Page 1

Vol 1 / Issue 03 / DEC 07


University of Michigan

N R Narayanamurthy

Chief Mentor, Infosys

Kanwal Rekhi

Chairman, TiE

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

Chairman, Sycamore Networks

Saurabh Srivastava Chairman, Indian Venture Capital Association Kiran Mazumdar Shaw

Chairman & MD, Biocon

R Gopalakrishnan

Executive Director, Tata Sons

Philip Anderson

Professor of Entrepreneurship, INSEAD

Shyam Malhotra Editor-in-Chief Krishna Kumar Group Editor ANALYSTS Arunjana Das Binesh Kutty Shilpi Kumar Sreejiraj Eluvangal Vimarsh Bajpai


You too can make it happen


OPERATIONS Ajay Dhoundiyal Product Manager VIjay Rana Design Anil John Photography SALES & MA Jaideep Mario Gabriel Chandan Sengupta Himanshu Bakshi Raghavendra Naveen Barsainya

MARKETING Associate VP West North North South South-East Asia

PRINT & CIRCULATION SERVICES NC George Associate VP T Srirengan GM, Print Services Sudhir Arora Circulation Services Manager Dipesh Kothari Reader Services Manager Pooja Bharadwaj Assistant Manager, Reader Service Sarita Sridhar Assistant Manager, Reader Service Printed and published by Pradeep Gupta. Owner, CyberMedia (India) Ltd. Printed at Rajhans Enterprises, th 134, 4 Main, Industrial Town, Rajajinagar, Bangalore 560010. Published from D-74, Panchsheel Enclave, New Delhi-17. Editor: Krishna Kumar. Distributors in India: Mirchandani & Co, Mumbai. All rights reserved. No part of this publication may be reproduced by any means without prior written permission. BANGALORE 205, 2nd Floor, # 73, Shree Complex, St.Johns Road, Tel: 41238238

Capt. G.R. Gopinath

CHENNAI 5B, 6th Floor, Gemini Parsn Apts, 599 Mount Road, Tel: 28221712 KOLKATA 307, 3rd Floor, Ballygunj A.C. Market, 46/31/1 Gariahat Road Tel: 65250117


How to get Angel funding

MUMBAI Road No 16, D 7/1 MIDC, Andheri (East) Tel: 28387271 DELHI D-74 Panchsheel Enclave Tel: 41751234 PUNE D/4 Sukhwani Park North Main Road, Koregaon Tel: 64004065 SECUNDERABAD #5,6 1st Floor, Srinath Commercial Complex, SD Road. Tel: 27841970 SINGAPORE 1, North Bridge Road, # 24-09 High Street Center Tel: +65-63369142

Triple digit Crores

PE Funds

Double digit Crores

VC Funds

CORPORATE OFFICE Cyber House, B-35, Sec 32, Gurgaon, NCR Delhi-122001. Tel: 0124-4031234, Fax: 2380694.

Few Crores



Insights from the Indian Angel Network

Few Lakhs

Angel Investors

Friends & Family




others/ No Parking! .......................................... 34 Parking lots: A Rs 5,500 cr opportunity

Hiring for startups ...................... 76 There are a number of things you can do to get the right people on board

Social Networks go local ...................... 96 entrepreneur of the month

As networking sites prove to be a major pull for internet users, a host of Indian startups are eyeing the sector

Ajay Bijli, PVR I was very keen that my company should not become a mom-and-pop operation. I should have a business that is something I enjoy, and make it scalable



Windfall profits from carbon trading Projects aimed at reducing pollution have now become revenue generators


case study/INSEAD

This case study traces the evolution of Enchanting India, and its role in providing tailor-made travel experiences to foreign tourists

unique idea of the month/ Networking for social change ............... 22 blogs/columns Philip Anderson ........ 20

Three entrepreneurs combine social networking with online job search for the benefit of unskilled workers

Anurag Batra ........... 33 Investor of the month/

Rupin Jayal................... 54


Bala Deshpande, ICICI Venture

coming soon

When approaching us, an entrepreneur should come prepared to spend time and energy and also be very honest and open with us

DARE.CO.IN interactive business models,

wiki profiles, business

graph of the day, idea

pic of

the day, sector spotlight, blogs, news, discussion fora, keyword based alerts, rss feeds, contacts,

mentoring, market trends, webinars,

newsletters, live chat,

opinion polls,

leads, slideshows,

professional guidance,

search, on demand,

archives, event calendar, research, directories, faqs


Mobile Upstream More spectrum means more bandwidth for mobile data. This in turn will lead to new avenues opening up for content companies and application developers


opportunity / Big Flora, Big Bucks ......................28 Get a green office ..........................50 The Business of Spas....................84

campus / B-schools and the spirit-deentrepreneurship ..........................92

TiE / Run-up to TES 2007 ...................104





/news Medical tourism to grow to $2 bn by 2012 Union Minister of Commerce & Industry Kamal Nath has said that medical tourism has the potential to grow into a $2 billion industry by 2012. Speaking at the 4th India Health Summit on November 14, the minister said: “Large windows of opportunities are opening up. To give just one example, Indian medical tourism was estimated at $350 million in 2006 and this has the potential to grow into a $2 billion industry by 2012”. Nath stressed on developing new infrastructure for the healthcare sector in view of the tremendous opportunities that are available for public-private partnership. He said there were five areas for government and organized industry action in the healthcare sector, i.e., to create low-cost, high-quality facilities, with a focus on underserved areas; second is to work towards creating standards for high-quality healthcare; third is to invest in training and developing healthcare manpower; fourth is to work with health insurers to improve coverage; and fifth and most important is to create public-private partnerships in healthcare. According to the joint study by CII and McKinsey on this sector, Nath said: “During the 1990s, Indian healthcare grew at a compound annual rate of 16%. Today the total value of the sector is more than $34 billion. This translates to $34 per capita, or roughly 6% of GDP. By 2012, India’s healthcare sector is projected to grow to nearly $40 billion”.

FDI proposals worth Rs 500 cr cleared Finance Minister P Chidambaram has approved 22 Foreign Direct Investment (FDI) proposals worth Rs 511 crore, recommended by the Foreign Investment Promotion Board. The proposals are related to various ministries including Commerce, Food Processing Industries, and Information and Broadcasting. Some of the important proposals approved include the Rs 155.74 crore proposal of PTC India Financial Services for induction of foreign equity by Goldman Sachs and Macqarie.

Revised guidelines for recognition of tour agents The Ministry of Tourism has said that initial recognition for all categories of travel trade viz., tour operators, travel agents, tourist transport operators, domestic tour operators & adventure tour operators shall now be given at the Headquarters for a period of five years instead of three years as was given earlier. This is based on the inspection report / recommendation of a Committee comprising of Regional Director concerned and a member of TAAI / IATO, etc. 8 DECEMBER 2007


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Govt for more pvt investment in renewable energy

Production by SSIs to grow 12.6% in 2006-07

The government is encouraging private investment in renewable energy sector through a mix of fiscal and financial incentives that include capital/ interest subsidy, accelerated depreciation, nil/ concessional excise and customs duties, Minister of State in the Ministry of New and Renewable Sources, Vilas Muttemwar has said. Further, as applicable to all new infrastructure projects, profits earned from sale of renewable power are exempt from Income Tax for any 10 years out of the first 15 years of project’s operation. This apart, preferential tariff for grid interactive renewable power is being given in most potential states. An amount of Rs 1,100 crore has been proposed to support Research and Development on different aspects of new and renewable energy technologies during 11th Plan period.

Based on the revised Index of Industrial Production for the Small Scale Industries (SSIs) sector, with base year 2001-02, the rate of growth of production of SSIs in the country during 2004-05, 2005-06,and 2006-07 (projected) have been 10.9%, 12.3% and 12.6% respectively. To assist the States/UTs and supplement their efforts in this regard, the Central Government implements several schemes/ programs for promotion and development of SSIs. These include facilitating availability of credit mainly through public sector banks/institutions, assistance for (a) technology upgradation, (b) marketing,(c) integrated infrastructural development,(d) comprehensive need-based development of clusters, and (iii) entrepreneurship development.

MSME growth rate higher than industrial sector

India needs more entrepreneurs to meet the challenge ahead and to take on China, Essar Group Chairman Sashi Ruia has said at the Indian Institute of Management, Ahmedabad. Even if “eight to ten” of those who graduated from the IIMs would take on the challenge, it would do the country good, he said. “Both Indians and Chinese are known for their entrepreneurship. However, the Chinese are ahead of India in producing steel, cement, cars, infrastructure and other areas,” Ruia said.

The annual growth rate of Micro, Small & Medium Enterprises has so far been consistently higher than that of the country’s industrial sector as a whole and their share in national exports is about 33%. The number of MSME has grown from 109 lakh in 2002-03 to 128 lakh in 200607 and their production has increased from Rs 3,14,850 crore to Rs 5,87,196 crore. The government supports MSMEs through assistance for technological upgrade, accessing markets, improved infrastructure and better availability of credit.

Cabinet nod to export promotion scheme The Cabinet Committee on Economic Affairs has gave its approval for implementation of a Centrally Sponsored Scheme on Marketing and Export Promotion during the 11th Five-year Plan period with an outlay of Rs 230 crore. The scheme will have two components: (i) Marketing Promotion and (ii) Handlooms Export Promotion. Out of Rs 230 crore, Rs 205 crore has been earmarked for marketing promotion component and the balance Rs 25 crore will be for handlooms export promotion. It is expected that the marketing promotion component will benefit more than 27 lakh handloom weavers increase their sales of products in the domestic market.

World Bank to provide $944 million support India has signed three loan/credit agreements with the World Bank amounting to $944 million. The agreements are aimed at strengthening the Rural Credit Cooperatives Project for $600 million loan and credit; India Vocational Education Training Project for $280 million credit; and additional financing for the Karnataka Community Based Tank Management Project for $64 million loan and credit. 10 DECEMBER 2007

India needs entrepreneurs to take on China

PVR to tap high-end consumers PVR (Priya Village Roadshow) has come out with a new offering – PVR Premier, which is targeted at high-end urban consumers in the metros, with premium offerings such as leather upholstered fully reclining seats and unparalleled legroom in two Gold Class and four Premier Class auditoria. With an investment of Rs 24 crore, the first PVR Premier theatre was launched recently in New Delhi.

225 TV channels allowed uplinking The Ministry of Information & Broadcasting has permitted 149 news & current affairs TV channels and 106 non-news & current affairs TV channels to uplink from India, as on November 15, 2007. Five TV channels, uplinked from abroad, have also been permitted to downlink in India. In addition to this, 52 TV channels, uplinked from abroad, have been provisionally permitted to downlink in India. The permissions are for operation on an all-India basis and are not State-wise. Out of the total 255 channels permitted to uplink from India, 123 channels have Indian ownership whereas 132 have varying components of foreign equity in the parent company.

Feedback DARE.CO.IN

I need to confess that the entrepreneur in me was lying dormant till I picked up the first issue of DARE at the Indian Magazine Congress last month. Here was a magazine which actually provoked you to take up the challenge. It made my decision of giving up a cushy and, as some people say, high profile job so much easier. The entrepreneur in me has woken up now and I must tell you in all humility that DARE has contributed to this decision in some way. In a way which really can't be measured, but it certainly took away the ifs and buts in my thought process. It has been a long but satisfying 11 years at Zee, the company which has made me what I am today. I seek your blessings as I dare to be different and dare to take the plunge I have been so much waiting for. Samir Ahluwalia, Editor, Zee Business I have seen your statement: Solid waste management can fetch good revenue. I am working in the water, sanitation and solid waste management (SWM) sector for the last 30 years. My organization has done a study on the situation of SWM in Kerala on behalf of the World Bank. But the situation is quite pathetic. There are lobbies who are against SWM activities. These are dominated by politicians and businessmen. I would like to see the work on SWM being done by municipal corporations in India, preferably in south India. Dr K Balachandra Kurup Executive Director & Chief Executive Socio Economic Unit Foundation, Trivandrum Congratulations for giving a very good magazine-cum-guide for aspiring entrepreneurs and those in the startup stage of their business. It provides tips and inspirational features that give its readers a framework for success. Vivek Dharia CIO, KNP Sec Ltd

Thank you very much for sending me the first issue of your magazine, which I found quite interesting. I have also received the next issue. I would like to subscribe the same. Kindly let me know the subscription payable. Dr R Lakshmipathy Publisher, DINAMALAR

Can the next Google come out of India? Hyperbole aside, what are the real challenges of building successful and scalable technology startups in India? Aparna, a graduate student at MIT/Sloan, is doing a research project investigating these issues. As part of her project, she is looking to interview entrepreneurs and India-focused early-stage investors for their perspectives. From an entrepreneur’s view, some of the issues she is exploring are -- hiring the early team, business models that have worked or not, nature of external mentors and advisers, importance of access to US entrepreneurs etc. From an investor’s view, issues she is exploring are -- deal-flow challenges, relationships with incubators / angels / seed funds, ownership stake dynamics, nature and extent of portfolio company support. To learn further or participate in the project, please write to her at Your subscription page does not look professional at all. India has been spelled incorrectly. Please amend that. As I am a designer, I cannot overlook these mistakes. Anyhow, I will subscribe soon. Sunny Kapoor The Entrepreneurs Club is a notfor-profit organization and registered as a trust. It is the brain child of three first generation entrepreneurs.

Within them, the club has the experience and wisdom of more than five decades of conception and execution of organic growth. The club has the sole motto of elevating SMEs in their quest for sustenance and growth. Please visit our website, which will provide more information about us. Every month we conduct program for the SME called inTECgrate with two topics. Please find enclosed the invite for the same. I have read your DARE magazine and it is really interesting and informative and that made me visit your Chennai office. K Gangadharan, Founder Trustee, The Entrepreneurs Club, Chennai

Via SMS - DARE 56677 The organic farming and the VC funding articles made an interesting reading and the interview with Biocon lady was amazing... Thanks Bal Govind Hey ur magazine rocks ..its a informative ..attractive..n a sensible magazine with easy to understand language...good.. Deepa Kudos to the Cyber Media team for bringing out an excellent mag for aspiring young entrepreneurs like me. wish you all the best. Anish Achuthan The article on VC is a real eye opener. DARE should become a platform for exchange of entreprenurial spirit. Thumbs up DARE. Gaurav I am an entrepreneur and the latest issue rekindled the fire in my belly and i have dared to think BIG. BG Sreedhhar

DECEMBER 2007 11



Our Performance Report The biggest impact we hoped to have was to influence people’s decisions on business. I am proud to report that it has started to happen.


hree months down the line, we thought that like any other venture, we should take stock of where we have reached. When we started,

we set two goals for ourselves. One was, of course, the business plan. The other was what in my first editorial, I called “ a simple yardstick of success”. I had said: “If even one entrepreneur will be able to say that what we have carried, what we have done, has made him think differently, has made a positive difference to his business ambitions, then we have achieved our objective” As you turn the pages, do stop for a minute at feedback, where we carry your responses to our articles. There you will find evidence that we have made a small but significant step towards achieving this objective. That leaves the business plan. Suffice to say that at

this point, we are ever so slightly ahead of the plan, both in terms of number of copies and finances. Another impact we have had, which we did not quite expect, has been what I call the WOW- I – didnot- know- that reaction. This has been the reaction to our opportunity stories. For example, when we said that downstream opportunities from corporate aircraft was Rs 1,500 crore a year or that collecting and processing household wastes was a Rs 6,000 crore a year opportunity, the uniform reaction, even from established businesses has been the same – WoW, I did not know that! Thank you for the wonderful support you have given us in getting going and I am sure that your support and best wishes will be with us as we go forward.

/Krishna Kumar

DECEMBER 2007 13



Windfall proďŹ ts from carbon trading Projects aimed at reducing pollution and mitigating climate change are no longer mere investments for a good cause. They have become revenue generators, thanks to the Kyoto Protocol, an agreement by world governments to limit dangerous emissions /Vimarsh Bajpai

CDM Project Stages 2. Preparation of project documentation applying an approved methodology for calculating emission reductions (Project Design Document) 1. Project identiďŹ cation



4. Host country approval

3. Validation of project documentation by environmental an auditor accredited by Clean Development Mechanism Executive Board (CDMEB)




RF, a refrigerant producer, took up a project in 2005 to reduce the emission of HFC-23, a greenhouse gas (GHG) generated as a byproduct at its factory in Bhiwadi, Rajasthan. This effort reduced the emission of 3.8 million tons of GHG every year. Good show, right? But what happened next is more of interest to us. The company traded this reduction at Euro 10 a ton of emission saved or per CER (Carbon Emission Reduction) units, earning $53.2 million a year! At the other end of the spectrum, Karnataka-based NGO SKG Sangha has set up biogas and vermi-compost plants for 10,000 rural families in the state. This reduces carbon dioxide (CO2) emissions substantially. The NGO sells these emission savings as Voluntary Emission Reduction (VER) units directly to international buyers and not through regulatory mechanisms, thus raising money for its programs. Welcome to the world of carbon trading, where otherwise non-remu-

nerative projects aimed at reducing pollution, specifically carbon dioxide and other greenhouse gases, become money-spinners. Both SRF and SKG Sangha are among the hundreds of beneficiaries of the carbon trading business that Frost and Sullivan estimates to be worth $52 billion this year, and to touch $100 billion by 2010. Developing countries such as India are tapping the benefits of this market both through the highly regulated Clean Development Mechanism (CDM) or a more informal voluntary market. The era of debate whether climate change is for real or not has drawn to an end and the fight to save environment has achieved a critical mass. This year’s Nobel Peace Prize, jointly shared by climate change activist and former US Vice President Al Gore and the Intergovernmental Panel on Climate Change (IPCC), has only underscored the need to contain global warming, which if left unchecked, could cause the biggest catastrophe mankind has ever witnessed.

Opportunity: Reducing Emissions “The Clean Development Mechanism is a voluntary activity to reduce green house gas emissions and everyone is eligible whether it is a big corporate, an NGO or an individual. You become eligible if the project meets the CDM eligibility criteria,” says CDM expert Dhirendra Kumar, Group Coordinator, Winrock International. Bharti Gupta Ra mola, Executive Di rector at PricewaterhouseCoopers feels that “early success in the CDM market has brought such projects within the investment decision-making process in a large number of medium and large corporations.” While for Indian companies, carbon trade has opened up a new revenue stream, for NGOs, this has become a means for making grass-root level projects self-sustaining in the long run. “We want money to implement programs for poor rural women, and carbon trade has helped bring in funds," says D Vidya Sagar, President, SKG Sangha.

Carbon Trading in a Nutshell This is a unique trading system agreed upon by more than 170 countries in a bid to save our environment from further degradation. It is based on the premise that those who continue to pollute the environment should pay for their sins to those who make efforts to save it. If you undertake a project to reduce pollution levels, you become eligible for selling the amount of greenhouse gas emissions saved as carbon credits. One credit equals to one ton of CO2 emission saved. Carbon credits are traded in the international market. Credits earned through the Clean Development Mechanism are called Carbon Emission Reduction (CER) units. The process requires approval of the host country and registration with the UN Executive Board. The CDM is time consuming and expensive compared to another process which generates Voluntary Emission Reduction (VER) units. VERs are tradable at climate exchanges like the Chicago Climate Exchange or sold directly to end buyers. VERs have a much lower market value than CERs. Payments in the carbon market are made in the form of cash, equity, debt, convertible debt or warrants. Some parties pay in-kind, providing technologies to curb emissions.

7. Verification of generated emission reductions by an accredited verifier 5. Acceptance of project by the CDMEB (Registration) 6. Project implementation, monitoring and reporting

8. Acceptance of verified emission reductions and issuance of credits by the CDMEB (Certification and Issuance)

9. End of contract period (May be post-2012)

DECEMBER 2007 15

DARE.CO.IN The Kyoto Protocol At the heart of the carbon trading market lies the Kyoto Protocol. On December 1, 1997 more than 160 nations met in Kyoto, Japan, to negotiate limitations on emission of greenhouse gases for developed nations, as part of the multi-nation treaty – the United Nations Framework Convention on Climate Change (UNFCCC). The outcome of the discussions was the Kyoto Protocol, which came into force on February 16, 2005. The Protocol, ratified by more than 170 countries, is a legally-binding agreement under which industrialized countries have agreed to reduce their collective GHG emissions to a level that is 5.2% below their 1990 emission levels in the commitment period 2008-12. However, the US is yet to ratify the Protocol.

The Different Markets The carbon market is based on three mechanisms under the Kyoto Protocol: Emissions Trading, Joint Implementation and Clean Development Mechanism. These mechanisms are aimed at rewarding those who reduce emissions or remove carbon from the atmosphere at the cost of those who add GHG. While Emissions Trading and Joint Implementation are of concern to developed countries, Clean Development Mechanism is of particular interest to developing countries such as India. Emissions trading or the allowance market is a trading system wherein

opportunity/environment DARE/carbon market 2005 Volume (MtCO2e)*

Value ($million)

Volume (MtCO2e)

Value ($million)

Allowances Market EU-ETS New South Wales Chicago Climate Exchange UK-ETS Sub Total

321 6 1 0 328

7,908 59 3 1 7,971

1,101 20 10 NA 1,131

24,357 225 38 NA 24,620

Project-based Transactions Primary CDM Secondary CDM Joint Implementation Other Compliance Sub Total

341 10 11 20 382

2,417 221 68 187 2,893

450 25 16 17 508

4,813 444 141 79 5,477






Source: World Bank's State and Trends of Carbon Market 2007

* Metric ton of CO2 equivalent

developed countries or transition economies purchase carbon credits from other developed countries or transition economies to meet their GHG reduction targets. This has led to the development of the European Union Emission Trading Scheme (EU ETS), which is the largest sub-set of the carbon market. According to the World Bank’s State and Trends of the Carbon Market 2007 report, under the EU ETS, 1,101 tons of carbon dioxide equivalent was traded in 2006 with the allowance market valued at $24,357 million. Joint Implementation (JI) involves project-based transactions wherein an emitter in a developed country buys carbon credits by implementing a GHG reduction project in another developed country. In 2006, this market was valued at $141 million.

The Greenhouse Effect and Global Warming Climate change, including the increase in global temperatures and the erratic pattern of climatic behavior, is being attributed to the enhancement of the greenhouse effect. Certain naturally occurring gases such as CO2 trap the sun’s heat to keep the earth warm and habitable. They are called greenhouse gases (GHG) and the process of heat entrapment is the greenhouse effect. Major GHG are Carbon dioxide, Methane, Nitrous Oxide, Hydroflurocarbons, Perflurocarbons and Sulphur Hexafluoride. However, over the last 100 years, large-scale industrial development involving burning of fossil fuel such as coal and petroleum products coupled with excessive deforestation has raised the level of GHG in earth’s atmosphere. This has led to the rise in earth’s average temperature (global warming) causing dramatic climate changes such as melting of glaciers, rise in sea levels, frequent hurricane activity, and prolonged droughts and floods. 16 DECEMBER 2007


Clean Development Mechanism The clean development mechanism (CDM) provides for developed countries to pay for the implementation of emission reduction projects in developing countries. “CDM is a highly regulated process and involves a number of steps including initial evaluation, preparation of a project design document (PDD), validation and verification, host country approval and registration with the UNFCCC,” says Meenakshi Jain, Director, PositiveClimatecare, a CDM consultancy. Gujarat Fluorochemicals was the first from India to register a CDM project at the UNFCCC in 2005. Indian companies have come a long way since then. Some of the majors include GMR Industries, JSW Steel, Tata Sponge Iron and Grasim Industries. For CER trading, one can opt for either a fixed crediting period or a renewable crediting period. In case of fixed crediting, you will get CER credits for 10 years and after that your project might be operational but you will not receive CER benefits. In the case of renewable crediting period, you will get the CER credits for 7 years and after that you can renew your crediting period by two more times. “This means for a total of 21 years, you can avail CDM benefits. However, for availing CER benefits in each of the renewable periods, your project baseline need to be revisited,” adds Kumar.




hat is the reason behind the increasing participation of Indian companies in carbon trade (CDM and the voluntary market)? Is it just money or more than that? The possibility of additional revenue stream through CDM has played a significant role in making corporations look more closely at investments in low carbon technologies. We must however salute the spirit of Indian entrepreneurs who went ahead with potential projects long before Kyoto Protocol was ratified and have maintained their faith in the carbon market despite facing hurdles. Extensive capacity building (including identification of project opportunities, technology, CDM financing sources, etc.) done by the Indian national CDM authority, CDM service providers, CDM financing agencies and CDM champions within the organisations, particularly in the case of large organisations is another facilitating factor.

