 people in our 15 offices in India. We amount of customer and product data which would food group analogy. performance but don’t necessarily need the have developed a world class proprietary, open help us make intelligent strategic business decisions. In Cisco UCS, I/O is effectively taken source solution. This open source solution tracks a comprehensive RAS features of an EX class returned product from the point of return all the way till A: Analytic solutions are available on a license as well off theittable a design worry because now have a price/performance gets aas new lease of life through our repair factory system, as cloudyou model which can help create a GTM to and getsgets sold through retail andofe-tail network. We optimized address more customers every server its fullour USRDA netsolution forand thatunderstand need. customer are looking for our IT team to seamlessly integrate buying patterns/user profiles. We have an end to end working through the VIC: helping pormobile technology into our ordering systems so we infrastructure solution and work closely with analytics For any queries regarding UCS, please send can reach out to even more customers vendors like SAP, SAS and Greenplum to help solve tions of bandwidth, rich with Fabric and scale our them yashvendra.singh@9dot9.in business. We also need help identifying business theirtoproblems. From a mobility perspective many solution providers have such applications and can Extender technology vitamins that yield customise a ground up application based on the hundreds of Ethernet and FC adaptoutput required. We work closely with such independent BROUGHT TO YOU BY software vendors (ISVs) to provide these solutions. ers through one physical device. Gone are the days of hemming and hawing over how many mezz card slots your Ashish Wattal blade has or how many cards you’re going National Product Manager– UCS to need to feed that hungry stack of VM’s on Cisco India & SAARC your rack server. Intel, the Intel logo, Xeon, and Xeon inside are trademarks of Intel Corporation in the U.S. and/or other countries This simplification changes things for the
e articles, Cisco will shed d Computing System g CIOs to better manage
Hitendra Chaturvedi Founder, Reverse Logistics Company (RLC)
advts.indd 58
3/23/2010 2:32:15 PM
Tactics. Trends. Best Practices.
Hands on
Strategy Pivot as if you planned it all along Shifting business models doesn’t have to be a last resort Ever since Eric Ries, author of The Lean Startup,
coined the term pivot, it has become a buzzword in entrepreneurial circles. (Even Oprah proclaimed that her beleaguered television network had “made the pivot.”) Though companies such as Fab have gained renown for upending their businesses to stay afloat, pivots aren’t reserved for companies on the brink of disaster. In fact, Ries says more companies would be successful in their pivots if they didn’t wait until things went wrong before planning their strategy. BitMethod is a good example of how a well-planned pivot can help a business make a smooth transition from one business model to the next. Dan Shipton co-founded BitMethod, a software development firm, in 2009. Thanks to a few early successes, the Des Moines– based company gained a solid reputation as an IT consulting firm and a developer of mobile apps for client companies. From the start, however, Shipton wanted to develop products under the company’s own name. “We could never pick up another 100 clients overnight,” he says. “But with our own app, we knew that there was high growth potential.” That opportunity came along in the winter of 2010. A friend of Shipton’s who owned a coffee shop mentioned how great it would be to have a simple cash-register app that would allow him to use payment services such as Dwolla. After asking a few other café owners whether they had similar needs, Shipton sat down with his partners and staff to discuss the idea of developing an app of their own. BitMethod employees conducted informal market research and noted that they had received similar requests from clients in the past. By the spring of 2011, the illustration by manav sachdev
company committed to developing a point-of-sale app for coffee shops and quick-serve restaurants. Shipton gave it the name Change. Here are a few lessons the company learned from the transition: Get your team on board By getting the rest of the company involved in the decision to pursue Change early on, Shipton avoided any rifts among his staff. In fact, a consensus developed that not only was the new app a real opportunity, but it seemed to offer a much better prospect for fast growth than any of the company’s other projects. “Everyone went out and validated the idea,” Shipton says. “That’s why we didn’t end up having knockdown, drag-out fights over it.” Focus your effort Initially, BitMethod continued to work on new projects for clients while developing Change, but that proved to be overwhelming for the company’s employees. “If we kept our client work, we knew we would never get this out,” says april 2013 | INC. | 3 9
hands on
Shipton. So last March, he and his partners decided to stop taking on new work from clients. BitMethod launched a pilot of Change just two months later.