How are Indian companies benefiting from the voluntary carbon market? Indian companies are using the additional opportunity provided by the voluntary marEXECUTIVE DIRECTOR, kets mainly in two ways: PRICEWATERHOUSECOOPERS There are a large number of “early start” projects which have missed the UNFCCC deadline for retroactive claim of CERs. Once these projects are registered with the CDM Executive Board, they receive CERs from after the date of registration. For the period prior to registration, the emission reductions (once verified) are traded in the voluntary carbon markets. For a voluntary buyer, these represent good quality emission reductions as these arise from registered CDM projects. There are various small scale emission reduction projects, which due to higher pre-registration expenditure and the long lead time associated with the regulatory process, cannot afford to go through the CDM process. These projects therefore look at voluntary market. There are also cases where UNFCCC approved methodologies are not available, but the identified projects have GHG reduction potential and these then choose to sell in the voluntary carbon market.


Is the future of the voluntary carbon market brighter than that of the CDM, which is a highly regulated and expensive process? Reduction in carbon footprint is a global initiative and is here to stay. The voluntary carbon market can be considered as an additional opportunity for GHG reduction. The voluntary carbon markets, which were in nascent stages until last year have now started showing signs of development because of the growing interest from both buyer and seller sides. It is true that the long and expensive CDM process may force project implementers/investors to look at the voluntary carbon market route. But this should not be seen as a comparison between the compliance and the voluntary market. The growth and robustness of the voluntary carbon market will be inextricably linked to that of the compliance carbon market. If anything, the voluntary carbon market will supplement the compliance carbon markets but will continue to derive its depth (and systems and procedures) from the compliance carbon markets. How can an entrepreneur benefit from carbon trade? The scope of carbon trading is very much defined in the Kyoto protocol, wherein any activity carried out by the investor results in GHG emission reduction beyond the business as usual scenario or the prevailing practices in the market is eligible for CDM due diligence and registration. Out of the six identified GHGs in the protocol, carbon dioxide is the most common one and is generated in almost all the industries which consume energy in one form or the other and thus energy efficiency and process change is one of the most common type of projects which can be taken up for GHG reduction. In addition to this, switching over to alternate fuels and cleaner technologies can also result in GHG emission reductions. With new trading avenues opening up, it is always possible to trade the emission reductions in voluntary markets if not in compliance markets under the Kyoto Protocol. Tough methodologies for verification of the projects have been a dampener in getting more projects registered for CERs. “Methodologies for some projects such as those related to afforestation are so rigorous that only one such project, in China, has so far been registered for carbon credits,” says Ashutosh Pandey, Practice Head, Emergent Ventures, a CDM consultancy firm. “There are also cases where the UNFCCC approved methodologies are not available, but if the projects have

GHG reduction potential, they can choose to sell in the voluntary carbon market,” adds Ramola. Asia dominates the seller side of the market while a majority of buyers are based out of Europe and Japan. As of November 8, 2007, a total number of 844 projects have been registered with the UNFCCC, out of which India led the pack with 288 projects, followed by China and Brazil. But despite having the maximum number of projects registered under the CDM, India lags

behind China on the number of carbon credits issued to it. “This is because most of the projects in China curb emissions of HFC, which is a more potent gas compared to CO2. This fetches more CERs,” says Pandey. According to the World Bank report on State and Trends of Carbon market, in 2006, China dominated the CDM market on the supply side with a 61% market share of volumes transacted, down slightly from 73% in 2005. Next was India at 12%, recovering from 3% in 2005. DECEMBER 2007 17



World-wide share of CDM projects

Total Number of Projects: 844, as on November 8, 2007 Source: United Nations Framework Convention on Climate Change

Asia as a whole led with an 80% market share. Renewable energy projects rule the roost in India, followed by those relating to waste management. Chetan Agarwal of Winrock International, says “Community and bio-diversity projects have a bright future and entrepreneurs can make the most of it.” The average price of a CER during 2006 & 07 was Euro 10-15.

Voluntary Market High cost of development of a CDM project and also the rigorous regulations have led to a swift growth of the voluntary market for trading of carbon credits. “We found the CDM process expensive and cumbersome and therefore decided to directly trade our carbon credits in the international market,” say Vidya Sagar. For voluntary markets, carbon credits are called voluntary emission reduction (VER) units. “For getting the VERs you need not undertake the registration, verification and certification, as in the case of CDM projects. The initial steps are pre-

requisite (such as development of project report) and it will be based on the VER buyers’ decisions and priority and not as per the Kyoto Protocol requirements,” clarifies Kumar. “At the broadest level, the voluntary carbon markets can be divided into two main segments: the voluntary, but legally binding, cap-and-trade system that is the Chicago Climate Exchange (CCX); and the broader, non-binding, over the counter (OTC) offset market,” according to a report on the state of voluntary market by New Carbon Finance. The report estimates that in 2006, the global voluntary market was worth $91 million. Out of this, the OTC market was worth $54.9 million. The price of a VER varies considerably, and is usually 25-50% of CER value at any point of time.

Consultancy Business With more and more companies jumping into the carbon trading bandwagon, it is festival time for CDM consultancy business. As the process is a rigorous one and highly compli-

RICHARD SANDOR, FATHER OF CARBON TRADING The business of carbon trading has an entrepreneurial tinge. Thanks to Richard Sandor, who pioneered the idea of market-based solution to environmental problems. This research professor at the Kellogg Graduate School of Management at Northwestern University, USA, founded the Chicago Climate Exchange (CCX), which is a self-regulatory exchange that administers the world’s first and North America’s only multi-national and multisector marketplace for trading greenhouse gas emissions. 18 DECEMBER 2007

cated, most companies are looking for facilitators, who can act as links between sellers and buyers. Right from developing the initial project report to brokering a deal between the project developer and the buyer, consultancy business is booming in a big way. With the sharp increase in the number of consultancies in the last few years, the fee has gone down significantly. However, the volume of CDM business has grown manifold. Consulting fee may vary between Rs 2-5 lakh for developing the initial project report. A lot depends on the size of the project. Complex projects with difficult methodologies can fetch even more money. Most consulting firms charge a certain percentage of the CER revenue once the project becomes viable.

Beyond 2012? Despite the big size of the carbon market and even bigger projections, the future is shrouded in uncertainty. This is because the first Kyoto Protocol period will end in 2012. This is the very reason that most deals are limited only up to 2012. The US and Australia are yet to ratify the Kyoto Protocol. The US has asked China and India also to undertake emission cuts. This is a big bone of contention as the developing countries are unlikely to give in. However, the World Bank, which is a major facilitator in the carbon credit market, recently launched a new carbon fund – the Carbon Partnership Facility (CPF), which will purchase emissions reductions for at least 10 years beyond 2012. “The CPF is our specific response to the continued carbon market uncertainty post-2012, and will become operational when purchase commitments reach $500 million and similar sales commitments have been made. It is designed to be regime-neutral, as its objectives are to promote a shift towards investments in long-term, low-carbon technologies where otherwise greenhouse gas emissions would be locked in for decades to come,” says Charles Cormier, Team Leader, Environment and Water Resources, DAR E World Bank.

KNOWLEDGE 25 years ago, India’s first IT magazine, Dataquest, was born. And that started CyberMedia’s journey as a specialty media house dedicated to the knowledge industries. Our 15 publications, 12 websites, 100+ events, weekly TV programs, market research and media services are a testament to that. As India moves on its journey to become the knowledge capital of the world, CyberMedia will be at the forefront. Catalyzing the knowledge industries.



Manage your team’s relationship network Winning teams share a clear vision of what their business is all about /Philip Anderson


n entrepreneurial team needs a lot of resources to launch a successful business—money, ideas, employees, infrastructure, customers and so on. Most of these are acquired with the help of other people, so perhaps the most important resource on which all others depend is your human relationships. Who will help you? Who will make introductions for you? Who will share with you useful information that you didn’t already know? Answers to questions like this help you figure out how much social capital you can use in order to grow your enterprise. Few of us start businesses alone, so what matters is the total social capital of a venture’s top management team. INSEAD entrepreneurship professor, Bala Vissa, has spent years studying how successful teams use their social networks to leverage a young business, mostly using data gathered in India. In this month’s column I will share his key findings with you and his advice on how to get the most out of your team’s web of social connections. Professor Vissa started off asking under what conditions a team’s networks were, as a whole, worth more than the sum of the individual networks. To address this question, he studied 85 top management teams of young software companies from various regions in India, identified with the help of NASSCOM and The Indus Entrepreneurs (TIE). He focused on one industry at first, because the way people network often depends on the nature of the industry they occupy. Professor Vissa was somewhat surprised to find that different teams had very different patterns of social ties. In many teams, all the members were connected only to people who were very similar to themselves in terms of age, occupation, and social background. This is not uncommon, he says, because people tend to be most comfortable getting to know others who are like themselves. But the teams with the highest revenue growth were different: their members reached out to a very diverse web of people, many of whom were quite different from anyone on the team. Professor Vissa’s first lesson for entrepreneurs: make the effort to build relationships with people who aren’t like you or anyone else in your venture’s top management. Look for people 20 DECEMBER 2007

who are different in terms of age, area of expertise, and geographic location, and get to know people at companies with different positions in the supply chain, e.g. vendors, partners and customers. Delving more deeply, he found that the teams who made the most effective use of their networks shared one thing in common: they shared a clear vision of what their business was all about and what were their key priorities going forward. That helped them agree on who to connect with, what data to share with outsiders, and what was worth learning from them. If each member of the management team explains in a different way to outsiders what the company does and what kind of help or information it needs, the team ends up with jigsaw puzzle pieces that don’t fit together into a bigger picture. Only when they agree on their future direction and what kind of business they want to become can they pool ideas from many different sources and derive sensible insights. If they don’t agree, then data from different sources conflict too much, creating confusion. Is camaraderie and esprit de corps a good thing for a venture team to build up? Professor Vissa’s research suggests that the answer is “maybe.” If a team contains a complete set of skills, such cohesion helps them get more from their relationships. But when there isn’t much diverse expertise in a team—for example, when everyone on the team has a technical background—they all tend to reach out to the same set of people. It’s easy to build cohesion in such cases, but different team members tend to keep reaching out to the same people, hearing the same stories, and reaching the same conclusions. They end up in too much of a comfort zone and never seem to build the diverse set of relationships they need in order to be exposed to new ideas, new people, and new opportunities. Instead, the same advice and the same information keeps re-circulating, and people fool themselves into believing that what they are learning from the outside world is consistent and logical, when actually it only seems coherent because it comes from a narrow range of sources. Diverse teams tend to have diverse social networks, but they also tend to have more conflict because different people have different points of view, steeped in their different functional backgrounds. That’s why the best entrepreneurial teams combine people who have dissimilar expertise and backgrounds, but who pull together because


blogs/INSEAD they are truly committed in spirit to one another and to their shared enterprise. Professor Vissa then turned to examining how successful entrepreneurial team members manage to build useful networks. Even if you know that you should build a diverse set of relationships, it’s not clear how to do it or why some people are better than others at creating effective social relationships. In-depth interviews suggested that most people adopt one of two different networking styles: relational and transactional. Entrepreneurs who have a relational style typically reach out to a lot of new people and find out a lot about the new people they meet, because they are interested in establishing a relationship. They are very good at converting professional relationships to personal relationships, and they are also very good at culling relationships, reducing their investment of time and energy in connections that are not mutually beneficial. Those who have a relational style make a point of staying in touch with their contacts periodically, whether or not they need anything specific, to see what is new and to refresh the connection. Entrepreneurs who have a transactional style differ in every one of these aspects. They typically reach out to a much smaller number of new people, preferring to spend time with those already familiar to them. They typically don’t find out very much about new people they meet, because they are focused on learning how those people can be useful to them. They tend to keep professional and personal relationships separate, and seldom thin down the number of ties they are maintaining. They typically get in touch with the people they know only when they have a specific reason to do so. Because these two styles are so different, they affect the way entrepreneurs search for new customers, partners, vendors, or investors. When members of an entrepreneurial team have a transactional style, they gain new customers or alliance partners by relying heavily on referrals from people they know. In contrast, people with a relational style are much more willing and able to strike up relationships when they encounter strangers. They have learned over time to be confident in their success forming new relation-

ships, so referrals are less important to them. Understanding your own style and that of your partners in an entrepreneurial venture as well as the style of people you encounter, is key to ensuring that a team ends up with a diverse and helpful web of social ties, Professor Vissa suggests. What should you do to get the most out of your team’s network? INSEAD’s Vissa offers four concrete pieces of advice. 1. Reach out to people who have similar (or better) experiences and accomplishments as you, not people who have the same social background you have. Networking with other successful entrepreneurs as opposed to other people from the same region that you hail from, usually produces better results. 2. Use a long time horizon; make sure you stay in touch with people whose help you might not need until well in the future. Don’t drop out of touch with people just because you don’t need their assistance or advice in the next 90 days. 3. Reach out to people who are both younger and older than you. Most people spend the great majority of their time with others who are about the same age. Older people are sources of sound advice while younger people are more attuned to what’s new and are better sources of really novel ideas. 4. Finally, delegate enough of your operational tasks so you have time to reach out to new people to develop your business. Remember, your personal network today will likely become your venture’s network six months down the road. When an entrepreneurial team comes together to grow a business, it’s easy to spend so much time thinking about products, markets, competitors, financing, and other concerns that one neglects the resource that underpins all other resources: people. It’s a good idea to assess how the networks of your team members overlap so that you can get more resources from your overall web of connections than you would if every member of your team pursued the same DAR E relationships using the same style. INSEAD Alumni Fund Professor of Entrepreneurship, Director, Rudolf and Valeria Maag International Center for Entrepreneurship and Director, 3i Venturelab

SMS “DARE <your comments, questions or suggestions>” to

56677 DECEMBER 2007 21


/unique idea of the month

Netwoking for social change Three entrepreneurs combine social networking with online job search for the benefit of unskilled workers /Sreejiraj Eluvangal


ean Blagsvedt was working at Microsoft’s Research Labs in Bangalore two years ago when he came across a research paper by professor Anirudh Krishna of the Duke University on the causes of poverty and its alleviation. Having moved to India when Microsoft was setting up the Lab in 2003, Sean’s job at the time consisted of communicating the ideas put out by the Ph.D researchers at the Labs to the company’s product team for implementation. But it was Krishna’s paper that left the deepest impression on Sean. “I came to India because the move offered the chance to set up an organization from scratch, with a great charter: to build applications for poor people,” says this 31-year-old from Oakland in the US. While Sean did figure out ways to convert some of the work done by the researchers at the labs into actual products, it was Krishna’s ideas that, after a year-and-a-half, led him to quit his job and start his own venture - Started three months ago, babajob offers users the opportunity to find a new cook, gardener, driver, nanny, maid, office boy etc. from the comfort of their home. While mainstream sites like and monster. com cater to the educated workforce, babajob tries to bring the benefits of the internet to the “sub 10k” job-market. “Nobody was paying attention to the market because the prospective employees - maids, drivers, gardeners - did not have access to computers and the internet and could not register themselves online,” Sean points out. “Yet, this was a huge under-served market... (it is) nearly 50% of the job market?” he wonders. While the opportunity and the associated problem was obvious, Sean,



who always had a thing for “mass”, scalable ideas, had got a valuable insight from Krishna’s research paper. The paper was based on a four-monthlong study of people falling into and getting out of poverty in 35 villages in Rajasthan and put out a set of conclusions on how people, given the right environment, emerged out of poverty by themselves. “The study basically said that the key to rising out of poverty was diversification... that one of the members of the family had got a job, usually in a city. And the information about these jobs came through connections - you got a job because you knew someone who knew someone who knew of the job.. “ he explains. It is this insight which forms the core idea of babajob. In its revenue

IRA WEISE, MD Ira has founded a variety of companies as an experienced entrepreneur over the last 25 years, including 800-Software, one of the US’s first mail order software companies, and the first to offer free technical support and toll free order lines.

VIBHORE GOYAL, CTO Prior to, Vibhore worked as a developer for Microsoft Research India on a variety of projects. Vibhore’s areas of interest include Security & Networking and he holds a B. Tech. + M. Tech. in Electrical Engg. from IIT Bombay. model, babajob too is based on the principle of the recruiter paying, while the job-seeker gets a free listing, like the other job portals. However, unlike the mainstream recruitment sites, babajob could not expects its prospective job-seekers -- maids, drivers and gardeners -- to fill out forms and sign up on the net. “On the one hand, information about job opportunities was crucial for these people, yet they could not be brought into the net because of problems like access to PCs, low literacy levels etc.,” points out Sean. It was then that Sean, along with Vibhore Goyal, a 26-year-old programmer from the Labs who joined him in the venture, decided to use one of the most widespread phenomena online, social networking, to solve the problem.


/unique idea of the month

SEAN BLAGSVEDT, CEO Prior to founding Babajob, Sean spent 8 years at Microsoft, interning in 1996 and 1997 and joining full-time in 1999 in the OfďŹ ce group in Redmond as a Program Manager. In 2002, Sean moved to the Windows Vista User Experience team, designing the Messenger experience in Vista and how the OS represents people. Finally, in fall 2004, Sean moved to Bangalore as the 3rd founding member of the Microsoft Research India, focusing on novel approaches to technology in emerging markets and new strategies in the mobile phone space. DECEMBER 2007 23

DARE.CO.IN “We realized that tying it up around a social networking site would give us two advantages,” says Sean, “One was that all the members of the network could act as the last mile access for the less privileged job-seekers to the internet, suggesting them and filling in their forms. Second is that it also solved another problem - that of trust. When it comes to household workers, people tend to prefer employ someone recommended by someone within their friends-circle. So, social networking plus employee recommendation tied in very well,” he says. So Sean, along with Vibhore, built a social networking site babalife, to go along with babajob. Sean and stepfather Ira Weise have funded the project so far. Ira, a 58-yearold, is the veteran of three companies and brings his managerial experience to the team. “He was retired and was into remodelling houses with my mom when I pulled him in,” he smiles. His third partner, Vibhore Goyal came from the Labs. He was taken into Sean’s team after being recommended to Microsoft as a “good hacker” by people at IIT Bombay and writes most of the code for the platform. Vibhore has brought to babalife a robust set of features like with customizable friendship levels, making it on-par with the best in the business as far as the technology is concerned. The site has been on the beta mode so far, with around 70 low-skilled workers already placed and a data-base of around 1700 job-seekers. The platform gives free access to the database to potential employers. However, after browsing through the list of job-seekers, if they want to contact anyone of them, they will have to pay Rs 500 per job opening, plus a refundable deposit of Rs 300. To encourage people to recommend and register job-seekers and potentially spinning off a new class of entrepreneurs, babajob pays Rs 200 to the person who filled up the details of anyone selected by an employer. As of now, it has made aware a handful of cyber-cafes in and around Indira Nagar of the potential earning opportunity and redirects many of its job-seeker 24


/unique idea of the month

inquiries to such places. In addition to rewarding the persons and agents who fill up the forms, it also pays Rs 100 to anyone who refers a job-seekers to babajob. Both strategies are tailored to get around the handicap of the lowskilled workers’ twin handicaps - lack of awareness about online opportunities and when aware, lack of access to the medium. With the pay-out or shared model, Sean sees the platform growing into more than just an online phenomenon, with benefits being shared by the downstream partners such as cyber-cafes and field workers. “Internet is just an aspect of it.. perhaps the interface with the ultimate customer. But a lot of other things are required to make it work. For example, it depends on telephone connectivity, because the job-seeker has to be accessible to a potential employer. Also, once someone becomes aware of babajob, he must be provided assistance to get himself registered,” he

points out. Since the jobs are usually in-house, the need for security and trust-worthiness limits babajob’s ability to directly reach out to job-seekers and sign them on. The firm, however, has a field staff of around 6 people who distribute fliers and cards and try to get around the difficulty of getting known people by maintaining a list of former employers and other references. Sean feels building a well referenced job-seeker database is going to be his biggest challenge, not getting people to pay Rs 500 to hire someone. “We have only around 1,700 people now... I am waiting for the day when we can have at least 5,000 potential employees and then go to market and say, yes, I have so many people that you can hire..” The site is currently in beta mode, with employer charges waived off. “I don’t think finding enough people willing pay Rs 500 to hire someone is going to be the problem. There are


/unique idea of the month

difficult to cope with the expectations raised. “We thought we could do one neighborhood at a time, but that was a mistake.. it is difficult keep things to a neighborhood on the internet,” he jokes, “We have had people from

many people, especially those who have shifted into the city from outside, desperately trying to find someone to take care of their child or their old parents,” he points out, “Even now, when we have written on the website that it is

free, around 100 out of the 750 employers who registered with us have paid.” Presently, the three owners - Sean, Ira and Vibhore - do not draw salaries, while the remaining operations cost around Rs 2 lakh a month. Having been with Microsoft for eight years, Sean is depending on his savings to see the company through, besides some help from Ira. He has also sold his house in the US recently and expects the monthly expenditure to stabilize around Rs 5 lakh after he recruits more people to spread the word.

Meanwhile, media coverage has ensured that people from far flung corners of Bangalore are trying to get employees from the database, even as the database is still being formed. Sean says they have said no to external funding offers so far, including from many of the top VCs and angel investors in the country. “If it’s just money, then we don’t need it now... So, I ask them, why is your money better than ours?” he says. While it is too early to talk of lessons learnt, Sean says the project is finding it

London calling us and asking, when are you coming to London!” As of now, everybody is waiting to see what happens as site shifts into the pay mode by late November. Sean and Vibhore are also working on creating babajob applications that will run on top of other social networking sites such as Orkut and Facebook, to take advantage of the large user-base that these platforms offer. “I would say there is another six months before we finalize the business model, there are still some experiments to be done to see what works and what doesn’t. But I would be very disappointed if we haven’t expanded it to at least three more cities by then,” DAR E Sean predicts.

Sun Startup Essentials Jumpstart your Startup For more information log on to: http:/ © 2007 Sun Microsystems, Inc. All Rights Reserved. For information on Sun's trademarks see: All other trademarks mentioned in this document are the property of their respective owners.

DECEMBER 2007 25



How to get Angel funding for a startup I

t is unlikely that not too many have heard of Angel investing. For starters, the monies involved are nowhere near as large as in VC or PE investing. Nor are the companies themselves large. And most Angels are individual entrepreneurs themselves who have made it good. Some are senior executives in large organizations. For an entrepreneur starting a business, an Angel is the second port

of call, after you have used up your own and family funds (what they call friends, family and fools funding) and before you approach a VC. Typically, Angel investments are in the region of one to two million dollars and an Angel offers much more than funds â&#x20AC;&#x201C; they offer you expertise and access to their networks and are also more involved in your day to day operations than VCs and PE funds. Projects that are refused by VCs

as being too small for their portfolio would be better off getting Angel funding and reaching the right size to approach a VC. There are also cases of more than one Angel investor getting together to invest in a company. The Indian Angel Network is perhaps the ďŹ rst organization of Angels in the country. We spoke to Padmaja Ruparel, Vice President of the network to understand how Angel investing works.

Triple digit Crores

PE Funds

Double digit Crores

VC Funds

Few Crores

Few Lakhs 26 DECEMBER 2007

Angel Investors

Friends & Family




Could you give us a brief idea about the Indian Angel Network; what it does? Indian Angel Network is the first and largest Angel network in India. IAN brings together successful entrepreneurs and CEOs who would like to invest in early stage companies and create disproportionate value for all the stakeholders. The members make financial investments, but also provide strategic thinking and leverage their networks for the investee companies.

What are the network’s activities? Our activities revolve around investing. We source and vet deals and prepare them for presentation to the angels. The entrepreneur gets value from each interaction with the Network - be it the Secretariat or members. The vetting of propositions and reviewing the business model and strategy is done by the investor members themselves. This is invaluable as members, who are domain leaders, provide direct feedback and suggestions to entrepreneurs during the vetting process. IAN then hand holds entrepreneurs right through the investment process as well as any other help that the entrepreneur may want, post investment.

How does one become an Angel? Is it just by giving money to some entrepreneur? The members of the Network have had prior entrepreneurial and/or strong operational experience that they wish to bring to early stage businesses. They share a passion to enable more early stage businesses to create scale and value. The Network believes that early stage businesses require more than just money to succeed. They require close mentoring and inputs on strategy as well as

execution. The success rate of early stage businesses can significantly be enhanced if such guidance is available on a constant basis. Hence the network members collectively commit not just money, but also their time and expertise to investee companies. New members are proposed by existing members and membership is by invitation.

How does an entrepreneur identify an Angel to approach? What would the Angel need to know before investing? An entrepreneur can approach the Indian Angel Network which connects him to this leading group of Angels. IAN members would need to know have a complete understanding of the business proposition, the potential and scalability of the product and service, the entrepreneurial team, the market targeting, client acquisition and retention strategies, delivery model, risks and how they would get mitigated and the overall business model.

What returns are typically expected from Angel investment? Angels expect far higher returns than other investment options that are available in the market. As this is high risk high gain investment for the Angels, they will expect a return which is much higher than other investment instruments (like real estate, mutual funds, public equity, etc)

What is the normal investment period? What are the exit options? Usually Angels remain invested for about 3 to 5 years. Angel invested companies usually go in for a second round of funding or get merged with larger companies, which is DAR E when angels exit. DECEMBER 2007 27


opportunity opportunity//idea agri

Big Flora, Big Bucks Floriculture exports sector is set to touch Rs 700 crore by 2010. Huge government subsidies, diverse geo-climatic conditions and a dearth of big players; the equation is perfect for your entry /Arunjana Das


ipping champagne on the French Riviera, you contemplate the huge bouquet of fresh flowers that has been arriving with room service every single morning of your French holiday. “What exotic beauties!” you think. Little would you know that those roses and chrysanthemums were grown virtually in your own backyard! Yes. France happens to be just one of the many countries to which India exports its floriculture products.

DARE/flowers in demand Roses, Chrysanthemum, Gladiolus, Carnation, Gerbera, Dahlia, Poinsettia, Orchids, Lily Forms of export Cutflowers are exported in two forms: 1. Fresh form for bouquets and ornamental purposes 2. Dried, dyed or bleached (as potpourri)

comprise the majority of floriculture exports, nearing 72% of the total value. Cutflowers—both fresh and dried— command the maximum demand in the global export market. Its worldwide demand is growing at a rate of 6-10% per annum. Developed countries in Europe, the US, Japan, Singapore and Australia are the major importers since climatic conditions in these countries are unfavorable to year-round production of flowers. This leaves us with a wide field to play in with many factors in favor. Good quality soil, suitable climate, abundant water supply, low labor cost and proximity to markets are a few of these. Given all this, it’s a pity that the number and size of the players in this segment have been pathetically small. And most of the players are unorganized small flower growers. If you can afford to holiday on the French Riviera, you can surely start off a

Under the Seed Policy announced in 2002, import of seed and plant material has been made duty-free, subject to EXIM guidelines. The Agricultural and Processed Food Products Export Development Authority (APEDA), established in 1986, grants subsidies for establishing cold storage, pre-cooling units, refrigerated vans and green houses and provides air freight subsidy for exports. It assists growers/ exporters in improving the quality of flowers and promotes efficient post harvest measures, packaging and quality-upgradation. Why has organized floriculture not taken off in a big way? The reasons are many. Firstly, it is a capital intensive game. Secondly, it requires technical know-how. Thirdly, there is a lack of appropriate infrastructure. But setting up a floriculture unit is not a Herculean task. You need to follow a set of guidelines. As for the

BIG IDEA/THE POTENTIAL FOR FLORICULTURE EXPORTS HAS BEEN UNDERLEVERAGED SO FAR The message is simple. The world is saying it with flowers; and India has a part to play. The floriculture export market in India, which stands at around Rs 400 crore, is projected to grow upto Rs 700 crore by 2010. Floriculture is a broad term used for a wide range of flower products such as cutflowers, flowering and ornamental plants, bulbs, tubers, corms, rhizomes, chicory, orchids, mosses etc. Amongst these, cutflowers 28


floriculture-export chain. With an initial investment of around Rs 10-15 crore a unit and earnings many times over, it is a wonder that you haven’t started already! The prospects are green, which explains why the government of India is doing its bit for this business. To promote floriculture exports in the country, it has given 100% export status to floriculture and provides several tax benefits to EOUs.

actual setting up of the flower farm, you need to consider factors such as the species of flowers you wish to grow, climatic conditions of the place, soil quality, water availability, and air or land connectivity. Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh and the North-Eastern states score high on these counts. With appropriate infrastructure in place, states in northern and western India also come into the list.


opportunity/agri idea

Appropriate infrastructure comprises anything from a simple greenhouse to one fitted with sophisticated irrigation systems and automated climate controller. The kind of infrastructure that you set up depends on the site that you select and the flowers you want to grow. For example, the greenhouse that you build in your farm will depend upon factors like intensity of sunlight, local temperatures, etc. Your climate control systems will largely depend on the same factors plus humidity of the place, rainfall, etc. The actual process of cultivation needs to be done carefully. Different species of flowers need different treatments and environments. For exam-

ple, roses and gerberas need a cool environment with sufficient sunlight and high humidity, whereas carnations can survive in much cooler environments. Also, the roses grown in the mountainous regions turn out to be bigger and better than those grown in the plains. An efficient post harvest management system ensures that once the produce is harvested, it’s checked for quality, graded, sorted, bunched and maintained in cold storage facilities at required temperatures. The entire concept behind post harvest management systems is to ensure that the flowers are not destroyed, that your consumers get what they ask for—the

best quality flowers, and you get the highest possible returns.

How much will you earn from it? Each hectare produces 15-20 lakh flowers. From 10 hectares, you’ll make a produce of, say, 1.5 – 2 crore flowers. Loose flowers are usually traded by weight and the stemmed ones by dozen or stems. Roses and chrysanthemums are usually traded by weight or by the dozen. Gladiolus, carnation and gerberas are traded by the dozen whereas lilies and orchids are counted in stems. Roses, chrysanthemums sell for Rs 40-60/ kg, gladiolus and gerberas for Rs 50-100/ dozen and orchids and DAR E lilies for Rs 20-60/ stem. NOVEMBER DECEMBER 2007 29

RFCL Leverages HP's Power of Portfolio for a Leading Edge in the Life Sciences Space


elhi-based RFCL, an ICICI Venture company, is a leading solutions and services provider in the life sciences segment. The company has a presence in the pharmaceuticals, biotechnology, R&D laboratories, food processing, in vitro diagnostic facilities in clinical labs, hospitals, nursing homes and animal healthcare sectors. Prior to November 2005, RFCL was a part of Ranbaxy, a leading pharmaceutical player in India. After becoming an ICICI Venture company, the new entity is all set to emerge as a globally respected player in the field of life sciences and laboratory solutions, creating winning relationships to provide quality products and services. The company has grown, at double the market growth rate over the last financial year, and has drawn up an aggressive roadmap to sustain it over a three-year time frame. Last year, RFCL also invested in an indigenous multi-product manufacturing plant at Haridwar to produce diagnostic and animal healthcare products.

Tackling challenges the IT way As with any rapidly growing organisation, RFCL was faced with many challenges: • Acquisition

“Our assessment of the market determined that HP was the best choice to be our IT partner based on portfolio, technology and relationship management. The team managed to deliver a smooth, stressfree implementation with no cost or time overruns. HP’s understanding and the resulting consolidation exercise have helped us realise the goal of providing effective business solutions while ensuring IT capital investment optimisation.” Ganesan Ramadurai Senior Manager IS & Business Solutions, RFCL • Growing need to consolidate multiple platforms • Growth without trading off quality compliance • Maintaining a healthy customer retention ratio

• Growing need for CRM tracking • A well informed and agile mobile sales force • Scaling up current businesses and amalgamating new business across new product lines and geographies

Solution - HP puts it all together The decision at RFCL was finally to consolidate on one platform – a 60-user scalable SAP environment on Windows, running on HP Integrity Servers with Storage on HP EVA 3000. Backup was on HP Ultrium 448 Tape drives. All systems were customised from the ground up and HP front-ended the hybrid solution by managing the relationship with an implementation partner and facility management team.

HP Solution Core SAP Production environment running • Windows Cluster on HP Integrity rx2620 Servers with Intel Itanium 1.6Ghz, 6MB CPU • SAP Development/QA environment on Windows on a single HP Integrity rx1620 Server with Intel Itanium 1.3Ghz, 3MB CPU • Storage consolidation on an HP EVA 3000 with 146GB 10K FC hard drives • HP Ultrium 448 Tape Drive for back up • Blade infrastructure: HP Blade Servers with AMD Opteron processors • HP ProLiant Servers for the Exchange messaging environment

Benefits – for company & customer The biggest benefit to RFCL, was the ease of use and manageability of proven solutions. While on the customer side, it resulted in higher level of customer satisfaction. By partnering with HP and using the power of its portfolio of solutions – right from servers and storage, to software, solution partnership and IT management – RFCL needed to look no further for end-to-end support. On the one hand, the HP EVA technology provided RFCL with much-needed ease of use, virtualisation and ease of manageability while on the other hand its strong alliance with SAP provided RFCL with a great deal of comfort while making the choice of IT solution partner and porting its hardware and software on the platform. Other benefits included balanced performance of HP Integrity Servers and scalability and flexibility of the HP BladeSystem.

The Road Ahead Going forward, RFCL is all set to bank on HP’s portfolio of solutions while adopting technology for providing effective solutions at a faster pace and continuing to address risk mitigation, ensuring business continuity and IT security - right through the cycle of its operations. While SAP is the backbone of business operations, Communication Tools [MS Exchange] are also equally mission critical. Automation of other areas is also on the cards with the CRM project being ready to take off within the next few weeks. Are you also interested in leveraging technology for better business outcomes? Would you like to explore what HP can do for you? Contact First 20 enquiries are eligible for an Early Bird gift! © 2007 Hewlett-packard Development Company, L.P. The information contained herein is subject to change without notice

Clearing the way for success verse business impact. Most important, as the volume of business increases, we are able to scale effortlessly. How has investing in HP hardware and solutions helped your organization optimize IT spends? Before we embark on any IT project, we do a clear evaluation of the need and how its related to our business objectives. Vendor evaluation too comes into the picture. Unless we have a clear roadmap we cannot optimization IT spends.


rmed with the latest IT ammunition and infused with dynamism, RFCL has logged on to a new route for growth and success. Mr. Ganesan Ramadurai,

Senior manager – IS & Business Solutions at RFCL tells us how passion and innovation has combined with HP to clear the way for success at RFCL. What are the business needs that made you look at HP for a solution? After the divestiture to ICICI Venture, we became a completely new entity. This was both a challenge as well as an opportunity. The challenge was to manage the entire business independently and the opportunity lay in the fact that we could start from scratch and build up the business the way we desired. We put in place an ERP system – SAP ECC 5.0 – to handle our business processes. It was implemented as part of the iBEAMS (infrastructure and Business Enabling Architecture and Modelling Solutions) project which we had started in the company. But our IT implementation did not stop at that. We had to get in place a robust IT infrastructure, automating our whole enterprise in the process. How did you leverage HP’s solution portfolio for the same? Today, we have production centers in Mumbai and Vadodara for fine chemicals; our latest manufacturing facility was started in Haridwar recently. Since we are very particular about validated processes and certifications, there was a critical need to keep all our processes well documented with necessary supports. Our data centre comprising various HP servers enabled us to integrate applications in IT sphere. Modules such as Procurement, Manufacturing, Quality, Sales & Distribution, Planning and Finance are part of effective application integration.

What has been the impact of implementing these solutions? Has there been any tangible benefits? Yes, the benefits have been many. Our business requirements are taken care of; we have an extremely efficient IT system which is available 24x7 and there has been no ad-

Your mission statement declares the role of IT in making and implementing business decisions. How has the re-alignment helped leverage technology for better business outcomes? Our goal is not limited to just doing projects It’s all about how you go about implementing it and ensuring that all stages of the implementation life cycle is monitored. Lowering cost is a must, but at the same time having to be responsible to our customers and being completely involved gives us the feeling of inner satisfaction. What is unique about this particular combination of hardware and solutions from HP? We evaluated other vendors and realized that value for money was much more with HP than with others. The cost was less and at the same time there was no compromise on the products deployed and the quality of service offered. How has the relationship with HP helped in a smooth and seamless transition? Prompt response was one of the key factors that helped us in our relationship with HP. Moreover, we felt that they were not merely selling the products but were helping us in realizing what our needs and were gaps existed, were filling them adroitly. What are your future plans and anticipated milestones? We have kicked off a CRM project and shall be implementing fully in the next couple of months. Plans are been drawn up to set up a 'Disaster Recovery' (DR) model as part of 'Risk Mitigation'. Our short term targets would include initiating Workflow based applications and automation, preparing for IT security assessment and certification, and defining Business Continuity related processes with respect to IT. Would you have any advice for a growing organization particularly with respect to best practices in consolidation? Having just completed two years, creating a resilient organization for breakthrough growth is critical for us and it should be so for any young company. To achieve this we are growing both organically and inorganically. The need here would be to get our IT systems working in such a way that we should be able to manage mergers and acquisitions (M&As), align our businesses to our core activities and integrate them into our IT system. Most important processes to maintain best of breed practices in areas such as Internet security, Network vulnerability and Mitigation plans for different kinds of Operational risks have to be seriously taken care of.



The entrepreneurial journey Entrepreneurship is a means and a state of mind, and not an end in itself /Anurag Batra

What is the purpose of being an entrepreneur? Is it only to create wealth for yourself and your shareholders? I don’t think that an entrepreneur should be so narrow-minded. Are we contributing to the society we live in or are we giving back to the society from which we draw our wealth and fame? Are we saying thank you to the society at large? Remember the Americans say thank you with their cheque books.

• Everyone Wants to be an Entrepreneur • Is an Entrepreneur a Celebrity? • Sampada vs Sampati A leading UK based newspaper does an annual ranking of the most respected professions and the least respected professions. No prizes for guessing that the least respected professions are that of politicians, the police, etc, and the most respected are those of the doctors, teachers and so on. I wonder the results would be any different in our country. However, one thing is certain that being an entrepreneur that is to say running your own business or an enterprise is fast becoming an option that is very popular. Nope, I would say that everyone in India today wants to be an entrepreneur. The macro-economic environment is so conducive to be an entrepreneur and there are many opportunities to capitalise on. Being an entrepreneur is the in-thing today. Even celebrities like cricketers and film stars are turning entrepreneurs. I keep thinking why would someone want to be an entrepreneur? In my case I got fired so had no choice but to be one. Is it because Mukesh Ambani is the richest Indian and his gifting an Airbus to his wife on her birthday inspires everyone? Or is it the media hype that a Forbes’ rich-list or the fact that Ratan Tata and Anil Ambani have bigger persona and a better and clean image than say politicians and bureaucrats? The Nobel laureate Amartya Sen’s book “The Argumentative Indian” is suitably tilted, but I feel that the time has come for a book called ‘The Enterprising Indian’. Recently two separate studies amongst the second year students of some leading business schools in the country revealed that an overwhelming majority of these under-graduates wish to be entrepreneurs rather than

take up well-paying and cushy jobs. To me, this is another reiteration of the fact that our country is changing and there is a new India and new Indians. Business people and entrepreneurs are being invited to cut ribbons, inaugurate conferences and functions and give away awards. Are we seeing the emergence of the celebrity business person, or as I would like to call the celebrity entrepreneur? Is it because there is lack of celebrities in our country? While passion and ambition are driving the entrepreneurial spirit, the entrepreneur’s desire to make a difference to the environment around him or her is also a big motivation. That brings me to a very important and philosophical point that I would like all of you to think and figure out. What is the purpose of being an entrepreneur? Is it only to create wealth for yourself and your shareholders? I don’t think that an entrepreneur should be so narrow-minded. Are we contributing to the society we live in or are we giving back to the society from which we draw our wealth and fame? Are we saying thank you to the society at large? Remember the Americans say thank you with their cheque books. Are entrepreneurs creating sampati as in “selfish wealth” or sampada as in “selfless wealth”? I would like each one of you to do a personal audit for yourself and figure out where you stand. Entrepreneurship is a means not an end or a journey and a state of mind, and not an end in itself. You have to choose whether to create sampati or sampada. Let me end by saying “No task is so humble that it does not offer an outlet for individuality.” Being an entrepreDAR E neur, you can DARE to. Anurag Batra is real life first generation entrepreneur who is Much Below Average (MBA) when he is not busy writing such columns and can be reached at ed: Anurag is the founder of DECEMBER 2007 33



No Parking the sign of a new opening

The business of parking lots could grow into a Rs 5,500 crore per year opportunity by 2010 /Binesh Kutty


erhaps one of the most kvetched about issues of today is that of unavailability of parking space. Even still not many like the idea of doing something about it. Like the drawing room of a house, the first impression of any commercial building is made at the parking area. Let us begin with some interesting statistics provided to DARE by Dr. T. Elangovan, of the National Transportation Planning and Research Centre (NATPAC), “As per 2004 statistics, India had a vehicle population of 7.3 crore As of 2007, the number of vehicles registered in India is around 10 crore. In other words, 1 in 10 Indians own a motor vehicle,” He chips in another interesting analysis, “It is roughly estimated that out of 8760 hours in a year, on an average, a car runs for only 400 hours or so, leaving the remaining 95% of its time in parking.” Estimating the collections made



at various existing parking facilities, K. Subramanian, Director at Urbane Autopark India Pvt. Ltd, which is also the distributor of DKEE International, says, “In 24-hour parking locations, such as Chennai airport, the monthly collection at the parking lot goes above Rs 1 crore. That too, collected in traditional (manual) fashion. The collections could see a jump of nothing less than 50% if automated systems were installed.” These bits speak volumes about the opportunity in parking lot business.

Different types of parking While on-street parking can solve the parking problem in Indian cities to some extent, it is not the only solution, nor is it the most desirable in all cases. Even in on-street parking, there are different models and methods. Some of these have been attempted in various cities in India with varying success.

Subramanian cites some examples, “Singapore has a prepaid card system of parking, which was implemented in the city of Hyderabad; but it failed, while the European system of coinoperated parking meters rolled out on the busy Brigade Road in Bangalore has largely succeeded”. Apparently, Brigade Road used to have 500 cars parked throughout the day before this system was implemented. This number has increased to 1500 after the implementation of the system, leading to not only more revenues, but also to more parking for shoppers in the areas. As for off-street parking, the common types of facilities are surface car parking, multi-storey car parks, roof parking, mechanical car parking, and underground car parking. According to Elangovan, “There are about 40 cities in India with million plus population where parking garage facilities



“Out of 8760 hours in a year, on an average, a car runs for only 400 hours or so, leaving the remaining 95% of its time in parking." - DR T ELANGOVAN, SCIENTIST-G, NATIONAL TRANSPORTATION PLANNING AND RESEARCH CENTRE can be effectively used. The four jumbo metropolitans and another dozen metro cities like Bangalore, Hyderabad, Ahmedabad, Pune, Kanpur, etc can be the target group in the first phase, and can gradually be enlarged to other million plus cities. In European countries, multilevel car parking has been in use, in almost all five lakh plus population cities for over two decades.” Return on investments, from these parking garages, can come in many forms; commercial utilization of the premises and user fees (collection) being the primary source. However, one incessant issue that parking lots have constantly faced is the difference between the collectables and actual collection. The reasons for the difference in funds are manifold. It could have been larceny of the parking attendants, flat rate for no matter how long a vehicle remained parked at the lot, etc; which is easily tackled by the sophisticated parking equipment installed now. How much will these machines ameliorate the parking facilities? Well, in one particular highly popular mall in Delhi NCR; the daily collections saw an increase of 30% from the collections before they decided to install automated machines to manage the parking lot.

Some offshoot opportunities

Calculation of space requirement

Apparently, the equipment required for parking management are mostly imported, not before paying up hefty duties on them. Even magnetic ink tickets (a la barcode) used at parking lots has to be mostly imported. With nobody or too few players in India, these areas hold huge potential as promising business opportunities. Apart from this, even simply operating parking lots sounds good. Already existing players, like Urbane Autopark, train their parking lot operators, to increase efficiency and provide good service to the customers.

Since parking is a function of land use, there is a uniform standard prescribed for meeting the parking requirement at different land use developments. The specifications prescribed by the Indian Road Congress and zone regulations by the master plan of the area, recommend appropriate norms for providing parking space. A car requires a space of 2.5 x 5.0 meters, while a mini bus or van requires an area of 3.0 x 6.0 meters. A parking garage of 200 x 200 ft can accommodate roughly 100 cars or 500 scooter/motorcycles. A five-storey

Desirable Parking Space Standards for different land uses, as per IRC specifications Office (public, semi-public, or institutional)

One space for every sq. m. floor area

Shops and markets

One space for every 80 sq. m. floor area


One space for every 10 seats

Cinema halls and recreation centers

One space for every 20 seats


One space for every 10 beds

Industrial premises

One space for up to 200 sq. m. and additional space for every 200 sq. m. floor area


One space for every 2 flats (flats of less than 100 sq. m. area)

Multistoried group housing

One space for every flat

Residential plans

Community parking is recommended

DECEMBER 2007 35



“The collection at Chennai airport parking is estimated at about Rs 1 crore per month. There are opportunities all over the country lying untapped for equipment manufacturers, magnetic ticket printing and managing parking lots." - K SUBRAMANIAN, DIRECTOR, URBANE AUTOPARK INDIA PVT. LTD parking garage can easily accommodate parking requirement of 300 cars and between 750-1000 scooters/motorcycles. In a country like India, on-street parking solutions can only help tackle a small portion of parking requirement. Multilevel parking system is highly being recommended by municipal bodies. Delhi already has one such parking at Nehru Place, built by Eros Group. If online news reports were to be believed, there are multi-level parking garages coming soon at Connaught Place, Kasturba Gandhi Marg, Baba Kharak Singh Marg and Sarojini Nagar. Mumbai has one coming up at Nariman point. Estimate is that a city like

Chennai would need approximately 20 such five-storey parking lots, and 30 odd medium level parking garages. These figures will run four times more in the four jumbo metros.