“Everyone in the company needs to be clear what’s the old thing and what’s the new thing,” says Ries.
Maintain a revenue stream
Dropping app development for outside clients slashed BitMethod’s revenue. The company did have a backup source of cash flow, however. Even as its development team focused solely on Change, its IT consulting division, which operates under the name Grand Consulting, continued to accept clients. The two divisions had always worked autonomously, so the company’s change in strategy had little impact on the consulting wing’s day-today operations. Leaving the three-employee consulting division intact also gave the company’s employees added confidence in going forward with Change. Entrepreneurs attempting a pivot often face a Catch-22, says Ries. There’s the obvious risk of putting all the eggs in one basket, but keeping two vastly different business units running at once can be detrimental to the pivot’s success. Employees, for instance, may be less committed to the new strategy if they get the impression that the company’s leaders are hesitant to make a complete break with the old one. But immediately switching over may be unfeasible for some companies. In BitMethod’s case, Shipton wanted to preserve a source of revenue so that his com-
pany would avoid having to seek outside funding. His decision to house his company’s dual functions within separate divisions is a smart approach, says Ries. “Everyone in the company needs to be clear what’s the old thing and what’s the new thing,” he says. Change went live last November. Since then, the app, which costs $79 a month, has processed more than 20,000 transactions, a modest but promising start. Some loose ends still need to be tied up, however. Shipton has not yet decided whether to formally rename the company, though he now introduces himself to potential customers as the CEO of Change. Also unclear is the future of Grand Consulting; it could be spun out into a separate company, or the consultants could take new positions within Change. “We don’t know how it will unfold, but there are lots of options,” Shipton says. BitMethod’s main priority now is making sales of Change the company’s main revenue stream. Although Change is competing against well-established companies such as Square and ShopKeep POS, Shipton remains confident. He believes the company’s previous success developing apps for other companies prepared it well to respond to restaurateurs’ and retailers’ needs. “The decision to pursue Change was a bit daunting,” he says, “but this is clearly in our wheelhouse.” —April Joyner
Before it went out of business in 1983,
Bottoms Up New Englanders welcomed Narragansett Brewing back after a 22-year absence.
4 0 | INC. | april 2013
Narragansett was the quintessential beer of New England. During its heyday in the 1950s through the 1970s, Narragansett was the official beer sponsor of the Boston Red Sox. At the start of every broadcast, longtime Red Sox announcer Curt Gowdy would greet fans with the company’s tag line, “Hi, neighbor! Have a ’Gansett.” The beer even had a memorable cameo in the movie Jaws. Mark Hellendrung, a native Rhode Islander and former president of Nantucket Nectars, had fond memories of Narragan-
sett. He also happened to be looking for a new business venture. In 2005, Hellendrung and a group of investors relaunched Narragansett Brewing, bringing back a brand that had been out of existence for more than two decades. Rohit Deshpande, a professor of marketing at Harvard Business School, says this is a perfect time to bring back old brands. Baby boomers have grown nostalgic for the brands they grew up with, while consumers of all ages have shown a willingness to pay more for products with a reputation for high quality, which legacy
courtesy company
Marketing Gone but not forgotten Finding new opportunities in reviving classic brands
hands on
Welcome Back If at first you don’t succeed…someone else might. Here’s how new ownership helped these brands find success the second time around.
Narragansett Brewing Founded: 1890 Closed: 1983 Relaunched: 2005
FROM LEFT: COURTESY COMPANY (2)
Rather than competing against the big breweries, Narragansett has found its niche among craft beer enthusiasts.
Butterfields Candy Founded: 1924 Closed: 2009 Relaunched: 2012
As its customers are now mainly adults, Butterfields’s candies are sold in gourmet and specialty shops.
brands often have. Hence the return of, for example, Lilly Pulitzer and Mini. Butterfields Candy is another regional favourite that has recently been given a new lease on life. Founded in 1924, its signature product, a hard candy called Peach Buds, was a well-loved treat throughout the South. The company abruptly closed its doors in 2009 after the owner fell ill, and the candies disappeared from store shelves. Dena Manning, the company’s new owner, is confident Butterfields can make a comeback. Last year, she bought the company out of foreclosure and put Peach Buds back in production. Acquiring an old brand does involve some legwork. If a brand has been extinct for a long time, it may require some detective work to determine exactly who maintains ownership of the brand. However, if the owner has no plans for it, then buying the rights to the brand should be a fairly straightforward negotiation. Of course, there may be other expenses to consider, such as outstanding debt or the cost of reestablishing operations. Manning ended up spending close to $200,000 to renovate Butterfields’s factory, which had fallen into disrepair. As Narragansett has revamped its brand, it has attracted a slightly different demographic than in the past. In its original incarnation, Narragansett
Mini
Founded: 1959 Closed: 2000 Relaunched: 2001
The iconic car brand announced its return with a series of innovative ads playing up the virtues of being small.
Lilly Pulitzer
Founded: 1959 Closed: 1984 Relaunched: 1993
Lilly dresses are again a must-have for the preppy socialite set, but the brand has been expanded to include bedding, menswear, and stationery.
was a mass-market beer. Today, Narragansett primarily attracts drinkers who prefer craft beers as an alternative to brands such as Budweiser and Coors. Its customers tend to be relatively young, under 45. At first, Hellendrung attempted to draw in more middle-aged, blue-collar consumers, but he soon realised that demographic was less willing to try new beers. “It’s the opposite of what we thought when we started,” he says. “The younger demographic is so much more experimental. For a party, a young guy might buy six different kinds of great beer. The older guy will buy a 30-pack of Bud Light.” That’s not surprising, according to Deshpande. For old brands to regain new life, he says, they must be relevant to contemporary customers. As a result, they may have to undergo a significant departure from their original approach. For instance, Old Spice, though not defunct, had languished until the brand was retooled to reach younger consumers. Though tweaking a long-standing brand’s identity is a significant challenge, entrepreneurs who acquire old brands often have an advantage over the brands’ previous owners, says Deshpande. “They’re not prisoners of history,” he says. “They can come up with fresh ideas and rethink what the brand could be.” Alterations may be especially neces-
sary if a brand’s reputation has taken a hit. Narragansett, for instance, suffered from the perception that the quality of its beer went down after Falstaff Brewing, the previous owner, moved production out of Rhode Island and into Indiana in 1982. When Hellendrung relaunched the company, he encountered middle-aged consumers who associated the brand with cheap quality and remembered being betrayed by the previous owners. “They really had a bad taste in their mouth, living through that experience,” he says. “That’s been the group that is most difficult to reach.” But the company’s frequent attendance at beer festivals and other events has helped combat that perception, he adds. It’s a delicate balance, however, as brands must keep some connections to their pasts to maintain authenticity. Both Narragansett and Butterfields emphasize, on their websites and in their packaging, their products’ faithfulness to their companies’ original recipes. The owners even recruited former employees to ensure that their products’ original quality would be upheld. “Our candy is still made the same way as it was in 1924, and we don’t want to change that,” says Manning. At Narragansett, Hellendrung hired the original company’s former brewmaster, Bill Anderson, to ensure the authenticity of the new beer. It seems to be working. Last year, the Brewers Association, an industry trade group, ranked Narragansett as one of the top 50 breweries in the US. —April Joyner
april 2013 | INC. | 41
hands on
COMPANY:
Elitify
Elevator Pitch Elitify offers high-end premium products for men. Will you deck out `15 crore?