Challenges to face In India, the parking lot business has not been taken seriously yet. Finding workforce is a challenge, quite simply because this is not the kind of job that attracts today’s youth. The success of the on-street technique in Bangalore was largely due to the support of the government. Parking is a function of land use, and there are the obvious problems, such as unsupportive

DARE/estimates Opportunity space across the country by 2010 METROS Number of metros


Malls/Commercial complexes per metro


Surface parking lots per metro


Multi storey parking garage per metro


Total number of parking spaces


Avg. collection per parking lot per day


Avg. collection per parking per year (350 days)

Rs 1.75 Cr

Total collection

Rs 3281.25 Cr

OTHER BIG CITIES Number of big cities


Malls/Shopping complex per city


Surface parking lots per city


Multi storey parking garage per city


Total number of parking spaces

Rs 2475

Avg. collection per parkinglot per day

Rs 20000

Avg. collection per parking per year (350 days)

Rs 0.7 Cr

Total collection

Rs 1732.5 Cr


Rs 5013.75 Cr

Insite advertising

Rs 501.38 Cr


Rs 5515.13 Cr

DISCLAIMER: This data and analysis are indicative and Cybermedia makes no warranties about its accuracy. You are advised to do your own analysis if you are evaluating a similar venture.

Multi-level parking at Nehru Place, New Delhi

36 DECEMBER 2007

government policies, parking mafia, and such that one has to deal with. Note that this is not a problem unique to India, all other countries too face this problem. Hence, there is a preference of running off-street parking facilities, DAR E over on-street parking lots.



Enchanting India: Growing globally from the start /Philip Anderson


ttending an international business school with fellow students from around the world was the experience that launched Parikshat Laxminarayan’s entrepreneurial journey in 2004. A former amateur tennis star once ranked number 108 in the International Junior World Rankings, Laxminarayan grew up in India, earned an undergraduate degree in the United States, and worked as a consultant in Washington DC before returning to Bangalore in 2003 to spend a few months with his family’s media distribution firm. In September 2003, he entered INSEAD’s one-year MBA program, like most of his classmates spending terms on both campuses, in Singapore and in Fontainebleau, France. In INSEAD’s international environment, students work every day with classmates from dozens of nationalities, and wanting to be a good host, he brought some of his international friends from INSEAD home with him during his first term break. When one said that India was so different from what he thought it would be like, the seed of an idea lodged it-

self in Laxminarayan’s imagination: he thought to himself, “There ought to be a business opportunity around traveling through the most beautiful parts of the country.” In the first few weeks of his studies, Laxminarayan befriended Alex Metzler, a German classmate who shared his determination to sign up for every elective course in entrepreneurship. One professor suggested the pair consider helping three Indian entrepreneurs write a business plan. Laxminarayan relates: We were working in a cubicle when I asked Alex if he’d really start a business, given a good idea. We spent the whole night brainstorming something we thought we could pull off. I said “How about a travel company?” and one concept that we came up with was high-end travel to exotic destinations. Being a thorough German, he had a one-page summary of the idea done the next morning. When we talked with our professor, he said, “You don’t know anything about travel, do you?” Nonetheless, we wrote a business plan and stopped applying for jobs.

Most good business plans start with an insight into a latent customer need or problem that is not being met well. The two classmates’ point of departure was the observation that foreigners travel to India much less than one should expect. Laxminarayan comments, “India is an amazing destination; there is no reason why Thailand has 7% of the world travel market while India has less than 1%.” Careful investigation suggested that the fundamental problem was quality assurance and trust building which required an unusual business model. Laxminarayan summarizes: Many travelers have a poor perception of India because they know people whose travel experience here was not delivered well. There is a big disconnect in the US and Europe between the value expected and what is delivered, while the people in the Indian tourist sector who are doing a good job couldn’t sell well outside India. Few companies control the process end-toend, understanding the customer’s need, then selling in a professional way and delivering what tourists

“Many travelers have a poor perception of India because they know people whose travel experience here was not delivered well. Few companies control the process end-to-end, understanding the customer’s need, then selling in a professional way and delivering what tourists are looking for. We decided to control the experience and enhance quality at every step.” — PARIKSHAT LAXMINARAYAN 38 DECEMBER 2007


case/INSEAD are looking for. We decided to control the experience and enhance quality at every step. The only way to do that, the partners felt, was to own sales and marketing while partnering with carefully certified service providers in India and thus control every step of the value chain. Thus “Enchanting India” was born to provide a reliable travel experience at world-class standards for an international audience willing to pay a premium for good service, high-quality and unique activities. The company booked hotels, planned transport and activities, and trained the local tour guides it chose to use. Says Laxminarayan, “The average travel company outsources to a tour operator in India; we partner and negotiate directly with external service providers on the ground including all our hotel partners. We have stayed personally at or visited every hotel we use, tested every car company to ensure the drivers are good, and certified every person who interacts with customers on the ground.” Based on Metzler’s experience, the partners decided the initial market segment to target would be Germans who want individualized, high-quality vacations. Germany, the largest international travel market in the world, seemed under-served, especially because it has a relatively large population of discerning travelers who enjoy exotic destinations. Further research validated their analysis, so the two classmates began raising funds, and found their school connections invaluable. Laxminarayan amplifies: It was our strategy to avoid venture capitalists, because we were too small for them and we wanted to maintain control. One professor saw us struggling and said he would be our first investor. The fact that an INSEAD professor has backed us helped a lot to get other investors. Our first round raised €150,000 from private investors around the globe, half of them from the INSEAD alumni network. We put up a notice on INSEAD’s VentureNet web site for alumni,

and several alumni contacted us through that before investing. Five classmates also were investors, and the rest of our backers came from our personal networks. The pair of co-founders graduated from business school on July 1, 2004, and reached Bangalore ten days later. For Laxminarayan, it was a return home; for Metzler, it was a growth experience. Metzler recalls: Germans are about as different from Indians as is possible. To do business in India if you come in as a foreigner, you have to understand the culture. You can be very successful, but there are some key points you have to get right. Relationship building is vital. As a German, if I ask for something in a week and someone says yes, that’s what I expect. This is a very polite culture, so people will not say no, even if they know a week is impossible. Now I get to know a person, spend time understanding him, build common ground. People here will work really hard if they like and respect you. It’s a warm culture with a lot of good, smart people. One strength of the enterprise was that each partner brought complementary knowledge to the venture, as well as a personal commitment to his friend, forged through long weeks

of shared hardship from launching a company while completing a demanding MBA program. Laxminarayan understood better how to work with Indian employees and partners, while Metzler was familiar with the German market. However, neither was steeped in technology, which turned out to be crucial for the company. Most ventures end up doing things that are quite different from what the business plan spelled out, and Enchanting India was no exception. Laxminarayan explains: We started with a retail-based model, planning to open a high-end group of travel boutiques across Germany where people could come in and book a trip. Soon we realized that it made no economic sense— nice locations in places like Munich are too expensive. So we moved to an online strategy. We are not an online travel company; we do not sell or transact on the Internet. The Internet is a facilitator to generate leads and provide information to our target market. After we dropped the retail store idea, 80-90% of our leads were generated from the Internet when people search on Yahoo or Google for tailor made trips to India and related keywords The ability the World Wide Web gives small companies to reach customers around the globe proved cru-

DECEMBER 2007 39

DARE.CO.IN cial for Enchanting India. The company opened offices in Bangalore, Delhi, and Munich (where Metzler eventually relocated), but 95% of the staff was located in India. It was able to recruit high-quality German speakers in India so that the company could provide personal counsel to each prospective customer who found it on the Internet and asked for more information. An online-only sales model would not have worked for Enchanting India, Metzler contends, because the combination of inexpensive global reach online plus personal selling by an Indian staff creates value. He elaborates: Our web site is optimized to reach customers. Communicating to customers who find you through the Internet and convincing them you are trustworthy is a bigger challenge. You have to make a high-end Web site that inspires trust, then early on have prospects work with a high-end person who inspires trust by advising the customer well, being responsive, and addressing questions. Interactions that support your claim will help you succeed. We are just one of a hundred companies on the Web; it is when we talk to the customer in person that we can differentiate ourselves. Because the foundation of the business was affordable Indian talent, recruiting, developing and retaining people was one of the partners’ most crucial tasks, and it took time for them to perfect a system that worked. Laxminaryan relates; Multinational companies use headhunters to recruit, and we tried that but it is not the best channel for us. What they perceive as quality is not what we are looking for. We use referrals as our most important channel. If someone has referred you, you have a personal obligation to put your best foot forward or your friend will look bad. If you put an ad in an online job site, your inbox will be flooded. Since we interview people via a multistep screening process, that isn’t economical. What you get in India 40 DECEMBER 2007

case/INSEAD is people with amazing skills for a reasonable salary. And Indians are emotional—if you excite them, they can get anything done. Enchanting India began converting leads quite early, though to the founders’ surprise, as many customers came from English-speaking countries as from the German market segment they had targeted. The company turned profitable after seven months, and realized revenues of €1.2 million in 2005, its first full year of operation. Many first-round investors re-invested in a second round of financing raised that year, while new investors joined

Enchanting India could alter the way it reached customers. One approach might be to invest much more heavily in a wider range of Google Adwords to drive more inquiries. Another approach might be to work more closely with travel agents. once they saw the company was making money. By mid-2006, Enchanting India was at a crossroad. The business was growing steadily and profitably, but once its high-end customers had enjoyed an unforgettable trip to India, they typically looked for another exotic destination for their next vacation. They referred their friends to Enchanting India, but the company was in the uncomfortable position of having no other products to offer its satisfied, loyal clientele. As Laxminarayan and Metzler pondered the best growth path, three alternatives seemed viable. First, Enchanting India could expand geographically. Laxminarayan

was particularly intrigued by Africa because it was an attractive destination for those seeking an adventure, but had many of the same issues that made India problematic for high-end travelers. However, it was not clear that either partner had the cultural knowledge or the contacts on the ground to replicate the intensive screening and quality certification process that the company had in India. Offering vacations outside India also meant opening new offices and hiring people who would be managed much more at a distance. If the company were to expand outside India, would Africa be logical, or would some other region have more promise? Second, Enchanting India could expand the range of market segments it targeted. It could target affluent travelers from outside the German-speaking or English-speaking region, or it could target people who came to India for different reasons, e.g. to do business or to shop. The company also could potentially provide other services than arranging travel, to keep earning revenues from loyal clients who had enjoyed a positive vacation experience. Third, Enchanting India could alter the way it reached customers. One approach might be to invest much more heavily in a wider range of Google Adwords to drive more inquiries. Another approach might be to work more closely with travel agents, offering to provide a high-quality experience to those customers most willing to pay for a reliably memorable, hassle-free trip. A third might be to find some group or association to partner with, co-marketing to its members and possibly co-branding unique India travel experiences. Globalization, the Internet, and the new allure of India around the world had made Enchanting India possible and profitable. The next step for Laxminarayan and Metzler was to identify the best way to continue growing the enterprise. Which alternative held the greatest promise for the most manageable risk?

Which alternative did Laxminarayan choose? see pg. 90



Bala Deshpande Director - Investments ICICI Venture Bala has been with ICICI Venture since 2000. Her private equity experience has seen the full cycle from nurturing young companies to executing over 10 exits including IPOs, buy-back, strategic sale and capital market divestments. She is on the board of several companies including Pantaloon Retail, Subhiksha, Air Deccan, Nagarjuna Construction, Welspun, TechProcess Solutions, and amongst others. 42





he ICICI venture portfolio has one of the widest ranges sector wise. Why such a wide range? Let me give you a bit of historical background on that one. When we started out, we were focused on very small ticket and small medium enterprises. So for the first eight to nine years of our existence, between 1987 and 1996, the most prolific deals were in engineering companies. Everything was SME at that time. There was really no big corporate. At that time, the PE marketed had not developed. You were more of a venture player at that time? Yes. We were more a combination of venture and late stage. I think one of the good things about us is that we have been across industries thanks to our parentage. We have been across industries and across stages because we have had such large relationships and those relationships have continued to play out for us, as a private equity player. For example, in 1996, we funded retail companies. We funded lot of media companies, IT services, IT sectors and in 2003 we looked at manufacturing. So for every fund, we look at what is the best way to construct the portfolio given the macroeconomic context. One of the key learnings for us given so much of on-ground experience is that in India, to build a robust portfolio, we must look at diversification. This really stems from the fact that there are no sectors that offers enough depth. That is again changing as we speak. So I don’t want to sound as if this is something that we are going to be

How do you allocate time to an investee company, how do you measure the returns? At the end of the day I don’t even think we calibrate our time depending on what we expect of the company. Once we put in our money, we act as partners. The entrepreneur may or may not believe that (laughs). It doesn’t matter whether it’s a $5 million deal or $25 million. I have to finally deliver. I have taken a bet on this company and I would like the company to succeed. I don’t think that culturally we are there in terms of measuring the time that has been spent on a company and the output that has come from it. That’s not the way Indian businesses work. People are not very sure what they want to share with their PE player. We have to build trust. We have to build the trust and the confidence that after having shared my problems with my board or with my investor, I would be able to get a solution to the problem rather than their just questioning me. We never measure this in terms of time. It is always in the context of how we can maximize value for the company. That way both of us win. The valuation or the way in which the company develops is really what is most critical. So the benchmark really is growing valuation? Yes. That’s what we work on most of the time. We are very particular about keeping ourselves very focused on what are the evaluation drivers and what is missing and what we need to work on. We continually keep a check on that.

investor of the month stuck with for a long time. The reality is that today there are a lot of sectors which are yet to develop, which are yet to grow and therefore the excitement for a private equity player is to participate very early on in the curve rather than later on. What is your level of involvement with an investee company? That would be dependent on the plans and also the strengths and weakness of the management. So it’s not the favorite “I would only work on strategy”. Sometimes we work on strategies and HR, helping them recruit. Sometimes the biggest issue is having an MIS and a financial system which will help the company understand much better where it is going and how it is going. With each company we have to really sit down and understand it before deciding what is really required. There are times when we say that there is nothing to be done. They are doing an extremely good job so I will just go to the board meetings and help them when they want us. On extreme case, do you get involved operatically? In the minority (stake) cases, no. In the majority case, may be we put in our people but there obviously we are the largest shareholders.

Many investors say that they try to build synergies amongst their portfolios. Is that something you do? I would like to claim that we are the pioneers of that trend in India. We were the first ones to start an entrepreneur conference where we get all our entrepreneurs together and help them network with each other. Getting them customers or putting them in touch with technology partners… we too try to do that. But I will be very honest with you, and this is from me personally, I think it is easy to say that we drive synergies and try to drive values. Synergies come because of the entrepreneurs and not because of the investors. I can only recommend. Being on the outside, I can see the linkages, I can see the perspective. But finally, it takes the CEO's will, understanding and ability to drive it through the organization to make it happen. I don’t think an investor sitting outside can really think through all the dimensions. That is my very personal opinion, not necessarily from the company. What are the potential areas of conflict with the investor that the investee company should be aware of? The answer is very simple. I think the conflict is not there if the intent is good on both sides. Conflict arises if the entrepreneurs start questioning ‘why my VC or my private DECEMBER 2007 43



equity player is making money.’ Or my intentions are to make money at the cost of the company. That is the only thing which can lead to conflict. If both of us are focused on the company, there should be no conflict. In your portfolio. There are some very similar companies. For example, you have Subhiksha and Pantaloon… Subhiksha is small format which Pantaloon is not. Lots of people ask me about Shoppers’ Stop and Pantaloon. I was on the board of both the companies. They were addressing very different markets. To answer your question, we are particular about not doing conflicting deals. We did PVR; we didn’t do any other multiplex company. We did two textile deals. But they are not similar at all. One is in terry towels, and the other is in polyester viscose suitings. Typically, how is the exit planned and managed? Very, very carefully. In fact, it is one of the most important discussions we have with our entrepreneur before we enter a company. We spend an inordinate amount of time discussing this. Both in terms of concepts, in terms of what we have done in the past as well as what we should be doing

possible. In some cases an IPO is not possible and in some cases we feel that a strategic buyout would not pay the price. So there are ultimately three or four options and you pretty much have a sense of what could be the most likely path. But we tend to not freeze on this; we tend to keep that as a much more real time decision. Do you periodically review the company? We do have periodic reviews. In fact we review every three months on the major parameters. Every month, we look at the financial results and stuff like that. On a typical account, how many people from ICICI venture would be involved? Two. Plus the CEO. One of them would be on board. And the other person would be supporting. We also make it a point to make our entrepreneurs meet more people from the organization. They will meet our CFO, they will meet our CEO. They will meet others who can add value, like our Operations Head. If somebody were to approach you for funding, what should s/he be ready with? What should they come and tell you?


SHOULD COME PREPARED TO SPEND TIME AND ENERGY AND ALSO BE VERY HONEST AND OPEN WITH US in the particular case. In India, the concept of VCs coming in and going out is not really understood. The typical and obvious questions are what is your return expectations, what is the time period that you will stay… all that is fine. But what is very critical for us is the intention of exit because the fundamental difference between an entrepreneur and us is that the entrepreneur looks at it typically as a lifetime – even that is changing now – and we would be looking at a five to seven year kind of timeframe. But it is not really in terms of timing. For example, we could have reached a stage where we have made our returns in say two years. We want to make sure that the entrepreneur does not grudge that. At the end of the day, he has to understand that we are basically fund managers and we have a fiduciary responsibility to exit at the right time. We spend time at the beginning so that when we actually exit, we are not flouting the entrepreneur’s expectations and we leave the company in a very good shape. Is there a preferred mode of exit? Is it decided right in the beginning that these are the options that will be considered, or is the call taken later. The preferred mode of exit is the one with maximum valuation (laughs). We do have a sense of what could be 44


Basically, what are you looking for? If I may take the liberty of answering this question a little bit differently; I don’t want to give the typical vision. I guess these are all known things. What I would like to definitely leave with you as a thought is – they should come prepared to spend time and energy and also be very-very honest and open with us. Yes, the sector is great, and the company is clean (corporate governance), I believe in the growth plan; but if I am sitting with a person whom I cannot believe in, I will not do the deal. It is a bit of a 0 to 1 game, so you have to be open about yourself as an individual if you are a single entrepreneur or if the management team is there, they have to be very honest because at the end of the day, this is a long term relationship. Private equity is very different from being a public investor. You will have to live with the good and the bad. Similarly, we have also to be very open about what we can do and what we don’t do. So the openness and the relationship that gets formed are very critical. And therefore the entrepreneurs’ intent and ability to build that relationship with us actually makes a lot of difference. He should really, come ready to DAR E do that.



You too can make it happen Capt. G.R. Gopinath


hen you started Air Deccan, did you really believe that you could revolutionize air travel in India? Subsequently the entire business model changed for the industry… Yes, I think the way it happened was that when you are starting a new business, somewhere the idea strikes you; you see things which others do not see. Because you see it and others don’t, there is a problem of carrying out the dream. It is not just about funds, which is the most important thing. It is getting people to follow you. It is getting top talent to join you. It is getting investors to put money in your business; getting the government to agree to give you the clearances and licenses. You might not start out by wanting to revolutionize something, but you see a really great idea, a great dream. It is not enough to have a dream; you need to be possessed by it. Especially, when it is an idea that is totally absurd for others. But for you it is not absurd, because it is staring in your face. When I started this, I never debated whether I should do it or not; that never came into my mind. The only thing was what should be the business model, how do I do it, when should I do it? Because I was so consumed by it! How did you get the idea of a low cost airline? I was already running a helicopter company. I used to fly from Goa to Bangalore in a helicopter, and each time I came across a village, I saw something reflecting from below. I used to wonder what it was. When we flew down and came close to these mud huts in the small remote areas, we saw that they were large dish antennas! So suddenly for me, it was not a billion hungry people, for me it looked like billion hungry consumers. The government says they have to be fed and have to be given subsidies. For me a billion consumers is different from a billion mouths to be fed. Instead of a liability, it is the biggest asset we have. But what triggered all this was not that. What triggered the airline was: I said, all these people, even in small villages and small towns are buying TVs, motorcycles, cell phones... But airline tickets were not part of that consumer

46 DECEMBER 2007

space. That is what triggered me. In all developed economies middle class people travel by air, that was a part of your lifestyle. That is how all this got triggered, because I saw a new India. An India that was different from the India one can normally see. An India that was vibrant and resurgent and where consumers were buying everything except air tickets! I realized that it is not far off before that happens. Somebody had to trigger it. I knew that it was possible to do it. I knew that this idea was so powerful that I would not let anything come between me and my idea. I never hired a consultant or did any market research to tell me whether people will fly. I mean, it was staring in my face. If the economy improved, people had to fly. I was looking at it as a retail market of a billion people, rather than a niche market for the rich. I said that I must build the company from scratch in India for Indians, using Indian genius, because the rules and regulations were different, the geography, culture, infrastructure is different. So I ventured into it, and I just did it. You started with helicopters. How did that happen? Any learnings from that venture? When I started the helicopter business, and when I saw the airline opportunity – both times, nobody believed that there was a market. But I felt that with the country’s infrastructure being poor, helicopters are not glamour toys, it was great infrastructure. It is a highway in the sky. The country needed this infrastructure. I have an army background, and all my friends were pilots, and I started the helicopter company. I had absolutely no funds but I had a great dream. I think what is more important than capital is your energy, passion, and commitment. If you have all that, and have a great idea, people will put money in your venture. I set up the helicopter company and people asked me how many Tatas and Birlas are there who will fly in your helicopters. It took me about 2-3 years before I could get started. But it was a single-minded focus, single minded commitment, belief in yourself, belief in the dream. You put all your assets into the venture, and it’s likely that that won’t get you anything. In my case, it would not even get two blades of the helicopter, forget the helicopter. So it was



What is more important than capital is your energy, passion, and commitment

DECEMBER 2007 47


Your ability to not give up is some times more important than the greatest idea.

India is all opportunities on one hand, and on the other, you need to continue to ďŹ nd alternative ways of doing it.

You cannot sustain a low cost product if you do not have the scale. 48 DECEMBER 2007



/icon necessary to first believe in it yourself, which meant putting at stake all that you have. Then it was a relentless pursuit; your ability to not give up is some times more important that the greatest idea. You have to keep focused, and keep your dream alive, and not give up. It took us three years to get a license. We started with one helicopter, and became the largest helicopter company in the country. India was changing. I was seeing it. I could almost touch it. If you are always cynical and criticizing, you cannot do anything. Cynicism is slow suicide. Of course, you have to take on or criticize the government, but you also have to work with the government. It is important to believe in the country’s future; everything will fall apart if you don’t believe the India story. I knew that in spite of problems, India was going to become a great economy. State governments were competing for investments. There were reforms in progress, started by Rajiv Gandhi, and Narsimha Rao. I felt that these were irreversible. All this was very important in my ability to take a decision. You will find those who say that in this country, you need money, you need to bribe, you need connections and influence. This is not true. Of course, there is corruption, but it is also possible that if you work hard and you are committed, if you are passionate, if you have a great idea, and if you are

others had 10 flights on Mumbai-Delhi, and I had only one flight, they would put a flight half-an-hour before mine and price it below mine, so no one would get into my aircraft. So it was important for me to have a size bigger than them. Today our route network and number of flights is bigger than the competition. It is also important to have size and scale, because it is necessary to have growth within the company. Otherwise it will be difficult to retain people. You also cannot sustain a low cost product if you do not have the scale. So that is what I did. I added in two aircraft a month, for about 9 months; 18 aircraft in less than one year! And in many of the places, you were the first to go… I believed that there was no point in building a MumbaiDelhi Airline. I also felt that in the long run, you need to stimulate demand and you need to get the people in other parts of India to fly. You need to penetrate deep into the country, and integrate the unconnected parts with the connected parts. Only then will you have a business which will be robust enough to be scaled up. Otherwise, you will only be taking each others passengers. You need to make people from Belgaum fly to Bangalore, if at all you want to increase your flights from Bangalore to Delhi.

MANTRA/IT IS NOT ENOUGH TO HAVE A DREAM; YOU NEED TO BE POSSESSED BY IT. ESPECIALLY, WHEN THE IDEA IS ABSURD FOR OTHERS willing to take the risk, you too can make it happen like all the people who have done it; like me, or those bigger than me like Narayana Murthy of Infosys, or Kiran MazumdarShaw of Biocon, and more. All have shown that it is possible to build success in this country, in spite of all problems. From helicopters to commercial airline, how difficult or how easy was the transition? These are two different businesses, and again I had to start from scratch. I had to put together business idea and plan, and then I had to raise funds for it. One Airbus costs Rs 200 crore! An ATR is about Rs 70 crore. I don’t know what took me on, I never even had the time to think whether this will happen or not happen. I did not waste time in analyzing. India is all opportunities on one hand, and on the other, you need to continue to find alternative ways of doing it. So we introduced call centers for selling tickets and e-ticketing! Once my plan was ready, again I started with one small aircraft. Venture capitalists saw it and they gave us money. It was not easy, but nothing great is achieved so easily, right? At one time, you went into this rapid expansion mode… Almost two years ago, we added about two aircraft a month. Because it was necessary to have a certain size. If

You are seen as a person who is different from the rest – a maverick so to say; you have roughed it out. How has this image worked for you or has worked against you? (laughs) I don’t know, I never analyzed which cultivated image should you fit in. You need to have sincerity and dedication; courage and the conviction in whatever you do. Believe in yourself and your dream. That is what I did. I never looked at myself. So sometimes it probably helps, and some times it may not help you. Some people may shy away from you; some people may also invest with you because they think that this guy is different. For somebody who is starting off today, given your experience, what advise would you give? The most important thing is that people need to have the courage to go the whole way. If you do it half-heartedly, you will not succeed. They need to have the courage of their convictions and the ability to pursue odds will be there. You need to dream big, and you need to have the courage to follow the dream. Also, you won’t succeed if you don’t have a passionate involvement, you must enjoy every minute of what you are doing. Because you will face so many diversions; so many people telling you different things. You need to have perseDAR E verance, focus, and be relentlessly going after it. DECEMBER 2007 49



Get a green office

Green buildings may cost marginally higher than normal ones. But corporate India is waking up to their benefits, including significantly lower running costs and a better brand image /Vimarsh Bajpai

ITC Green Centre, Gurgaon

50 DECEMBER 2007




ant to shed your energy bill by 40-50% and water bill by 20-30%? You could achieve that and much more by choosing to house your office in a green building. A green building uses recycled and environment-friendly construction material and is equipped with energyefficient lighting systems and maximizes natural lighting. It recycles and manages its own waste particularly through water recycling and treatment and keeps the indoor air free from germs by air quality control. Having a green building not only helps save running costs and the environment but also enhances brand image. So far, such buildings in India include office complexes, IT parks and educational institutions. The green building movement picked momentum in the last four years with area under eco-friendly construction increasing from a mere 20,000 sq ft in 2003 to over 25 million sq ft currently. CII-Sohrabji Godrej Green Business Centre (CII-GBC), situated in Hyderabad, was one of the first buildings to receive the Platinum rating from the Leadership in Energy and Environment Design (LEED) of the US Green Business Council in 2003. The council rates green buildings around the world, and Platinum is its top rating. There are now about 80 such buildings in India including the Hyderabad Institute of Technology and Management, IIT Kanpur’s new building, Hiranandani Gardens in Powai and Paharpur Business Center besides those of corporate majors such as ITC, Wipro, Patni and CSC.

What is a green building? Although a fairly new concept in the modern world, green buildings have been part and parcel of Indian architecture for centuries. “If you look at the Haveli design or old forts with shaded corridors and thick walls, most of them were either on the banks of rivers or large lakes or ponds to keep the foundation cool,” says Vidur Bharadwaj, Managing Partner, Design and Development. “In those days, there were no fans or air-conditioners;

still people lived happily because of the way the construction was done,” he says. A ‘green’ architect, Bhradwaj has designed several eco-friendly buildings such as the Wipro Centre in Gurgaon and Patni’s and CSC’s offices in Noida. Mordern green buildings do much the same things, albeit in a different fashion. For example, take the ITC Green Centre in Gurgaon. Fly ashbased cement has been used to build the ITC Centre, thereby re-using the waste generated by the thermal power industry. The building uses solar heating to provide hot water. Hi-tech chillers are used to minimize the energy intake, and the air-conditioning equipment used is ozone free. The Paharpur Business Centre & Software Technology Incubator Park (PBC) in Delhi, has also implemented eco-friendly practices so as to qualify for LEED certification. “The business centre conserves energy and water, minimizes use of non-biodegradable substances, promotes toxin-reducing plants to keep the air clean, and uses waste management techniques,” says Kamal Meattle, CEO, PBC. His company is now developing a new ‘green’ 1.7 million sq ft SEZ IT Park – GreenSpaces in the outskirts of Delhi.

Cost Concerns The cost of developing a green building depends upon a number of factors such as the size of the land, building material, eco-friendly technologies, and the amount of recyclable material used. According to Meattle, “the cost of developing an A class building is about Rs 2,400 a sq ft. A Platinum rated building (green building) costs 10%

DARE/benefits of green building Economic • Reduce operating costs • Enhance asset value and profits • Improve employee productivity and satisfaction • Optimize life-cycle economic performance Environmental • Enhance and protect ecosystems and biodiversity • Improve air and water quality • Reduce solid waste • Conserve natural resources Health and community • Improve air, thermal, and acoustic environments • Enhance occupant comfort and health • Minimize strain on local infrastructure • Contribute to overall quality of life Source: US Green Building Council

more.” Says S Srinivas, Principal Counsellor & LEED Accredited Professional at CII, “the cost of developing a green building is 5-8% higher than that of a conventional building. However, the payback time is 3- 5 years.” According to Niranjan Khatri, GM, Welcomenviron Initiatives, an eco-responsible initiative of ITC welcomgroup, “There is a cost overrun, which was 12% in the case of ITC Green Centre in Gurgaon.” However, power consumption has dropped by about 51% and water consumption by 40% at ITC. Khatri says the cost overrun for a similar project would now be 4-7%. Says Kalpana Jaishankar, Vice President, HR Operations & People Development, Patni, “though the initial cost of the project was 4% more than that of an ordinary project, we estimated that this extra cost would be easily

DARE/green buildings: cost concerns Building

Built-in Area (sq ft)

% increase in cost

Payback (Years)




CII-Godrej GBC, Hyderabad Wipro, Gurgaon




Grundfos Pumps, Chennai




Technopolis, Kolkata




Spectral Services Consultants Office, Noida




HITAM, Hyderabad




Source: CII

DECEMBER 2007 51



Wipro Technologies Development Centre, Gurgaon

recoverable within 36-42 months.” Patni’s campus in Noida saves about 30% water used in comparison to other regular building in same area and occupancy. Even for construction, no potable water has been used for landscaping. Only recycled water from the sewage treatment plant is used for cooling the tower makeup, flushing and irrigation. Bharadwaj too cites an example to show that developing a green building is not that costly after all. “In the case of Wipro, which was a regular building versus the Platinum rated building, the difference between the two was 6%. And the entire 6% was recovered

in about three years. After that it’s a free ride.” On the energy front, an A class building uses 240 units of electricity per sq meter per year, A Platinum rated building will use 100 units less. Meattle estimates a payback

DARE/LEED rating system: points Rating

New Building Existing Building

LEED Certified



LEED Certified Silver level



LEED Certified Gold Level



LEED Certified Platinum Level



DARE/LEED rating system: credits Features

New Building

Existing Building

Energy and Atmosphere



Indoor Environmental quality



Water efficiency



Sustainable Sites



Materials and Resources



Innovation and Accredited Professional points








period of 14 months given Delhi electricity rates of Rs 5.8 per unit (commercial). If you are taking up space in a larger complex, how can you go green? Bharadwaj has some advise: “Instead of wood on the walls or paneling, use bamboo. It is a rapidly renewable product.” He also recommends the use of recycled MDF or chip for tabletops, as 85% of the material comes from recycled stuff. Opt for a carpet made of recycled material, and use refurbished furniture. If everything is so hunky dory about green buildings, why aren’t property developers investing in it? Normally the developer does not pay for the services consumed in running the building. Owners and tenants pay for services like electricity and water. Also, when buying real estate, no one looks at the cost of running the complex. They look only at the immediate purchase price.

The Green Rating System Devised by the US Green Building Council, the Leadership in Energy and Environmental Design (LEED) rating system for green buildings has been adopted in around 20 countries. It evaluates ecological performance for the whole building based on various parameters such as energy and water efficiency and material used. Registration of your green building project with the Green Building Council is the first step towards getting LEED certification. LEED certification provides a proof about a company’s corporate social responsibility. CII Godrej Green Business Centre launched green building services in 2003. The Centre hand-holds projects going for green buildings, offering technical advisory services. It is involved in providing LEED rating facilitation and advisory services. LEED–India Green Building rating system, which came into effect from January 1 this year, is an accepted benchmark for the design, construction and operation of high DAR E performance green buildings.



What you sell may not be what they buy Sellers tend to get caught in the intricacies and details of what they are selling, forgetting that the buyer is making an emotional decision, an investment, or a statement about his self worth, and may not connect with the brand message /Rupin Jayal


e have gone from the Age of Reason to the Era of Emotion. In most walks of life, and especially in the corporate world, EQ often replaces IQ, relationships replace hierarchies and the ultimate goal (for some marketers atleast) is to transform brands into “Lovemarks.” Key point here – as can be seen from the quote, above, is that a lot of so called rational decisions made by consumers are actually driven by emotion. Our rational mind evaluates options and if it remains in control we procrastinate forever. Often the rational pros and cons seem so close as to make action based on reason alone, almost impossible. A decision does require a final leap of faith or belief or desire or any other motivating emotion. Many of humankind’s greatest leaps have been those of imagination and have required the ability to see beyond the logical (and what at the time seemed the most obvious). Heavier than air flight, the concept of the earth as a globe and not flat, horseless carriages, the internet, men on the moon, mobile telephony – look around you and almost everything you see would at some point of time seemed like science fiction created by someone with a poor grasp over sanity. Yet they are around us and are continually and profoundly changing the way we live, think and feel. 54


The essential difference between emotion and reason is that emotion leads to action while reason leads to conclusions (Calne, 2000) In fact, the ones who got it hopelessly wrong were those who predicted things to be impossible to achieve. Emotions have created pathways where reason presented insurmountable obstacles. And so it is with entrepreneurship. It is essentially a leap of faith. After all the studies have been done, the logical presentations made to various VCs and the plans cast, it finally boils down to the conviction and belief of an individual or a group of individuals and their ability to create something sustainable, different, meaningful and profitable. Yet often we forget the basic building block of emotional conviction when we go out to sell our products or services to other people. Suddenly from “people” they become “target markets,” “demographic groups,” “an audience,” or the ubiquitous “consumer.” In the process they are seen to be rational beings driven by reason and logic. They are researched, evaluated and placed into neat little categories with very pithy names like “savvy aspitrationalists” “traditional experiment-

ers” (an exaggeration but the reality is not very far from this) and so on. The problem is that more often than not the “consumer” is actually our neighbour, our cousin or wife. In other words, they are people and not some strange species created by a supercomputer. So they actually are heavily influenced by their children when buying cars; they do not always select the “best” product and they can change capriciously without warning. Sometimes their biggest drivers are boredom, ego or even temptation. And what they buy often has nothing to do with what many of us are seeking to “sell” to them. Recently, for a real estate brand, based on a series of interviews with potential consumers we arrived at this conclusion: Sell l

Right from the luxurious green townships to villas in the sky - Homes and living spaces

Buy l

A space where life is made


where a million stories are written


Triumphs celebrated


Tragedies averted


Moments enshrined for ever


Families created and life changing decisions debated


A dream realised, aspiration fulfilled

Where people within the industry saw monolithic creations in brick and concrete, those seeking to live in them saw a “life space.”


strategy/brands Similarly when talking about a motorcycle brand what marketers saw were huge numbers and ubiquity on the road. They saw hoards of riders moving out each day and celebrated this fact through large advertisements. However for each rider, this ubiquitous brand was the fulfilment of a dream. It was the culmination of putting together what possibly represented the single largest investment of his life so far and was an object of pride. He didn’t see the millions who rode it, he saw himself, the individual who had decided to trust this brand over the cacophony of competing claims of other brands and the advice of his friends and peers. It represented more than just mobility. It represented his belief in himself and his future (financing makes the purchase of a vehicle a very definite investment in the future). Similarly, when addressing a health care brand what the people who were seeking solutions from it were looking for differed quite significantly from what was believed was being “sold” to them: What is "Sold" l

Body "solution"


Weight loss deal




Regaining shape



What is "bought" l







Regaining control



This does not apply only to socalled consumer brands. Marketers of industrial products and services need to understand that despite the emphasis on standards and specifications the final decision is taken by a human mind. Hence, with one world leader in petroleum products and chemicals the key differentiator was not the specifications or products themselves but the feeling of trust that people awarding them contracts, felt for them. While the trust was partly

Human behaviour is heavily influenced by emotions, not solely by reason. Consumers are often highly emotional and intuitive in their behaviour, operating through the emotional centres of the brain, dictated by their “heart” or “gut feel” and often independent of conscious control. They operate on autopilot, pausing only when the emotional radar identifies something loved or different. If the foundations of consumer behaviour are emotional, so it follows that the strongest foundations of the consumer-brand relationship are similarly emotional. — Measuring Emotion - Lovemarks, The Future Beyond Brands, John Pawle, QiQ International Ltd, Peter Cooper CRAM and QiQ International Ltd, Journal of Advertising Research, Vol. 46, No. 1, Mar 2006 driven by their scale and control over every part of the process from extraction to delivery of the finished product, what really drove the feeling of trust was their legendary devotion to exceeding rather than just meeting standards. So what was actually being bought was better performance leading to a healthier enterprise and not just a chemical of a particular specification. In fact, when the seller acknowledges what the buyer is actually buying, it results in relationships that endure and do not break easily. This is something that luxury brands do understand very well. After all, if we bought a watch just to tell the time we would not be spending tens of thousands and even lakhs to do so. If we merely needed to cover ourselves, we would not spend large sums of money to keep the fashion industry afloat. If what we required was mere transportation, Porsche would not be possibly the world’s most profitable automobile company. If twowheelers were just a basic way to get from A to B accountants would not be tasting the forbidden fruit of rebellion by owning a Harley Davidson. And if cigarettes were merely tobacco in a

stick, the Marlboro man would not be the universal symbol of masculinity and Marlboro would not be amongst the world’s most valuable brands. In our desire to “sell” what we have worked so diligently and painstakingly to create, we should not become statisticians. After all the data and market figures, we must return to just being human beings again. There are many who are well equipped to provide all the rational data you need but you will have to decide what it really is that people should want to “buy.” The celebrated “new” Coke example has now become part of brand folklore. This dismal failure helped one of the world’s greatest brands to refocus itself on what people were really buying and not on what its closest competitor was selling. And it grew to even greater heights after this. Do a simple exercise. List down all the features of what it is that you sell. Now forget that you sell it. Become a buyer. Better still, just become an ordinary person and see what you would want to buy. It could transform your DAR E brand and your business. The author is Director-Strategic Planning at M&C Saatchi DECEMBER 2007 55



Picture a Good Business! Still fragmented and in a very nascent stage, the business of stock photography looks to have a good future in India

/Binesh Kutty


picture is worth a thousand words, goes a rather popular proverb. Look around you — the advertisement hoardings, the promotional emails, the corporate brochures … even the article you are reading right now. When one comes to think of it, the proverb does hold a lot of sense when it comes to advertising, marketing, promotions, announcements, editorial pieces, and such. It is overwhelming, the demand and consumption of pictures by various industries. It is said that the stock photography worldwide is a 2.5 billion industry, and it is only yet taking off in India.

What is stock photography? Stock photography, also known as image bank, photo library, comprises huge collections of photographs, illustrations, video clips, animation, etc managed by agencies (called stock agencies), to license out for specific usage. Erstwhile offline, this business has been around for several decades now. Even in India, more than 20 years back, there were offline agencies like Photo 56 DECEMBER 2007



Stock photography in India is still very fragmented and needs to be consolidated. However, India is a booming economy, and images are the backbone of the creative community; so the future looks very promising. — VIJAY CHINTAMANENI CEO, VISAGE IMAGES Media, Dinodia, etc who had their image banks. It was, however, only in the 90’s with the Internet boom, that stock photography actually started gaining ground. With digital media fast replacing traditional photographs, the early 90’s saw the emergence of many online stock agencies such as Getty Images (owned by Mark Getty), Corbis (owned by Bill Gates), Jupiter Media, (owned by Alan Meckler), etc. Evolving within itself, there was an offshoot business of micro stock photography, first started by IStock Photos, which came into being. Micro stock photography websites play on the volume of images. Hence are able to sell images for as cheap as $1. Comparatively, for the all-rights verified images at traditional stock photography websites, an image could cost as high as $200. Simply put, the pricing at traditional stock photography website is higher because all the usage legalities are taken care of for the buyer. At micro stock photography websites, however, since the images come in from both, in house staff and contributors from across the world – amateurs, hobbyists, etc, rights and

releases need to be properly verified and double-checked by the buyer.

Line of operation We spoke to various agencies operating in India, such as Visage Images (who handle Getty operations in India), India Picture (who handle Corbis’ operation in India), and Images Bazaar, to understand more about the business of stock photography. Their clients have a mix of creative agencies, publishing houses, corporate communication divisions and such. Interestingly though, all of them focus on one segment of clients above all others. Visage Images has creative agencies as their primary target group, while India Picture does a lot to service the editorial clients, and Images Bazaar has a strong focus on Indian photos. The nature of this business is such that trend tracking is a very crucial element. The agencies closely monitor the kind of images being used by their target group on a daily basis, besides having sources to report them on what the future trends will be like. Besides this, a simple research is done to identify what are the major events and ac-

tivities slated to happen in different verticals and industries. All of the stock photography agencies have a good lineup of staff, which includes photographers, photo editors, art-directors, models, stylists etc. Besides this, they also hire freelance photographers. The agencies identify the kind of photography a photographer specializes in and then give out assignments to them. However, since there is a lack of market awareness about the business, not all photographers approach these agencies to offer their services.

Strategic partnerships Stock photography websites, as a business, kicked off in the early 2000’s. Being an online business, the reach had to be at an international level. What better way than to tie-up with the biggies abroad, which had been in the market for a long time before them? Visage Images went on to team up with Getty Images, and India Picture did the same with Corbis. When asked about the benefits of tie-ups with an international brand, Dushyant Mehta, Founder of India

Internationally, the ratio of stock photos usage to assignment photo shoots is 30:10; in India, it is still 10:90. This industry is about Rs 20-25 Cr industry now, and has potential to go up to Rs 60-65 Cr — DUSHYANT & HEMANT MEHTA FOUNDERS, INDIA PICTURE DECEMBER 2007 57



Roughly about 30% of the images we use are sourced from stock photo agencies, and this is at times to save costs, and at times due to time constraints. — SABUJ SENGUPTA SENIOR CREATIVE HEAD, JWT Picture, said “Our learning curve has been shortened drastically with the tie up with Corbis. We have to maintain the same standards as them, and then there are certain processes that we would have never been able to create without their partnership. Another important factor is the market intelligence provided by them. Most importantly, because Corbis is a well-known and accepted brand, representing them in India also helps a lot in capturing the market.” Vijay Chintamaneni, CEO of Visage Images, spoke on similar lines, but had more to say; “We tied up with Getty because they are the world’s best in stock photography… Besides other things, we are running our business on the technology provided by Getty, which really helps.” He adds, “Piracy, Image theft, Copyright violation, etc are very difficult problems to tackle. Our tieup has also helped us in dealing with this. We use the service of a company called PicScout, which continuously scans websites in our region of operation (SAARC), and identifies possibly stolen images and informs us about the same.”

Scenario in India Sandeep Maheshwari, Founder of Images Bazaar is a fashion photographer and hence understood the intricacies of the trade. For him, the synergy came through, which consists of database of over 20000 models. According to Maheshwari, “The potential scope for stock photography as a business as of now is not much, but we are looking forward to open up new avenues for the entire 58 DECEMBER 2007

industry.” Images Bazaar is touted to have the largest collection of creative images with Indian models in them. “Stock photography in India is still very fragmented and needs to be consolidated,” adds Chintamaneni, “However, India is a booming economy, and images are the backbone of the creative community; so the future looks very promising.” Mehta helped us put numbers to the space of business, here and internationally, “Outside India, 30% of the images used by clients such as creative agencies, publishing houses, and corporate communication divisions, are sourced from stock photo agencies,” says Mehta, “In India, currently, the usage ratio of stock photos to pictures from assignment photo shoot, is 10:90. Right now, I think this industry in India can be valued around 20-25 crores, while it has a current potential of about 60-65 crores.” As for what is the hot-selling image category in India, all the players zeroed in on the same category – lifestyle images, thanks to the retail boom. To find out the side of story from the heaviest users of stock photos, we decided to contact a couple of top advertising/creative agencies. “We do use a lot of stock photos for servicing our clients,” informs Sabuj Sengupta, Senior Creative Head at JWT, “Roughly about 30% of the images are sourced from stock photo agencies, and this is at times to save costs, at times due to time constraints, and such. More often than not, we do find what we are looking for.” Another Creative head at a leading creative agency, who spoke to us on the condition of anonymity, says, “The quality of India relevant im-

ages with Indian stock photo agencies have to improve a lot. Also, the pricing for the quality of images being offered sometimes is outright absurd.”

Challenges to face Because of the lack of awareness in the market, photographers in India still have not started seeing stock photo agencies as an industry that they could cater to. There are different types of photography, stock photography is one such type, and requires special skills, which Indian photographers currently are not equipped with. Some of the photographers who do sell their photos to stock agencies expect an instant return, and feel let down if the photo does not sell for extended periods of time. It is difficult to make them understand that it is up to the buyer to pick the best picture for his use, and that just might not be theirs. Image theft is also a huge problem in India. According to one of the stock photo agency owners, who did not want to be quoted on this, “There have been many cases where really reputed magazines, and newspapers were found using stolen images. Many a times this turns out to be a genuine mistake of the journalist or designer not knowing the copyright issues related to the image being used.” However, for lesser known editorial and creative material, tracking becomes a Herculean task. If some shop owner in some remote town is using the image for his promotions locally, it is almost impossible to stop them. All the players know that piracy and image stealing is something that they have to DAR E live with.



Can Indian entrepreneurs win in China? In the medium run, it will become harder to build a successful high-growth venture without a significant presence in China /Philip Anderson and Aparna Dogra


or many years, journalists wrote dozens of stories pitting India against China. Which would grow faster? Which would emerge as the innovation leader to rival Silicon Valley, and which would produce more of the next Global Fortune 500? Which would in the long run produce more successful new enterprises? For Indian entrepreneurs, today’s question is not whether venture capitalists or foreign companies should choose them over their Chinese counterparts. Handicapping a presumed rivalry between Chinese and Indian entrepreneurs made more sense when both were primarily competing for Western customers and Western investment. Today, however,

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both India and China are the fastestgrowing sizable countries in the global economy. Large India companies such as Infosys have concluded that they must be strong in China, while large Chinese companies such as Huawei have concluded that they must be strong in India. For entrepreneurs, the same challenge is paramount: China is such an important market and such an important source of talent that Indian growth ventures ignore it at their peril, and vice versa. In the

medium run, it will become harder to build a successful high-growth venture without a significant presence in China. Why?  China is one of the world’s largest and fastest-growing markets in many sectors. Companies in sectors ranging from mobile applications to automotive parts to industrial fittings will lose advantages of scale to rivals if they cannot win a foothold in China.  Chinese suppliers are fiercely competitive and are sure to attack Indian markets, once they absorb the runaway growth that most struggle to manage in China. The best way to learn how to compete with them is to engage them, at least to a limited extent, in the most competitive arena.