FOUNDERS:
Amit Rawal and Anahat Rawal
LOCATION:
Delhi
EMPLOYEES:
20
LAUNCHED:
October 2012
Projected Turnover for 2012-13:
`9 crore
FUNDING SOUGHT:
The Pitch: “The top e-commerce companies in India are playing the mass
market game even though 30 per cent of the `15,000 crore men’s market is for luxury and high-end products. Elitify offers an online, one-stop destination to sell high-end brands like J. Crew, Club Monaco, Valentino, Marc Jacobs and Chanel for affluent and aspirational Indian men for all their lifestyle needs, whether it’s gadgets, clothes, shoes, accessories, or art. We also allow customisation of the available products at affordable prices, and offer on-call personal stylist and on-call concierge services for our Trunk Club, our group of loyal customers. With 1,00,000 visits to our website every month and the high transaction rate of `6,000 (compared to the average e-commerce transaction in India of `1,200), we have 1,500 buyers in just five months and are expecting to grow 40 times in the next fiscal year.”—As told to Sonal Khetarpal
`15 crore
Funding Sought for:
Expanding product’s depth, starting an experiential shop and building the brand. Also, to venture in new domains like women, home and kids website
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The Experts Weigh In Customisation is the key
Create A luxury Experience
With offline luxury retail stores being uneconomical across most locations, combined with increasing luxury demand outside of Tier 1 metros, the Indian luxury market is ripe to go digital. Online retailing also helps overcome the challenge of customer intimidation created by the traditional demeanour and vibe of offline luxury stores. But key challenges for the company will be defining whether the existing market size of `4,500 crore is large enough, and how the company will scale its customisation piece.
Given the transaction value and margins, Elitify should be able to create a viable business in the category. The key is going to be in designing an experience that the high-end customer feels great about; an experience which can parallel the in-store experience. Secondly, organising the supply chain for scale, and being able to meet expectations of brand owners will be the key to growth. I also believe that value in e-commerce businesses will be created when the retailer brand can be built in a differentiated manner—some of the service experiences outlined by Elitify could serve to do that.
Soumitra Sharma, senior analyst, IDG Ventures India, Bangalore
Alok Mittal, managing director Canaan Partners India, Delhi
innovate on delivery models
Elitify is addressing an interesting high value niche. The affluent Indian male has few domestic options online and the initial progress is impressive, particularly their curating of various “looks” and their success with private labels. However, the challenges of scaling e-commerce in India are primarily customer acquisition costs and a reliable delivery framework at an acceptable cost. Elitify needs to demonstrate its ability to innovate on CACs and delivery to create a sustainable unit of economic value. I believe they need to establish their differentiation on these metrics to go ahead. Gaurav Kachru, founder 5Ideas.in, Gurgaon
Photograph by subhojit paul
The Elites Will investors roll
out the red carpet for Amit and Anahat Rawal’s venture?
hands on
The way i work | Manu Kumar Jain, Jabong.com
“A little pat on the back goes a long way in boosting an employee's morale.” According to comScore, the global leader in digital business analytics, Jabong was the most visited retail website in India between the period of December 2011-2012, beating internet giants like Flipkart and Amazon. For a company that began just two years back in October 2011, reaching a base of 11.6 million users with hundred other portals vying for attention, in its first year, is quite a feat. Co-founder and MD Manu Kumar Jain says this was made possible because Jabong claims it has the largest assortment of products in the e-commerce space (about 50,000) and a logistics network that is its own. Here, Jain shares his experiences of working with the other three co-founders—Praveen Sinha, Arun Chandra Mohan and Mukul Bafana—and talks about why running a 500-plus people company requires work meetings that do not go beyond an hour.
As told to Ira Swasti | Photographs by Subhojit Paul
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hands on
Manager by Minutes Manu Kumar Jain times meetings at 45 minutes, for anything beyond that, he believes, leads to fall in productivity. april 2013  |  INC. |  4 5
hands on
I usually wake up by 7-7.30am and have bed tea with my wife. She is usually up before me. After tea, I like to spend time with her chatting and reading the newspaper together. There’s also one particular e-mail that I wait for to check on my BlackBerry or iPad before getting ready for work. This is a daily e-mail that only reaches the core team of the company and shows the previous day’s performance of our business. My wife and I have breakfast together where we both discuss important things about our days and lives. Both of us love cooking and our breakfast varies from paranthas and pancakes to idli sambhar and cereal. Once we’ve figured out our day’s schedule, we hit the road for our offices. I either drive or take the office cab to reach there. It takes me about 20 minutes. If I am being driven, I usually use that time to check other e-mails I’d have received the previous night or I make calls to my family members and catch up with them. I reach office by 9-9.30am. There are by then only a few people there as most of the team comes closer to 10am. The first thing I do when I reach office is to jot down a few things that I need to finish that day, if I already haven’t done it in the car. I either write this list in my diary or in an e-mail that I shoot to myself. I owe one of my most effective work habits—how to prioritise—to my previous job. So, once I have jotted down all the things that need to be done on a piece of paper, I get clarity about the two or three most important things that need to be pushed that particular day, even if everything else on the list has pressing deadlines. This habit also helps my team know that if there are 10 things to be done on a certain day, the two most critical ones are these that have to be closed first. The others can wait. I can broadly classify my day into four buckets. One, the time spent with the other cofounders in planning and developing the overall strategy of the company, the second is the time I spend with individual teams that I work with, third would be external agencies I keep in touch with for marketing, and the fourth are the people who are not direct partners with our company but who have interesting ideas in general and want to work with us. I would say the most fun thing about heading Jabong is working with the the kind of people we have here. At least 10 per cent of our employees come from excellent educational and professional backgrounds, be it McKinsey, Harvard, Wharton or BCG. And these are the people who challenge us on a day to day basis.