To scale, Indian growth ventures must serve global customers, who do not want to hear that their suppliers, partners, or channels cannot help them in China and know nothing about China.  Innovative business idea created in China are often more relevant to India than are ideas created in the West. Many of the same challenges entrepreneurs encounter in the Indian market are also found in China, but do not characterize Western markets. Examples include keeping logistics costs down over a wide geographic region with marginal infrastructure; serving a vast rural population; coping with slow-moving government bureaucracies; retaining talent when other opportunities abound; and so on. Entrepreneurs who combine ideas derived from operating in both India and China are much more likely to innovate successfully. To date, only a handful of Indian entrepreneurs have opened operations in China, so little knowledge has diffused within the venture community about when to enter and how to win. We interviewed three people who have built fast-growth companies that expanded into China, in order to bring back insights, lessons learned, and advice.  Alok Kejriwal started Contests2Win in 1998 and launched a Chinese subsidiary, Mobile2Win, that was acquired by the US-based Walt Disney Group in 2006. One of the few dotcom-era enterprises to thrive for a decade, Contests2Win develops and administers contests and games for brand owners to promote

customer connection and involvement. One of India’s best-known online brands, it operates a popular Web site where users can enter thousands of contests and games.  Ranjit Singh was part of Mobile2Win’s startup team and headed its international business from a base in Shanghai. After the Disney acquisition, he started Fugumobile in Shanghai, which he leads today. Fugumobile not only develops and distributes mobile games and applications but also acts as a fullservice mobile marketing agency, providing entire marketing campaigns across various mobile platforms from concept to execution.  Serial entrepreneur Mahesh Murthy started Pinstorm in 2004 as a search engine marketing company based in Mumbai. Pinstorm recently opened an office in Beijing as part of its drive to become one of the world’s leading digital marketing companies. Pinstorm has pioneered a pay-for-performance business model and garners 60% of its revenues from outside India. Contests2Win was launched in August, 1998 when Alok Kejriwal left his family business (Hindustan Hosiery) to start India’s first contest site online with a budget of 5000 rupees. The company went to China in order to grow Contest2Win’s business when the Internet business in India flattened after the dotcom bust in 2000. “We were hearing rave reviews about China and how the mobile business there was picking up,” he recalls. “China had a positive buzz then and our investors, Softbank, wanted us to transplant

our model to China, Japan or Latin America. We felt the Chinese were very similar to Indians in the sense that they were willing to spend a lot of time winning small prizes in contests, so we launched the business there as Mobile2Win.” The company relied heavily on Softbank to smooth its entry. “We did not really think too much or research too much,” Kejriwal says. “Softbank showed us the way, and we decided to take the bull by the horns.” Contests2Win sent a core team of seven or eight people to launch the business, using executive recruiters to grow the team through local hiring. “Since we had well-established relationships with leading multinational brands in India, these companies recommended us to their counterparts in China,” Kejriwal notes. In this way, the company was able to start growing its sales while it was still finding its feet in a new country. One of the members of the initial band of Indians sent to build up Mobile2Win in China was Ranjit Singh. Originally, Singh packed his bags planning to stay for two months until a local team was hired, leading the international business. He stayed with the company through the 2006 acquisition by Disney, then decided to put to use his experience and contacts by starting his own venture. “I believed that I had a huge opportunity to start a solid business here, which would be a fairly successful growth venture even if it didn’t become a $100 million company,” he states. Fugumobile was set up as a mobile game distributor and service pro-







vider based in China with markets all over the globe, for example in the US, Russia and Greece. It soon branched into working with consumer brands on wireless gaming campaigns. “Consumer brands are excited having visual interaction with their customers, and since advertising agencies still do not understand this space, they are happy to work with us,” Singh says. For Kejriwal, access to China’s market was the main reason for going there, but Singh places more emphasis on the advantages of using it as a base for building a global enterprise. “What keeps us in China is the huge cost competitiveness of operating here,” he comments. “Our costs would be three times more if we decided to move to the US, and the access to talented manpower is extremely high.” Like Contests2Win, Mahesh Murthy’s Pinstorm went to China primarily to gain access to an important market for his enterprise. “Pinstorm is a global company and China is a large market,” he says. “We have to go there some time or the other so we thought, why not be opportunistic and go sooner rather than later?” Unlike Kejriwal’s venture, how-



ever, Murthy’s entry path was more gradual. He relates, “I’ve lived in Hong Kong for 4 years and handled advertising clients for the Greater China market. Afterward as Pinstorm, we attended online marketing conferences for a year or two in China, meeting clients, other agencies, having discussions with people who moved there, and learning what not to do and what to do. Finally, we took the step of identifying a young team in China.” All three entrepreneurs had to decide where to locate their initial office in China. Kejriwal chose Shangahi for Contests2Win, explaining, “Since most consumer goods companies with wellknown brands are based out of Shanghai, we decided to go there. Shanghai is very similar to Mumbai which thrives on a great business ethic. Beijing is so much similar to New Delhi, which is a good place to be based in if your industry requires a lot of government clearances."

The location decision was fairly simple for Singh, because he was already living and working in Shanghai when he started Fugumobile. Echoing Kejriwal, he says, “Shanghai is like Mumbai, where most of the FMCG companies are headquartered and the advertising agencies, who we work very closely with, are also concentrated here. Shanghai is a truly cosmopolitan city and it is easy to find talented people here.” Murthy, on the other hand, faced a more complex decision because the clients for Pinstorm’s digital marketing services include many technology-intensive enterprises. He remarks, “For us, it was a toss-up between opening our first Chinese office in Beijing or in Shanghai. Finally we opted for Beijing for a few reasons. One, Beijing is the Silicon Valley of China, with the tech / internet companies – our low-hanging fruit as potential clients, so to say, being in Beijing. Second, Beijing seemed less expensive than Shanghai in terms of infrastructure costs. And third, the team we hired were from Beijing and most familiar with that area – so we decided to start with an office


opportunity/INSEAD in Beijing and then, as we grow, look at other locations.” Murthy agrees that Indian entrepreneurs who are following big multinational consumer goods companies will have to give Shanghai strong consideration. “The traditional brand marketers are in Shanghai, so as we grow, it’s likely we’ll have an office there too,” he says. Asked what are the key cultural differences between China and India that Indian entrepreneurs should understand, Kejriwal replies, “Indians think a lot and do little while the opposite holds true for the Chinese. The Chinese are very action oriented people. They brood very little over their actions and move forward quickly.” However, that does not mean the Chinese are necessarily more direct than Indians, as for example many Americans are. Notes Singh, “The Chinese are most non-confrontational and it is almost impossible to get a ‘no’ from them. A lot of companies waste a lot of time not understanding the cues when someone is dithering on decisions. Most times people make excuses when they’re actually not committing. In China, you never have a ‘bad meeting.’ When you meet someone to pitch a business or a service, most times you will get the impression that the party on the negotiating table is extremely keen to work with you but when you try to follow up, you’ll notice that the person who appeared to commit is missing or is making excuses.” All three entrepreneurs say it took them a while to understand differences in the business environment, over and above cultural differences. Kejriwal comments, “China is 360 degrees

different from India, so entering China with a rigid mind set and sticking to your own Indian philosophy can cause dissonance in your team. For example, giving gifts to business partners is a done thing in China, and when I objected to it, initially that did not go well with the local team. On the other hand, going out for hotpot meals with your local team was something I had to adapt to but that really helped in building team spirit in the company. During negotiations, I realized that most cards were not shown on the negotiating table. It seemed that business partners and even investors had their own agendas in China, and I never really grasped the true “win-win” idea in most negotiations.” Singh’s years of experience in Shanghai helped him adjust his expectations about how difficult it would be for an Indian to launch a venture there. He says, “It takes a lot more time to start a business in China than in India. There’s lots of paper work that needs to be done and it can take sometimes up to three months. However this is changing now with local companies similar to Chartered Accountancy firms in India, providing professional help to get this done, and it is easier to get local help for the paper work. The regulatory environment also differs according to the type of industry that you plan to enter; for example, media is still very closely watched by the government so the regulations tend to be stickier.” Entrepreneurs who seek to raise funds in China face additional hurdles, Singh adds. “As an Indian entrepreneur in China, one is almost in a no man’s

land, when it comes to getting funded,” he says. “You’re neither seen as an Indian enterprise nor a Chinese one. Most Indian VC’s look at India-based companies while Chinese investors are unsure of the value proposition that Indian entrepreneurs present to them. However, sometimes this can work in your favor when the investors are American or European and they’re looking at investing globally in emerging markets like both China and India.” Murthy concurs, but adds that entrepreneurs shouldn’t let the differences obscure basic similarities. “I feel the Chinese entrepreneur has more governmental unpredictablilities to face than the Indian one, while the Indian entrepreneur has more funding problems to face than his Chinese counterpart,” he summarizes. “But an entrepreneur in each country learns to deal with the constraints of his country and markets, and in both places they face lack of capital, exploding salaries, and antiquated governmental regulations.” For this reason, Pinstorm’s experience growing up in India may give it advantages over ventures started in many western countries, since their founders are less familiar with such challenges. Asked to summarize for DARE’s readers what he knows now that he didn’t know when he entered China and what he would do differently, Kejriwal comments, “I now feel that to truly succeed in China, you have to be Chinese. Only when we got a Chinese CEO for our company, did Disney look at us seriously. China has its own DNA, its own culture and its own unique social fabric – I haven’t seen any country which could




be considered similar. I feel I never really completely understood China. I felt unsettled when contracts were drawn and I wonder how many of them would have legislative protection if any of the partnered reneged on them.” On the other hand, Kejriwal argues, Indians who go to China and integrate locals into their enterprises can vastly multiply the value of their businesses. He elaborates, “You could build up your business to a tremendous scale in China if it works for you. Entrepreneurs are far more respected in China than in India, and people are always in a ‘deal mode,’ trying out new stuff all the time. It is an inexpensive market to operate in and people are phenomenally talented. It is one country where you can find anyone with any talent.” Securing that talent will not be easy for most Indian entrepreneurs, Singh counsels. He says, “I did not know how difficult it would be to get talented manpower here. While in India, you rely on the top 10 universities as filters for recruitment, we had no idea about the numerous institutes and colleges mushrooming in China. Furthermore strong informal networks in India serve as great means to vet the right candidates. I arrived in China with very little knowledge about the right places to find talent and the means to vet people.” Singh agrees with Kejriwal that employing Chinese talent is essential, but believes that an all-Chinese team is not the best solution for an Indian venture 64



that deals with multinational clients. He explains, “Like most startup founders I believed that one needs local Chinese managers in key positions in the team to be successful. I have learnt that while having a local Chinese partner helps, it is important to have a team with different nationalities. Most FMCG companies have their senior management driven by expat managers. Having an all Chinese team sometimes does not help when one is pitching to these expat managers because of language and cultural differences. Sometimes locals do suffer from lack of confidence while dealing with expats.” An additional lesson Kejriwal learned is that an entrepreneur should plan ahead not only how to enter China but how to exit if and when the time comes. He rmarks, “I realize now that exiting a business in China is as difficult as entering one there. If entrepreneurs like me who are in the internet and mobile business are planning a successful and profitable exit, the regulations that one has to comply by can be very frustrating. The whole process of identifying a buyer and then completing the sale process was very complicated.” Asked what advice he would provide to Indian entrepreneurs pondering their China strategy, Murthy counsels, “Go there today. Don’t waste time. Learn about the market first hand – no book or magazine can tell you things only you can learn on the street - just like no magazine article can prepare you to start a business in

India. The opportunity is huge – and you can surmount problems. Just get there soon! If I could go back and do things differently, I would start even earlier, make mistakes sooner, and succeed sooner.” Kejriwal agrees, saying “China is a phenomenal market and one should try to start a venture there at least once in their lifetimes. Choose your partners carefully and prepare to expect the unexpected. Meet with owners of businesses who are not traditional Chinese and understand the pleasure and the pain of doing business in China. Don’t get fooled by the numbers in China. Finding talent is easier there and motivating people is not difficult.” Murthy also emphasizes the importance of patience, commenting, “We grew faster from zero in India, and we have learned to be more patient in China. Singh adds, “One should be extremely open minded before coming to China. It helps to come with a sense of adventure. If you are rigid in your outlook and expect the country to be run like India, you will be miserable. You must come here willing to adapt to the Chinese way of doing business and do not try to force your processes and your way of working. It is also good to set your expectations before entering India. Do not expect a pot of gold waiting for you with 1.3 billion people ready to buy your product. China is an extremely fragmented market and it takes some time to cross all initial hurdles.” Lessons learned from these early pioneers can be invaluable for the next wave of Indian growth companies looking to expand abroad. Experience suggests that India’s venture leaders will have to fight the tendency to wait until conditions are right. Because the path of growth in China can be unpredictable, starting down the learning curve in a limited way by hiring locals and blending their talents with Indian strengths appears to be the best DAR E way forward. Philip Anderson is INSEAD Alumni Fund Professor of Entrepreneurship at INSEAD and director of the 3i Venturelab. He is also director of INSEAD’s Rudolf and Valeria Maag International Center for Entrepreneurship, where Aparna Dogra is head of research projects.



Opportunities in mobile upstream More spectrum means more bandwidth for mobile data. This in turn will lead to new avenues opening up for content companies and application developers /Sreejiraj Eluvangal


ven as the world marvels at Indian ingenuity that has converted the lowest tariff market in the world into one of its most profitable, the performance of the country’s wireless data market has been quite the opposite. India’s wireless data market has been languishing. While 20% of wireless revenues in China comes from data, in India these services account for only around 7% of total revenues. Compared to this, operators such as O2, NTT DoCoMo and 3 get more than 30% of their revenues from such services. The government’s move to allocate fresh spectrum, as much 100 MegaHertz to the existing 35 Mhz, may be just the thing to get this segment kick-started. 3G and high-speed data services with this spectrum will be like construction of a new high speed expressways, direct to wireless consumers, where there was only a jungle-trail earlier. This new road will open up opportunities, both for content as well as applications providers to reach out directly to consumers without having to go through, and pay commission to the operator.

Mobile VAS In India - the reality Indian value added service industry still revolves around voice and operator-hosted services. According to Gartner, the Indian mobile value added industry was worth around $ 858 million (Rs 3,400 crore) during 2006. Going by the reported revenues of mobile operators so far, this is likely to grow to around Rs 5,850 crore this year - about 9% of the total revenues of Rs 65,000 crore for the wireless sector this year. While 9% may seem decent, the fact is that most of the growth has come from voice-based services such as caller tunes which are essentially on-deck or operator add-on services. Voice-based services, including all the variations such as caller tunes, dial-asong and enquiry services, contribute around 22% of the total revenues of the segment. Another big chunk of the revenues is contributed by another operatorbased service - SMS. Such services, including both the normal person-toperson messages as well as the special or value added SMSes sent to shortcodes, contribute another 56% of the total VAS revenues in India.

Indian VAS Market 2007



Packet data 1300

DARE estimates, all figures in Rs Cr

66 DECEMBER 2007





Thus, around 78% of the VAS revenues is split between voice and SMS services, neither of which can be launched without the permission and co-operation of the operator as they require special infrastructure and special SMS numbers. Today, operators are the only return channel for revenues - customers pay for such such services by being charged at a higher rate for messages and calls. Thanks to this, either such services are launched by operators themselves, or they charge large commissions, sometimes as high as 60-70% of the charges. Not surprisingly, the prices for voice and SMS based services remain high and demand is constrained. “Our pricing freedom is impacted by (operator) commissions,” says Viren Popli who heads the Mobile Entertainment division of STAR India which has its own short codes and phone lines for audience participation services. The remaining segment - services delivered on the data network - is the only one where a company can hope to directly reach out to the customer. As data connectivity directly plugs in the mobile user to the internet, the scope for legitimate operator intervention is almost zero – like your broadband provider cannot demand a commission every time you make an online purchase. However, this segment is still tiny, around Rs 1,300 crore this year - about 2% of the total amount that subscribers pay to the operators. Even within this tiny fraction, about half is comprised of access charges paid by the customers to access the internet or other servers. Thus, the current addressable market for an operator-independent content and applications business is just around Rs 650 crore, or 1% of the total wireless industry.

DARE.CO.IN The Spectrum Bottleneck Yet there are many who strongly believe in the potential of the sector. Sanjay Sinha is an ex-silicon valley technology professional who came back to India around a year ago, eager to take advantage of the burgeoning mobile users and the untapped data services. Having done some basic market testing in other markets, Sinha launched a mobile streaming service for mobiles called Airchord with an SMS short code for new users to sign up. All you had to do was to send a text message to 3030, download and install a programme by clicking on the reply message and you were all set to listen to hundreds, if not thousands of songs streaming from Airchord servers in India and the US. Sinha wanted to take the model ‘pay’ later by requiring users to pay by credit card on the company’s website. However, he soon stopped advertising the service and after a few months, pulled the plug on the SMS short-code too. For those users who downloaded the programme during the early days, the service is still working. Says Sinha who is planning to relaunch the service, this time, in cooperation with the operators. “The operators have to have better bandwidth management. A lot of bandwidth is now set apart for high priority services like serving corporate clients using wireless email or for delivering the operator’s own content services. This restricts the bandwidth available for open services like independent streaming services”. Says Popli of Star, which independently launched a service a year ago to let users download and watch minutelong clips of its television content at Rs 30 a month: “Given the present data connectivity, we cannot hope to deliver long clips. You start downloading a long clip and walk a few steps and suddenly it is aborted because the connectivity is gone.” In a market where subscriber numbers are exploding and operators are going all out to reach new areas before competition, data connectivity has taken a back seat. Apart from clearly lucrative services like the operators’ own downloadable content and enterprise services like push-email which 68 DECEMBER 2007

opportunity/wireless offer assured returns, operators have been reluctant to invest in allocating more spectrum for data connectivity. Given that demand for voice is yet to be met fully, operators are yet to invest heavily into data. Services such as Airchord’s require a constant bandwidth of between 16 to 40 kbps while most cellular networks manage around 10 to 15 kbps during the day-time in most places. While connectivity improves during off-peak hours, it varies from one area to another. Hence, Sinha’s new streaming service will be invitation only, to make sure that those who sign up get a minimum level of bandwidth and service. “The market will change only when 3G comes,” says Samrat Majumdar, head of research & product development at mobile applications developer Netxcell. Among Netxcell’s many ‘white label’ products is a streaming video solution, complete with fulllength movies that users can watch on the mobile. “When we went to the operators and showed them the demo, they said, ‘it’s fine for one person, but if 20 people start using it in the same cell, our network will get choked,” And the project went back into the bag!

The 3G effect “More spectrum, especially for data services like 3G, will have a far reaching impact on the industry,” says N V Subba Rao, president and CEO of solutions developer Tanlamobile. Rao sees the focus on voice slowly disappearing as competition erodes the relatively fat margins, forcing operators to invest in data and related services. “When more and more operators come into the market, the voice market will become increasingly commoditized as tariffs fall further. Operators will have to think of other ways to differentiate themselves; there is only so much you can do to value-add when you are just connecting one person with another using a voice link,” he says. “More and more, for voice, the operator will become a dumb pipe.” The current stalwarts of the VAS industry too are aware of the sweeping changes that await the sector in the

coming months and years. “We realize that the game is about to change, and only the agile will survive,” says Manoj Dawane, chief executive of, one of the pioneers in distributing rich content such as wall-papers and music clips to mobiles. It was content aggregators like Mauj who first spotted the potential of the mobile-phone as a consumption platform for rich media. For now, operators like Mauj have carved out a business for themselves by first buying content-rights, packaging it for consumption on the mobile and negotiating final access and billing with telecom operators. Here too, operators kept 60-70% of the price of the content since it was the sole billing billing agent and could allocated better data connectivity to download services launched with its support (the walled garden). On the other hand, content companies did not mind settling for the 15% of the user fee as the incremental cost of giving the rights to companies like Mauj was zero. Besides, the market itself, at a few hundred crores, was too small for the mainstream content companies to start worrying about royalties. The aggregators, who did all the work in the middle, got around 15-20% . Dawane sees the effort by Star and Zee, which has spun off a subsidiary for reselling its content to mobile phones, as the beginning of the fight between those who own the content and those who own access. “More data connectivity will increase the consumption of content on mobile. This will expand the market enough for the content companies to reach out to the customers on their own. Although there is the risk of disintermediation is there,” he agrees. “When consumption hits sufficient volume, the natural course of action for content companies would be to bypass those in the middle, including the operator,” says Rao of Tanlamobile. “Besides TV, print and the internet, they will open a new store-front in wireless and small companies in the middle will get caught between the operators and that of the big content companies,” he points out.


opportunity/wireless New Opportunities Yet, the death of the operator-controlled, aggregator-mediated content will also be the birth of new opportunities - in technology, content and banking. With each user getting data bandwidth of 40 to 120 kbps through technologies like 3G and Wimax, media consumption including streaming video, will become a smoother and friendlier affair than it is now. Dawane already sees the beginnings of the transformation in the recent deals that his company has been inking. “If the market expands and the reseller opportunity ceases to exist, we will become managed services and technology partners to anyone who wants to reach out to the customer. Thanks to our platform and technology experience, we are today in a position to go to any big content provider and tell them what a big opportunity they are sitting on,” he adds. “For example,we have recently inked a deal with Eros studios to repurpose their content for the mobile and we are in talks with three more big studios. We also completely manage ESPN’s direct-to-consumer wireless portal on a managed services model.” Sanjay Sinha of Airchord has another take on the opportunity. He points out that while content owners may indeed try to set up their shops in the wireless world, that is unlikely to be the end of the story. “Look at what happened on the internet. The biggest content platform is not the traditional broadcaster, but youtube,” he says. Sinha believes the content story on the mobile internet will be written by the users themselves, rather than by big broadcasters or studios. Sinha’s content database, therefore, has features which make it easy for users to upload their videos and pictures or even broadcast themselves live to anyone who wants to watch. “If you want to charge people for watching your content, even that is possible,” he says. “There is no reason why a traditional media company cannot use it, just like a small user would,” he adds. With better data connectivity, applications developers will be able to

2007 first-half wireless data revenues by market









Source: Chetan Sharma Consulting, all figures in Rs Cr * DARE estimate assuming total wireless rev at Rs 30,000 crore for H1, sms & packet data rev at 7%

design software that allow users to interact with each other over video or voice, paying the operator only for the data consumed. In many markets where high speed wireless data is a reality, enterprising software companies have launched voice and video calling software that completely bypass the operators’ billing mechanisms and instead connect users on their data connection, bringing down their bills drastically. Start ups like Israel-based Fringland and Netherlands-based Nimbuzz have already got a jump start in the business, with software that diverts normal phone calls to the data network cutting down monthly bills. Since 3G and Wimax will open up a strong channel for third parties to deliver their wares to the consumer, there will also have to be a strong reversechannel from the consumer to the content or the application company to complete the loop. Both reverse channels - advertizing and subscription fees - are yet to be effectively organized in the wireless world, promising a multi-billion opportunity for applications companies. For example, due to the small size of the display, traditional banner ads and even text-ads may not work, opening up opportunities for companies to come out with a more suitable alternative. “We are working on it and you can soon expect an announcement,” says Dawane of Mauj. Those who do not want to be part of Dawane’s advertising platform may do

well to listen to Probir Roy of Paymate a mobile payment solution. Roy’s firm is just one of the many trying desperately to patch the reverse-channel of payment. “A mobile payment will have to convenient and cheap, allowing the user to make multiple payments, including very minor ones, through the day,” says Roy. “If it requires me to enter a 16 digit number or even a username and password everytime I want to pay five Rupees to for a song I want to download, it may not work,” he sketches the agenda. On this front, however, application developers are on a much stronger footing than the ones who developed the closest analogue to a mobile payment solution - the online payment gateways like Paypal. Since the phone is a more private instrument compared to the PC, with at least two unique identification numbers including the users’ phone number, Roy sees the evolution of cheap and convenient payment solutions. “If you are trying to download or purchase something from a WAP site, the site automatically knows the identity of your phone. So chances are that you won’t need to through a cumbersome process of authenticating your identity and may be able to make small payments with just a click,” he adds. With a similar product, Paymate has tied up with major banks to enable customers to link their phone number with their banking account and then use the phone to DAR E make payments. DECEMBER 2007 69



Magic from waste Even as he converts waste threads into rugs that adorn the houses of the rich, Haji Qamru-u-deen fights a daily battle to make ends meet /Shilpi Kumar


t sixty- five, Haji Qamru-u-deen should probably be thinking of retirement. But that thought has probably never crossed his mind. His Galib Handloom & Handicrafts may look like any of a million other small weaving establishments across the country, but the products are not what normally come from a regular weaver. His family had been weaving for about fifty years, but about 12 years ago, Qamru-u-deen decided that he had to do something that would set him apart from the million others who make their living out of weaving. And what did Qamru-u-deen do? He started using waste threads from textile

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mills as his raw material! With factory wastes purchased for as little as Rs 50 a kilogram, Haji weaves doormats, seat covers, bed sheets, curtains and rugs. "Sometimes a particular material is not enough to make a whole piece, in which case we combine two different designs that complement each other,” he says. His work is not only unique in terms of style, but also extremely soft and good for daily use and that can be hand washed. The price of his products ranges from Rs 15 to Rs 500. “I know I have no competitors; in Delhi at least” he claims confidently. Qamru-u-deen has several workshops close to his house in Rajiv Nagar,

where he has about 25 workers assisting him. Most of them are young women, providing helping hands for their families or even widows trying to sustain a livelihood on their own. Training for these workers lasts for about 15 days to a month. “I pay them on a weekly basis, Depending on the amount of work they do” says Qamru-u-deen. “On an average, it comes to about Rs 3,000 a month per worker." Besides the workers, his family of five, including his wife, a daughter and a son, and even his grand daughter assist him. Qamru-u-deen’s products are bought by wholesalers who then sell it in places like the famous Chandni Chowk.


society/crafts Quite a few times, he has even had foreigners doing business with him. The only time Qamru-u-deen deals with customers directly is when he comes to exhibitions like the India International Trade Fair. One would think that having to spend so little on raw material and having a unique product would ensure a very profitable business for Qamru-u-deen. However, having a unique concept is just not enough. “Those who buy my pieces calculate every single penny I might have spent on the piece, and eventually only end up paying for the raw material and the labor I put in. After paying the workers, I am barely left with Rs 5,000 a month to run a family of five,” he says. If that was not bad enough, when Qamru-u-deen does interact directly with customers, he sometimes experiences losses. “I had set up a stall in Dilli Haat last month, which didn’t prove to be profitable at all. I got a stall right in the back, where people easily missed it. I only ended up selling pieces worth Rs 20,000, from which Rs 10,000 had to go just as payment for the stall. I had to

pay for food and transport separately. His experience has apparently been similar at IITF this month. “because again, I have been given a stall that is towards the inside, where people hardly come.” Ask him, what has limited him from expanding his business, and he smiles a wistful smile. “Who doesn’t want to be more successful? Like others, I also wish I had my own showroom but lack resources to set up one. Many a times, I cannot even avail of loans, because of the criteria they have set. I was de-

nied a loan because I did not stay in a government colony in Yamuna Vihar, where there is the office of the Registrar Cooperative Societies.” Qamruu-deen has just been granted a loan of Rs. 50,000 but as he says, “It is just not enough.” Qamru-u-deen’s concept may be unique and his products may be different, but he continues to battle the same issues that plague millions of handloom weavers across the country. Handloom is the largest economic activity in India after agriculture. But competition from power looms, reduced budget allocations, and ineffective implementation of schemes and policies are making weavers face severe crisis. Despite various schemes like the Handloom Village Development Scheme and the Workshedcum- Housing Scheme, to name two, the economic condition of weavers still leave a lot to be desired. According to Qamru-u-deen, “These schemes lack clearly defined objectives and are often quite vague. People who have the money end up benefiting from them and a lot of times we are not even aware that such schemes even exist! Policies and schemes need to be more transparent and it needs to be ensured that weavers are aware of them.” D A R E DECEMBER 2007 71

DARE.CO.IN back, what were the factors that helped you get where you are now? Looking I am a very God fearing and a God loving person. I would literally say that everybody works very hard, but I truly believe that there is somebody up there, divine intervention, which really helps you. It makes sure that you are able to tell what is right from wrong, and try to utilize your mind to take some sensible decisions. So that is one part of it, which I give a lot of credit to. The other is of course, again in order of priority, the encouragement that my parents gave to me to do what I felt like doing. We had a transport business that I could have easily joined. But my Dad had also bought a cinema property in 1978 called Priya. So when I could not find my feet in the transport business, he was very open. He said, “Ajay, do what you feel like.” Then, in 1990, I tried to upgrade the cinema, added some new sound equipment etc. As luck would have it, people liked the idea, and they said that yes there is a positioning for a Hollywood cinema, which has got good seats, good sound and everything. From there, I was very keen that my company should not become a mom and pop operation. I should have a business that is something I enjoy, and make it scalable. In India, there is inspiration all around. There are some great business people, who I looked up to. Once it was decided that I am going to be a businessman, I said to myself, “Who are the people who I would like to admire and

entrepreneur of the month aspire to be like?” There is the Tatas, Birlas, Sunil Mittal, NR Narayanamurthy, Azim Premji… there are so many inspirational business people that you see around. Then you say, “Okay, this is my chosen field. Can I also do something in my chosen field, and make a difference.” I think, that is one of the things that drives anybody. You need to be focused, on what you feel you have a connect with. My Mom, who is a huge inspiration, says, “If you do something with sincerity, and with passion and integrity, chances are that you will get recognized. But the moment you are fooling yourself, you will not get the results.” I still do not think, that there is a big deal that has happened. I still think that the PVR brand, and our team has got far more potential to do many more things than what we have achieved so far.

At the time when Indian consumers were grumbling about the state of movie halls and rise in ticket prices, how did you gather the courage to go against the pattern? See, I was just depending myself on what I enjoyed doing. That was one big factor. And second is that, in the west, we saw the multiplex culture being accepted very well by the audiences. Also, I saw the Indian consumer is mad about movies. So, if you put everything together, I felt that 72



AJAY BIJLI From decking up a single-screen cinema hall back in 1990, to a successful chain of multiplexes viz. PVR. It has been more than a decade since he has been doing something or the other in the field of movies – the one thing that interests him the most. In December 2007, with the release of Taare Zameen Par, an Aamir Khan Production, he will have launched his own motion picture banner. The person dubbed as the Multiplex Baron, Ajay Bijli, spoke to DARE on what drives him.



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the Indian consumer is not going to let me down. If I find the right location, if I make a multiplex which is better than, or at par, with what is happening internationally, and play movies while giving good customer service, chances are that people will be happy. It was nothing alien that was being introduced to the Indian consumer. They are already used to watching movies. It was just that the format in which they were watching movies were a little outdated.

The tie-up with Village Road Show (VRS), how did it happen? What were you looking for in the tie-up? It is all a function of timing. They were looking at the Indian market; I was looking at somebody overseas to help me setup the multiplexes. Because at that time the technology was not available in India, no architects knew how to build multiplexes, etc. I think it was just meeting of the minds. They were excited about the Indian market, and we both had a joint vision and strategy. I was looking at a partner who could have the same vision as me, and

unhappy with. If you keep your ears very close to the customer needs, and remember that you are a customeroriented organization, you will keep on improving and responding to his needs. Once you start doing this, then quality starts happening in every aspect. Quality is an incremental thing, it does not have to be such that all of a sudden there is a magic wand used and everything changes. It is the small-little things that you do, and the consumer looks at it. It is incremental improvement in quality that will happen.

What is the audience that you are catering to? Over the years, has there been any change in the profile across the country? Discerning moviegoer. There are different audiences in different cities. (PVR Cinemas for urban and semi-urban cities, PVR Talkies in tier II & III cities, and the very latest brand - PVR Premiere for high-end urban catchments). Anybody who is a movie-buff is whom I am catering to.


SHOULD NOT BECOME A MOM AND POP OPERATION. I SHOULD HAVE A BUSINESS THAT IS SOMETHING I ENJOY, AND MAKE IT SCALABLE. bring the expertise to help me build multiplexes. We got into partnership.

What was the one big act of faith that you have received? My mom. My dad too, initially. But unfortunately he passed away in 1992. He did not see the birth of PVR. Because when he passed away, I was only running a single screen cinema – Priya. My mom has been the biggest influence in my life.

What according to you is the next big change in the movie exhibition business? I think people will have to keep on innovating and reinventing themselves. Probably, a complete digital revolution yet has to happen. We are still showing movies on celluloid. I think one big change is going to be when everything becomes digital. I think it is going to become little more high tech than what it is at the moment. The black boxes will still remain, where people are sitting and watching movies. But I think it will get more and more high tech as we go forward.

Who all were with you when you started? How many of them are still with you? Well, my brother, Sanjeev, has been very important for me. He has been with me right from the beginning of my entrepreneurial journey. He is still with me. There are lot of key executives, key professionals in the company who are still with me.

As a business, where do you see the competition coming from? As in, if not to multiplexes, where does your customer head for recreation? People can do anything. There are so many entertainment options available today. People can go to a restaurant and eat; they can sit at home and watch a movie on DVD; they can go to a nightclub, they can go to a bar. India is a large country, I have not really pinpointed that where is the competitive threat coming from as such. I think threat comes from within; you have to make sure that you do not become complacent. As long as you keep offering something unique, then you are okay. As long as my house is full (laughs), I am okay.

What is your next big dream? How do you go about identifying the need of patrons? We have got a proper formal system to understand what the customer wants, what he is happy with, what he is 74


You can say it is to expand the PVR brand into different facets of our business, but not at the cost of exhibition. The DAR E exhibition business is still going to be our forte.



Hiring for startups Startup ventures find it very difficult to get key employees on board. There are a number of things they can do to get the right people to join them /Vimarsh Bajpai


hen Dhruv Agarwala and Kartik Varma set out to realize their dream of starting a financial planning business a year ago, there were challenges lined up for them at each step of their entrepreneurial journey. From registering the company – iTrust – to grappling with skyrocketing real estate prices, it was more than just a bumpy ride for these Harvard graduates. After setting up a modest office in Gurgaon, the duo soon discovered that getting the right people on board to help drive their dream was even tougher. “We have had instances of people who have come to this place, and called

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Things That Work 1. Referrals 2. Help from your investors 3. Stock and profit sharing 4. Association with a credible brand 5. Discuss the dream threadbare. Get them to share your passion 6. Offer autonomy and growth opportunities 7. Be upfront and honest about challenges

the headhunter and said, ‘I don’t want to interview, I don’t like the place,’” says Agarwala. A swanky office was not the only thing that prospective employees were seeking. Salary expectations made things more difficult. “Most people looked for about 25-40% jump in salaries even if they were changing jobs after just three months,” says Varma. Some, who did turn up for initial interviews were apprehensive whether “we are going to get funded or not.” Thus the hunt for the CTO took about three months, still not that bad by any standard. Many startups go through much longer time and interview cycles before they find the right people.



Entrepreneurs should be sensitive to employee needs and also ensure that rewards are proactively disbursed during the employee’s tenure with the organization. — MADHU BHOJWANI, CEO, EMMAYHR SERVICES In a country where even established hotshot employers are finding it difficult to attract and retain talent, it is no wonder that startups are finding the quest even harder. For instance, a top retail chain, looking for its head of merchandising with 10 years of experience, had a hard time getting a matching profile in India. It had to finally recruit from Southeast Asia. The issues for all startups are similar—untested idea, simple office, minimal support systems, modest salaries to offer without the icing of perks, and zero brand name, not to count unknown promoters who are yet to line up funds. Talent crunch is hurting companies badly and startups are no exception. Analysts believe there is not enough talent available to keep pace with the requirements of one of the world’s fastest growing economies. “With the gap between demand and supply for talent widening, candidate expectations have changed dramatically, with employer brand visibility and market benchmarked compensation taking centrestage,” says Madhu Bhojwani, CEO, EmmayHR Services.

However, Gita Dang, Senior Client Partner, Head Global Technology Markets, Korn / Ferry International feels that it is erroneous of startups to feel that they are in competition with established big-brand companies. “The profiles of people who aspire to join startups are typically those who don’t want to be part of an established bigbrand company. In fact, the real competition for a startup is from other startups, which have the ability to attract and retain these candidates.” There is also another angle to this story. Top managers in big-brand companies usually baulk at the idea of moving to startups, possibly due to their low appetite for risk having got used to comfort zones, be it as small a thing as someone to carry your bag into office, or five star hotel rooms and airport pickups. Even if they finally get ready to take the plunge, and when it comes to discussing compensation, they try to hedge against the perceived risks. “People in big-brand companies do not want to take risk. Even if they do; they demand higher compensation to protect themselves in any eventuality,” agrees Animesh Dasgupta, Prac-

tice Head, Executive Access. “Compensation is essentially a risk-reward combination. Many people in large, established organizations have a need for predictability—they have a low risk-reward profile,” says Dang. So what do people who have joined startups have to say? Most of whom we spoke to, cited boredom as the biggest reason for switching over from established companies. A need for change was also mentioned by many; change not only of organization, but also of industry and even specializations seem to spur people to join startups. Anil Kumar (name changed on request), currently sales and marketing head with a software startup, says that boredom and frustration at the previous job made him open to hear an offer that was routed through common friends. He came from a completely different industry. "But after meeting the entrepreneur, “I was able to see the dream and see myself as part of it. When we met, we were able to connect," he says.

Things That Work Material things first! One of the biggest carrots for prospective hires is the

People who join startups typically have a greater risk-reward appetite which converts to their looking for a reward which is commensurate with the risk they perceive. — GITA DANG, SENIOR CLIENT PARTNER, HEAD GLOBAL TECHNOLOGY MARKETS, KORN / FERRY INTERNATIONAL DECEMBER 2007 77



Startups should give their employees assurance of continuity – sign a three/four year contract, bring them close to the family, pay them variables more than the salary and employ spouses. — ANIMESH DASGUPTA, PRACTICE HEAD, EXECUTIVE ACCESS promise of future rewards, including stock in the company. “A startup has many attractive features such as faster growth opportunity, autonomy and speed in the decision making process, proximity and exposure to core management team etc,” says Bhojwani. As startups work on tight budgets, these points “could offset the disadvantage of offering comparatively lower compensation levels.” Agrees Dang. “People who join startups typically have a greater risk-reward appetite which converts to their looking for rewards which is commensurate with the risk they perceive,” she says. Such people would settle for a decent compensation, so as to not negatively affect their lifestyle; “and, they would expect a certain level of increase or a share in the rewards later on—in the form of sweat equity.” The commitment and passion of founders can be a big positive when it comes to hiring key people. “I strongly Dhruv Agarwala (left) and Kartik Varma, Founders, iTrust

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believe that people get attracted to a company if they like the person who talks to them. If the CEO of a company is conducting an interview, the prospective employee evaluates him just as much as the CEO evaluates the interviewee,” says Gowri Shankar Subramanian, CEO and Co-founder, Aspirant Systems. “Commitment levels and reputation of the people behind the setup is important. Mindtree and Sun Pharma are classic cases of committed groups attracting talents,” says Dasgupta. No matter how much you are committed to building a successful organization, if you fail to sell the road map to prospective employees, you stand the risk of losing the best candidates. “A startup company clearly needs to highlight and effectively communicate the positives such as faster growth opportunities to prospective employees,” says Bhojwani. When iTrust finally hired their CTO, they laid out their idea and “got him

to do the roadmap of what he thinks technology should look like.” Perceptions about your startup are very important. “Establish that level of comfort with people by associating yourself with things that lend stability and credibility to your venture,” says Varma. iTrust, has a weekly TV program on personal finance, which gives them visibility. Dang believes that startups should associate themselves with recognized brands including their investor, advisory board and business partners. Most startups get desperate after been turned down by the people they want to hire. So much so, they stand the risk on hiring the wrong person. Even established companies take many months to find the right fit at senior levels. Some believe that too much of a process-driven individual may not have the temperament to work in a startup. “Their requirement is to develop all systems and processes in place and then push the ‘operate’ button. So look for a growing individual, who knows the value of doing business with somebody else’s money,” adds Dasgupta. A year down the line, iTrust is 50people strong and hopes to have 200 people in the next 12-18 months. The founders no longer face questions on their business plan or future prospects when hiring! Obviously, the initial days were harder. Finally, if you are in a startup phase, it just helps to keep your eyes open all the time. You may just be meeting a potential hire, for in startups, key employees, more often than not, come DAR E from non-related industries.




I did it my way The key to success may lie in how you define failure /Laura Parkin 80 DECEMBER 2007





iming for entrepreneurial success? You had better be ready to fail. A lot. Success stories abound, and rarely do we hear about the mistakes entrepreneurs have made along the way. But for entrepreneurs, mistakes hold the ingredients for success. In fact, the key to achieving entrepreneurial success seems to lie in the ability to redefine success and failure on the fly, and on one’s own terms. From people in corporate jobs, “I hear all the time: ‘If I had the perfect idea, I would quit’. This reflects a fundamental misunderstanding of the process of entrepreneurship,” explains Manish Sabharwal, co-founder and Chairman of TeamLease, India’s second largest private employer. New businesses rarely succeed on their original business plans. “Entrepreneurship at its best is like a laboratory experiment. We arrive at vision of what can be made better and changed, we test it in the marketplace, we measure its progress and we decide how to refine it, accelerate it, end it,” says Randy Komisar, mentor to dozens of start ups, and Partner at venture capital firm, Kleiner Perkins Caufield & Byers. Therefore, failure is inherent to the process. In fact, according to Tina Seelig, Executive Director of Stanford University’s Technology Ventures Program, “It’s best to fail quickly and learn, rather than keep banging on the wrong nails, or with the wrong hammer. Try something different instead.” When one drops behind the eyes of entrepreneurs, it’s clear that they see these failures not as personal blows, but rather as information and experience on which to build. Mike Lanza, a serial entrepreneur in Silicon Valley, who has founded five successful companies, explains, “I don’t believe in failure – maybe things don’t work out, but life is so fluid, life always throws up something good. For example, one company I started never got off the ground, but it made the next company possible – so I don’t consider that a failure.” Manish Sabharwal discusses the journey taken by his first company, which tried several businesses be-

fore succeeding as an HR outsourcing company, “Were the life insurance and the pension businesses failures? Probably. But the question is: how do you define failure?” This evolutionary progress played out in Manish Sabharwal’s first company, “We just kept mutating. Entrepreneurship is the art of staying alive long enough to succeed. Of course, you may run out of runway, or investors may pull the plug, but part of the art is managing that.” What if the investors had pulled the plug? “I would have taken the business plan to ING or Sunlife. I would have implemented it somewhere else, financed it differently – it would have been a different kind of project. I wouldn’t see it as a failure,” concludes Manish. Sometimes one does have to shut down a company. In that case, “I think you have to redefine success – maybe the company doesn’t make it, but you become an expert and build your network in a great market space, and you become a consultant and sell that expertise to others,” says Mike Lanza. This attitude towards failure and the ability to redefine success along the way highlight a skill critical for entrepreneurial success: adaptability. “Entrepreneurs have to have ‘intelligent flexibility’. Of course you have to stick to your guns, but at a certain point, you have to adapt. Maybe you build your product and the market feedback is bad. Or by the time you’re ready, there are too many similar companies in the field, and some of them are ahead of you. You have to change what you’re doing,” explains Mike. “The hallmark of the successful entrepreneur is the ability to be passionate and driven, and at the same time dispassionate, objective, and honest about whether you’re doing the right thing, or need to change what you’re doing,” explains Kanwaljit Singh, co-founder and Partner at Helion Ventures. If entrepreneurs don’t regard business challenges as failures, does that mean they never fail? No. And their surprisingly consistent definition of DECEMBER 2007 81

DARE.CO.IN failure may reveal the core of the ‘entrepreneurial mindset’. “The only time I’ve ever been disappointed is when I try to be something I’m not. When I try to conform to someone else’s thinking. When I feel I have not been “true to myself”,” is how Mike Lanza defines failure. Manish Sabharwal’s definition ran parallel, “It’s when you ‘lose the faith’.” Prakash Mundra, a young entrepreneur just two years into his journey, explains “I would consider failure when one’s life is too much controlled by society’s pressure and not by one’s heart.” What shines through in these comments is a true independence of mind. Entrepreneurs live in a world where they set their own measures for success, and failure. And it’s this freedom from the common perspective that may enable entrepreneurs to see opportunities where most others do not; and liberates the entrepreneurial mind to innovate and create. As Heidi Neck, Professor of Entrepreneurship at Babson, says, “Fear of looking like a fool is the number one barrier to creativity.” Some individuals may be born with an inherently independent nature. Others may achieve the independence, in which case, context matters. In India, achieving this freedom may be more difficult than in some other cultures. “Particularly in India, in this context, we are born and brought up to be successful in certain visible ways: ‘my son earns X million Rupees’ or what your title is. These are considered very important manifestations of success,” explains Kanwaljit Singh. “I think for society, success is who you are exterSuccess and Failure Are you an entrepreneurial thinker? The core of the entrepreneurial mindset appears to be the ability and desire to think for oneself, to define success and failure in personal terms. This independence of mind may be the key to seeing opportunities that others miss, being willing to give up the status quo and strike out on a new path, as well as the precursor for true innovation and creativity. 82


strategy/startups nally – for example, where you were educated, versus what you learned. This results in fear of failure.” And this creates barriers, says Kanwaljit, “For corporate executives, concern about being seen as a ‘failure’ is a huge barrier to getting started. A supportive culture does help," believes Randy Komisar. "Genuine entrepreneurs are natural optimists. But if they don’t have a supporting culture, their optimism will take a beating. A place like Silicon Valley is not distinguished by its infrastructure, or capital, or intellectual talent – it is distinguished by its culture of accept-

“FEAR OF LOOKING LIKE A FOOL IS THE NUMBER ONE BARRIER TO CREATIVITY.” – HEIDI NECK, BABSON COLLEGE ing momentary failures as a way of life and encouraging entrepreneurs to keep trying and to reinvent themselves and their ventures with the benefit of experience.” Kanwaljit does see a change starting in India, “In India, a new attitude has just started emerging in the entrepreneurial community. If the entrepreneur has given it an honest shot, and has been willing to take the risk, that is worth something.” The emergence of role models is one element contributing to the more supportive climate. Manish Sabharwal explains, “We don’t really have a Below are a few questions you can consider. How far along are you, when it comes to achieving the entrepreneurial mindset? Questions:  What’s more important to you – your title and salary, or what you learn and do on the job?  Would you have attended a college of a lesser brand, if you thought you would learn more at that institute, or would you sacrifice learning for brand?

track record of failure from the past 5 – 15 years. It’s too short a time. We’re just starting to have role models; it’s changing today.” Developments in education are also encouraging young people to think more entrepreneurially, more independently. Many institutes of higher education are starting to incorporate entrepreneurship in their offerings. These programs usually include exercises that require students to solve problems, and provide the opportunity for them to experience “small successes and failures – where there is no given ‘right answer’ – in a risk free environment,” describes Tina Seelig. This marks a clear departure from the lecture-based, standardized-testing system that dominates. The decrease in societal pressures, encouragement of critical thinking in schools, and the emergence of role models are changing the entrepreneurial landscape in India. Within an increasingly supportive culture, it may be easier for more individuals to develop an entrepreneurial mindset – one characterized by independent judgement and the freedom to define one’s own successes and failures. This would be good news. “Failure, defined as the inability to achieve one’s objectives, is a matter of life for entrepreneurs and those that support entrepreneurship. Without the chance to fail, no one has the opportunity to achieve great things,” DAR E summarizes Randy Komisar. Laura Parkin is the co-founder and Executive Director of the National Entrepreneurship Network (NEN), India’s leader in entrepreneurship education. NEN provides support to new and future entrepreneurs, reaching over 300,000 young people, on more than 280 campuses.