It’s something that keeps me going. Most of these hires are people the four co-founders have dug out from their personal networks or through the networks of their friends. Each of us is highly involved during the hiring process of the senior management. We also seek resumes through placement consultants but when we personally know the person and what he or she has done in the past, it works much better. In fact, that’s how the four of us found each other too—we were either friends, alumni from college, and colleagues from previous organisations that got in touch when Jabong was supposed to be launched. I think starting a business with co-founders is like being in a marriage. You need a lot of trust among each other and from that perspective, it helps a lot if you know one another from the past or are friends before you started the company. On the other hand, sometimes one may feel that you cannot criticise this person because you’re friends but that’s not the right way to go about it. It’s important for co-founders to give each other honest feedback. So, the four of us meet almost on a daily basis and we fix a time twice or thrice a week when we surface issues we might be facing in each other’s departments. We are frank enough to tell each other on our faces what’s wrong and what can be done better.
W
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hen you're an employee in someone else’s organisation, you can always go up to your boss and say, hey this is not working out, please help me out. But you don’t have that luxury when you become an entrepreneur. So if something is not working out, it’s your responsibility at the end of the day. You are accountable for everything. If there’s something that goes wrong or I need help with, that’s the time when I reach out to my co-founders for help. All of us come from different backgrounds with different strengths and weaknesses so the diversity of the knowledge pool helps a lot in finding solutions. If one of us can’t crack it, usually the other knows how to. Since half of my day goes in meeting rooms, I ensure that we limit the time of each to 30-40 minutes. If we’re doing weekly reviews, then the time may go up to an hour at the max. I tend to get very bored with long meetings. Anything longer than 45 minutes or an hour can be cumbersome and my productivity levels will plummet. There’s a book called the One Minute Manager by Ken Blanchard that I really like. It basically says that if you’re not able to do something within a minute, you’re not very efficient. So if there are long memos or long meetings, then you don’t know what you’re talking
hands on
about. That’s what I tend to believe too and have tried to imbibe that through multiple failures before they reached where they are today. in our culture. Unfortunately, I still don’t think I am able to squeeze And this is a learning that I share with my teammates too. I often tell everything into my calendar. them that out of the 100 things we do, 90 will most likely fail but the In start-ups, the speed of execution is very fast and usually new 10 things that work will work so well that it’ll be worth all the effort. roles are created as new people join the team. So when we hire So you need to keep trying because you don’t know when success people, we tell them that even though we’re giving you the overall will strike. Steve Jobs’ Stanford commencement speech in 2005 has brief of the job, you will have to get that task executed by being much also left a very deep impact on me in terms of how to think about more hands on and proactive than you’d be in a well-established life and how to maximise whatever you have. And if I think of Indicompany where all the processes are in place. Not a lot of people are comfortable with that because they get bogged down about the fact that the processes and not defined, that they have to go to five different people to ask questions and they have to execute everything themselves. Another thing that is very specific to the e-commerce industry is that people tend to change jobs very frequently without thinking of the long term. It’s something that annoys me. I prefer people who are more stable and have a long term plan in their minds and don’t go about switching jobs every few months. Another pet peeve of mine is people who don’t follow up on their deliverables because they are just procrastinating and not getting the job done. When I find someone doing that in the organisation, I usually counsel them one on one, try to understand the cause of the delay—especially if it’s the team, the boss or some personal issue the person is struggling with. But along with that, I send out a strict message that this behaviour won’t do. These counseling sessions happen over a cup of coffee or in the office meeting room, basically wherever the individual feels comfortable to open up and talk. I remember someone from my team who had a personal issue at The Personal Connection The four co-founders of Jabong found each other through their home and wasn’t able to concentrate on personal networks and that is how they now hire most of the people for their company. work. His work quality had all of a sudden gone down and stayed that way for several weeks. I sat down with him and came to know that he was feeling ans, some people that have really inspired me recently in the online homesick and wanted to go home to sort out some issues. We gave space are Deep Kalra and Naveen Tewari. I have met them for prohim three weeks off and now he’s performing like himself again. fessional reasons and they do not cease to amaze me. When people at Jabong do well in their jobs, we make sure we Normally, I try to leave office by 8-8.30pm. I find myself recognise them by either sending out memos or just verbally very productive around 8-9pm in the night when there aren’t acknowledging them in front of the whole team. A little pat on the many people in the office. A lot of times, I am only able to leave back in public goes a long way in boosting their morale. During our by 9.30-10pm and I’d be lying if I say my wife is completely okay annual function recently, we even gave out mementos to some high- with that. But since she’s also working, she understands that performing individuals who had been with us since the beginning there are some days like that. We even have a cartoon strip that of the business. goes by the name DINK couples or Double Income No Kids CouFrom the many management books I have read so far, I have ples that we co-created. I think it is loosely (read: hugely) inspired learnt that the most successful people in the world have gone by our lives!
“Starting a business with co-founders is like being in a marriage. ”
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I wish I knew then...
Ashwin Ajila, founder, iNurture Education Solutions In 2005, Ashwin Ajila left his job of over four years at KPMG, UK to fulfill his dream of becoming an entrepreneur. Hailing from an educationist family, Ajila realised that careers in animation had a bright future when he saw his own children hooked to animated television shows. iNurture Education Solutions was thus born as an institute providing university approved degree courses in animation and has today grown into a 130-people enterprise with five education verticals, 15 centres and over 13 partner universities across India. While working for KPMG, I was used to delegating a lot. And, it worked out well because chartered accountants are mostly a committed, detail-oriented lot. I thought I could apply the same principle here but one of the biggest learnings when I came to India and started a business in the education sector was that there is a lack of commitment among the people involved. In any other industry, you see partners, vendors and manufacturers working together towards a goal but in education, neither the academia nor the industry (that receives the students that graduate from these universities) wanted to work together to create courses that are beneficial for all stakeholders. Plus, degree courses in animation and special effects, mobile applications, IT security and infrastructure are emerging fields that have not become a part of mainstream education yet. So, there isn’t a large pool of senior professors to pick from. All that is available in terms of teaching talent is a cadre of young 25-35 years that is fighting the dilemma of joining the industry or becoming teachers for a lower pay. But we have learnt to tackle this issue of commitment. We hold regular training ses-
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Another lesson that we learnt the hard way was how important nomenclature is. When we launched our second vertical, we called it creative sciences. We were very confident that it was going to be successful because it had elements that no other existing media, visual communication or MBA programme had—creativity, ideation and innovation. We had spent a lot of money on content development, on bringing the faculty, and on advertising but when we launched the programme, there was absolutely no admission in the first year. We realised that students didn’t understand what the name The Name Game Naming new courses carefully is meant. A lot of non-science stua crucial lesson Ajila has learnt over the years. dents did not apply for it thinking it was a science course and when sions for the faculty before each semester some science students came for admiswhere we try to grill into them the sense of sions, they found out that it was not a sciresponsibility that comes with the teaching ence course, it was more of a media and profession. We educate them about the advertising related course. impact they can make by helping children Now that same programme is called build careers in these fields and how parcreative management and people can idenents have put everything at stake to get tify well with it. In fact, we received $8 miltheir children educated. We also have a lion funding from Ascent Capital last year. continuous appraisal system where stuThat surely indicates that our model has dents can directly report issues such as lack arrived. —As told to Ira Swasti of knowledge, commitment or poor delivery of content by the faculty to us.