What was the key consideration when you made your last career decision? What’s the safer route in any given situation: the way it’s been done before, or trying something new that may be better, but has a risk of failing? What do you consider the greatest failure in your life, and why? How did that failure affect your life? How do you define success in your life? What are the most important elements that characterize that success?




Pradeep Gupta, CMD of CyberMedia presenting a framed cover of the first issue of DARE, to NR Narayana Murthy.

J Frank Brown, Dean of INSEAD presenting a framed copy of the first issue of DARE to NR Narayana Murthy. Also seen in the pictures is Krishna Kumar, Group Editor, DARE. DECEMBER 2007 83



The Business of Spas As health care moves beyond treatment to wellness and as people get ready to pay more for being pampered, the business of spas is set to boom /Shilpi Kumar






hat comes to your mind when you hear the word Spa? Large spaces, pastel shades, beauty and body therapy, subdued lighting and soft music, flowers, candles, breathtaking locations, exotic models posing in equally exotic ads, water, soft-spoken staff, massage, and specially prepared health food. Spas are all these and much more. A spa is all about pampering. It is about pampering the body, the soul and all the senses without overwhelming them. It is beyond relaxation and about rejuvenation. It is also about exclusivity; exclusivity in location, in design, in interaction and in offerings. Where else would one get covered with chocolate or honey? Where else would you go to have snakes slither over your body? And not to forget the hot stones, the mud wraps and the caviar masks! Worldwide, the spa industry is estimated to be worth Rs 10.7 billion with an annual growth of 200% in the Asia Pacific region! The past five years have shown an immense growth in the spa industry in India, as well, making it a great opportunity for entrepreneurs to venture into this market. As of now, although spas are emerging in metropolitan cities, there are only about 2025 major spa centers, predominantly in the south, in Kerala and Karnataka. Hotel chains are realizing the benefits of having spas in their premises as an excellent value addition. The combination of ancient Indian traditions like yoga and Ayurveda with massage therapies are enticing millions of international tourists to India and a spa just adds to the rejuvenation and pampering while adding to the bottomline of the business. Growing local income, an increasing propensity to spend on leisure and comfort, and an increasing tourist inflow, particularly for the commonwealth games of 2010, all point to an upswing in this business.

Many a Type Over the years, the term spa has begun to mean different things to different people. You can hear about different kind of spas mushrooming across the globe. You can decide to start a day spa, which is the most popular in the West, and is visited by customers only for the duration of the treatment, a few hours of the day. Such spas offer services like facials, massages, body skin exfoliation etc. Setting up a spa in a hotel is also a possibility. Hotels are destinations not only for tourists, but also businessmen, who go there for conferences and other business needs. Your spa could even be mobile within the hotel! Westin Hotels and Resorts for example has one such service with “a specially designed 31-inch wide spa bed, larger than traditional portable tables featuring heated AeroCel padding topped by plush double fleece lining and signature linen. A relaxing spa atmosphere is created before your massage starts with a spa basket holding a flower, healthful treat, bottle of water, and a

letter with recommendations on how to make the most of the in-room spa experience. The basket also contains a spa music CD to be played before and during treatment as well as a selection of plant based aromatherapy oils and room sprays allowing guests to choose their own scent for the treatment.” The USP of such a service is that people don’t have to leave immediately after the session is over and can stay and relax in the comfort of their own room. A destination spa or resort spa is situated in a remote location, away from bustling cities and provides customers with in-residence programs, indulging them in a full-fledged wellness regime that consists of spa services, beauty treatments healthy cuisine, physical fitness consultation and health education. Health/medical spas are the latest buzz. These are not just places to get pampered, but also to get treated. They normally offer what is called holistic treatment - a combination of both beauty, as well as therapeutic programs. More and more spas are now getting revamped to include health and fitness

Mystic Cures Spas DECEMBER 2007 85

DARE.CO.IN centers, special spa cuisines, hydrotherapy, acupressure, anti-ageing and other detoxification services, all under full time, licensed health care professionals. They also offer medical beauty treatments like medical peels, botox, laser surgery etc. Or do you want to consider a dental spa, under the supervision of a qualified dentist? Dental spas are the answer to dental anxieties. A spa like serene environment with aromatic candles, soothing music and dim lighting is created to make the visitor feel relaxed. Some of the larger dental spa clinics also offer hot beverages along with massages, manicures and pedicures, reflexology etc, simultaneously, along with dental treatment. There are about 200 such spas in the United States. Besides the US, there are about 20 more in countries like Germany, South Korea, Columbia, Brazil and Thailand. This market is still untapped in India, and the Indian dental care services market was estimated to be more than $446 million in the year 2005.

What is your USP? There is a sense of the exotic that gets conjured up when you use the term spa. Many spas offer unique techniques like volcano ash body wrap, crystal healing, aroma therapy, stone therapy, besides the more traditional Ayurveda and acupressure and incorporate products like honey, cocoa butter, chocolate, fruits and even caviar into their service offerings. With people willing to dig really deep into their pockets for such indulgences, these have become the USP of some spas. Organic and natural is another common USP. Ananda in the Himalayas, which claims to be the world’s top destination spa, for example, offers about 80 beauty and wellness treatments using natural substances like sea-weed, jasmine, wild-rose, salt and sandalwood as part of their therapeutic regime. 'Maya, the spa', part of the 18-acre Radisson resort in Kumarakom, Kerala, is one of the biggest spas in South India. It offers exotic western and oriental therapies, like Sabai stone therapy, solar therapy, and Moroccan 86 DECEMBER 2007

opportunity/wellness mud wrap along with ayurvedic treatments using herbal extracts. Based in The Ashok hotel in New Delhi, Amatrra Spa, claims to amalgamate “Astroscience” with Ayurveda. According to Srishti Khanna of Amatrra, “treatments are prescribed based on a person’s planetary diagnosis, keeping in mind aromas, colors, gems and a diet that is best suited for the particular customer” In short, even slightly upmarket beauty parlors and boutique clinics could be calling themselves spas. So, your USP has to be clear in order to carve a niche for yourselves.

R&D helps The spa USP is a rapidly evolving one, as other spas around you as well as customer tastes evolve. You may have started off with water lily root face packs. But if everyone around is also offering the same or if customer preferences have moved to lotus petal facials, then it is time that you innovated the next breakthrough. So, every spa worth its brand should run a basic R&D program to develop new products, programs and packages as well as to periodically audit existing products and treatments. Mystic Cures Spa, for example, claims to have their products and treatments, specially developed by their own research and development unit, as a mélange of Ayurvedic and Swedish techniques. As part of their expansion plans, they have developed around 20 new products including therapeutic oil, ayurvedic products etc. currently under trials or awaiting clinical approval. Ananda Spa, which has its own signature range, has its local supplier who blends the oils exclusively for them. Similarly, Srishti Khanna, General Manager of Amatrra Spa says, “We have our own range of exclusive products like bath gels, body lotions, face masks and massage oils that are developed and tested by our experts. Only certain products like aromas or scrubs are procured from outside.”

Sources Many spas choose to develop their signature products in their own R&D

With the number of tourist arrivals expected to go up to 10 million in 2010, coupled with the Commonwealth games, there is an excellent opportunity for us to expand Siddhartha Shankar, MD, Mystic Cures Spas units. Spa and gym equipment is mostly from Technogym or imported from countries like Italy, the US, the UK and Australia. Staff is recruited from training institutes abroad and India. Ayurvedic masseurs come from Kerala. Staff training, particularly in behavior and interaction is a key factor in developing the exclusiveness of your institution. Training period varies depending on the needs. The interiors of the spa, which need to be soothing and relaxing, is done by specialists. Interiors includes space design, color and décor as well as simple things like presentation. Like where are the oils placed? Where is the lit lamp placed? and what does the staff wear. Maintaining a spa is a meticulous process as the products, treatments, equipment, interiors and



Ananda in the Himalayas

the staff needs to be well maintained and presented. There has to be regular inspections. There are third party management agencies that would take up the responsibility of running the show. Pevonia Spa Care offers services ranging from financial analysis, concept and designing of your spa, to assisting you with spa equipment, products, and even staff training. Pevonia also assists in carrying out day to day operations. ESPA, which has been in this business for about ten years now, has been providing a combination of products, treatments and services, including development and redevelopment, as well as management solutions for spas all around the world. The Ananda Spa uses ESPA products for a small number of their treatments.

The big challenge As of now, shortage of trained personnel is the biggest challenge that the Indian spa industry is facing. Acording to Dr Shaswat Chandra, Spa Manager, Radisson Plaza Resort & Spa, Kumarakom, “It is necessary to start a training department to fill the gap of trained personnel and to provide a ready pool.” Spas mostly hire certified trainers and managers from abroad and then conduct

training for the rest of the staff internally. There is a lack of a standardized approach to training of the therapists and the government is yet to regulate the service quality in spas and establish health and safety standards. However, as more and more people are considering spa therapy as a potential career option, accredited spa training institutes that are in sync with global standards are gradually coming up. Also the Spa and Wellness Association of India was established last year.

Back-end opportunities Other than the obvious opportunity of running a series of spas, there are a number of other backend opportunities that are opening up in this area.

SPA PRODUCTS The Ayurvedic cosmetics and products industry is worth Rs 3,000 crore and is bound to grow, as more and more people are embracing spa treatments for stress reduction and pain relief. Also, botanical and marine ingredients are being preferred over factory made products as people are becoming more aware of the benefits of natural products. Earlier only women used to engage in such treatments, but now even men are increasingly becoming concerned about their appearance and are embracing spa-like treatments to look and feel good. This, in turn, is boosting the demand for products and services that are designed for and cater especially to men. DECEMBER 2007 87



Worldwide, the spa industry is estimated to be worth Rs 10.7 billion with an annual growth of 200% in the Asia Pacific region Magazine. In India, however, there is only one magazine, AsiaSpa.

SPA EQUIPMENT & SUPPLIES Massage tables, gym equipment, facial tables and chairs, hydro therapy tubs, saunas, jacuzzi tubs, vichy showers— all these are standard equipment. As of now, most of these equipment are being imported from abroad and it is very costly ranging from $2,000 to as much as $15,000. Maintaining the equipment could also become an opportunity in itself. Besides the regular spa equipment, there are also many other miscellaneous supplies that could be provided to spas. These include towels, spa garments, manicure/pedicure supplies, candles, bedding, brushes, gloves, healing stones etc. Technogym from Italy, SpaEquip and CosmoPro based in the United States, are some of the players in this field.

SPA CUISINE Ananda in the Himalayas

STAFF TRAINING A shortage of skilled personnel is reason enough for entrepreneurs to keep an eye on this market. As spas are booming like never before, staff training institutes are the need of the hour. Staff training in India is usually done in spas, where they are trained in Ayurvedic and oriental therapies, managing clients and handling spa equipment. There are no exclusive and certified spa training institutes in the country as of now.

SPA INTERIORS The interior design and ambience of 88 DECEMBER 2007

a spa is the very soul of a spa. A spa needs a third party to assist with space planning, color selection, concept design, selecting material like textiles and fabric, window, wall and flooring plans, accessorizing and furniture and equipment selection. If you are into interior designing, this one is for you!

SPA PUBLICATIONS There are many few publications and even more websites abroad that cater to the spa industry and the spa audience. These include Body & Soul, Luxury Spa Finder Magazine and Spa

Many spas are now looking to incorporate healthy cuisine as part of their wellness programs. They are looking for catering services that can provide them with a healthy menu that consists of dishes that are nutritious, high in fiber and low in calories and sodium. At the same time, the flavor and the essence of the food cannot be compromised upon. Food has always been an integral part of the spa program in destination spas such as Ananda, but spas in hotels such as the Taj Spa and the Amatrra spa in hotel Ashok are also slowly becoming a part of this trend, making this a potential business to DAR E venture into.

DARE.CO.IN Contd from pg. 40

Enchanting India: growing globally from the start The founders of Enchanting India launched a new destination, Enchanting Africa, in November, 2006. The diversification succeeded, with revenues in the first year exceeding $1 million. The company opened an office in Nairobi, Kenya that grew to 13 people, replicating the model of Enchanting India, by using the Internet to generate leads that were converted to sales by highly qualified travel advisors. It was able to leverage its existing

Another way to expand Enchanting India's reach while maintaining its focus on high-end travel customers was to add Web sites in different languages. In fall, 2007, the firm launched versions of its Web site in French, Spanish and Italian, which immediately began producing leads.

90 DECEMBER 2007

case/INSEAD customer base of nearly 2,000 because many who had a good experience visiting India decided to sign up for a trip to Africa. The India business continued to grow, reaching $4.5 million in 2007. The key to economic growth was search engine optimization. In 2005, 90% of the company’s traffic was originated via Google Adwords; by 2007, clicks from search engine results accounted for 60-70% of inquiries. Laxminarayan comments: Fewer than 10% of people look at the right side of a Google search where the ads are or go to the second page of results from a search. You increase your leads by a factor of 100 if you are on the front page and the left side when a page is returned from a search. It is a long, tedious process to optimize your site—you need a budget and a lot of work. Now, we are the top-ranked travel company on most engines when you search in German. It’s much more competitive for searches in English, and it has taken more time.

Another way to expand the firm’s reach while maintaining its focus on high-end travel customers was to add Web sites in different languages. In fall, 2007, the firm launched versions of its Web site in French, Spanish and Italian, which immediately began producing leads. “We’re becoming global on two fronts now,” says Laxminarayan. “We are becoming a global provider of high-end exotic destinations and our target markets are very diverse.” The investment required to build and operate sites in multiple languages proved manageable, he explains, because of India’s growing attraction to people from around the world. He notes: We originally hired Indian people who were teaching German at language institutes in India. There are plenty of good French speakers in this country, so we hired a French lady to build and run our French web site. Spanish and Italian were more difficult because these are languages that are not widely spoken in India, and the expatriate communities are quite small. We



recruited one Spanish lady living in India and one Italian lady from Europe because they wanted to work in India. A lot of people are curious about India and want to know why it is growing so fast, so we get applications from Europe all the time. Native speakers sit in our Bangalore office and run those operations. As we grow globally, we’ll have a base in India that lets us share knowledge across languages because we’re all under one roof. Operating a multi-language Web presence is made much easier by investing in a proprietary technology platform that brought Enchanting India’s functions together. Laxminarayan says, “We built a platform tailored to what we do, and that really allows us to scale up to the next level. Various functions communicate well with each other, so we can adapt our model to a new region by populating it with local content. It has increased our efficiency by 50% and will be a major asset if we ever partner with or are acquired by a big enterprise.”

After wrestling with the travel agent channel for a year, the partners decided not to diversify in that direction. Laxminarayan explains: One of our main value propositions is giving high-quality advice and controlling the customer interaction. We wondered whether we could grow exponentially without travel agents, because the Internet limits you to people who are comfortable booking online, but that has not turned out to be the case. We are growing well even though we are nowhere near the potential we have to get more from search engine optimization for our English Web site. Enchanting India did reach into a new segment, travelers who were attending an event in India and wanted to travel before or afterwards. The World Presidents Organization, a network of 3000 chief executive officers, organized a trip to India and used Enchanting India to offer optional trips for smaller groups who wanted to explore more of the country. “We proved ourselves ca-

pable of dealing with this kind of customer, and providing event-based trips for high-end groups that want high-end activities could be one of our key drivers of growth,” Laxminarayan remarks. What’s next for Enchanting India is further geographic expansion underpinned by an efficient infrastructure, Laxminarayan says. “Enchanting South America” and “Enchanting China” are probably the next two operations the company will open. He explains: The whole concept of the company revolves around destinations that have a lot to offer but are underserved and involve risk or uncertainty for the average Western traveler. These places do not have transparent information, and it is uncomfortable for a traveler to ensure that he’ll be picked up at the airport, that his hotel is correct, and so on. With us, you are in safe hands. China and South America fit very well, but China will be the hardest to get into, since we know the least about it. We plan to leverage the INSEAD DAR E network the most there. DECEMBER 2007 91



A classroom in session at Indian School of Business, Hyderabad

B-schools and the spirit-de-entrepreneurship Can entrepreneurship be taught in a classroom? If yes, are the entrepreneurship courses being offered in the leading B-schools of the country the best bet? We find out /Arunjana Das


of LEM (Laboratory in Entrepreneurial Motivation), a course offered by Indian Institute of Management Ahmedabad (IIMA). “LEM was a super motivator of a course. Both of us had entrepreneurial inclinations even before coming into IIMA. LEM pretty much crystallized that intention” says Sreeram. Rashmi Bansal, editor of the youth magazine, JAM (Just Another Magazine) is another past student of this course. LEM is a foundation course on entrepreneurship offered by IIMA. Professor Sunil Handa who takes this course follows a novel, Sreeram and Mansur of BrewHaHa no-holds-barred way

reeram and Mansur, graduates of IIMA hit the headlines when they started BrewHaHa, a café cum game-parlor cum lounge, in Bangalore after leaving fat pay - packages behind. They are both past students



of conducting the course. There are no course materials, no exams and none of the trappings of a regular management class. The only thing you are expected to bring along is your thinking-cap. Mumbai-based NMIMS (Narsee Monjee Institute of Management Studies) has been running Enterprise Training for Women, a management programme for women entrepreneurs for quite sometime now. It’s a three-month academic programme and includes courses on Costing and Accounting, managing balance-sheets, marketing research & strategy, positioning & brand building, export marketing, legal environment and human resources. Urmila (name changed), a lighting designer who attended this course, says, “It helped me understand the financial nitty-gritties of starting a


campus xxxxx /xxxxxx /courses

Laura Parkin, Executive Director, NEN What would be your idea of a model entrepreneurship programme? There is no single programme that we hold up as a model. The best entrepreneurship program is one that is developed within the context of that institute, rather than copied from elsewhere. business, what’s more, the entire experience also turned out to be a huge confidence-booster.” Any B-school worth its salt today offers one elective or the other on entrepreneurship. A few others have established their own full-fledged entrepreneurial centers. While the question of whether entrepreneurship can be taught in a classroom rages on in the background, B-schools have come up with many programs in the form of crash-courses and workshops that promise to accoutre the entrepreneur for the chaos without. The Nadathur S Raghavan Centre for Entrepreneurial Learning (NSRCEL) at IIM Bangalore offers a one year certificate course, Management Programme for Entrepreneurs and Family Businesses, and another, Management Programme for Women Entrepreneurs. The programmes comprise courses in Economics, Industry Analysis, Business Planning, Business Strategy, Product Development, Marketing, Sales, Accounting, Costing, Pricing, Finance, Banking, Budgeting, Managing People, Law, Taxation, Decision Analysis, Communication, Negotiation, Networking, et al. IIMB

That said, there are three common characteristics of the most effective entrepreneurship programmes, and these hold true everywhere we have studied, India and abroad. The first is that at least half the programs have to be designed and led by students, rather than faculty. This allows the students to innovate and execute, building skills in the process. The second characteristic of successful programmes is a high degree of interaction between industry and academia. The interaction can take the form of talks by entrepreneurs, internship by students in start ups, courses or workshops co-taught by faculty and people from industry – the key is to break down the barrier between the real world entrepreneurial community and the academic world. The third is what we call “surround sound”. It’s not effective for an institute to have only one course in entrepreneurship, or an incubator in a corner of a building somewhere. Rather, a great entrepreneurship programme offers many and varied ways for students and faculty to experience and learn about entrepreneurship. How many students have been helped by such programmes in starting their own ventures? It’s important for people to understand that the goal of entrepreneurship programmes at these institutes is to inculcate entrepreneurial thinking, impart critical skills and knowledge, and seed the students’ networks. The goal is not to push young people, with no work experience, into starting ventures immediately. That would be counterproductive: I believe that you would see a “boom and bust” cycle that would, in the end, discourage young people from trying entrepreneurship. It’s much better for young people to gain some real-world experience before starting out. Generally speaking, I think it’s important to understand that entrepreneurship courses are not just for those of us who want to start companies. Entrepreneurship courses, at their best, help each of us to think of our own lives more expansively and imaginatively, and provide us the tools to help bring those imaginings to life. DECEMBER 2007 93


campus/courses “In all our entrepreneurship programs, we start by building an environment of understanding about the concept of entrepreneurship. The next step involves self-assessment, tremendous amount of planning and market research, identification of opportunities, founding a great team and great management and a whole array of funding activities. We focus on informing the students and taking them through the entire process of starting a new business and successfully running it.” - DR. ABHISHEK NIRJAR, PROFESSOR, NEW VENTURE PLANNING, INDIAN INSTITUTE OF MANAGEMENT, LUCKNOW

also offers many electives in entrepreneurship for regular students. All other IIMs offer one course or the other in New Venture Planning, Entrepreneurial Motivation and Venture Capital Investing. These courses have taken steps beyond the mere writing of a business plan and seek to equip students with the skill-sets which are required to keep a business running, once it’s started. Apart from offering courses, these institutes also conduct workshops and seminars. IIM Calcutta runs several workshops on entrepreneurship

and SME’s (Small and Medium Enterprises) where anybody can register and participate. These workshops are conducted in conjunction with associations such as CII (Confederation of Indian Industries) and ICC (International Chamber of Commerce). IIM Lucknow undertakes several training programmes for people employed with small firms, entrepreneurs and family business owners. ISB (Indian School of Business), Hyderabad, in conjunction with their Wadhwani Center for Entrepreneurship Development, offers a Global Growth Entrepreneurship Programme.

Institutes offering courses on entrepreneurship 1. Leading B-schools such as the IIMs, S.P Jain Institute of Management and Research, Indian School of Business, Management Development Institute, Narsee Monjee Institute of Management Sciences, Xavier Labour Relations Institute (XLRI), Jharkhand, Xavier Institute of Management (XIM), Orissa , Symbiosis Center for Management, Maharashtra , to name a few 2. All India Management Association Center for Management Education, New Delhi 3. Indian Institute of Foreign Trade (IIFT), New Delhi 4. Entrepreneurship Development Institute of India, Gujarat 5. FICCI, New Delhi 6. Small Industries Service Institute, New Delhi 7. National Science and Technology Entrepreneurship Development, New Delhi 8. National Institute for Entrepreneurship and Small Business Development (NIESBUD), New Delhi 9. ASEED and Entrepreneurship Development Institute of India (EDII), New Delhi 10. Indian Institute of Planning and Management (IIPM), New Delhi 11. Institute of Marketing and Management (IMM), New Delhi 12. Indian Institute of Information Technology and Management (IIITM), Madhya Pradesh 13. Jamia Millia Islamia, New Delhi. 94


S P Jain Institute of Management and Research, Mumbai and National Entrepreneurship Network have designed a course on Entrepreneurship Project on Business Analysis. “Besides actual entrepreneurs, these courses and programmes are also meant for those who are part of the entrepreneurial ecosystem – future investors, infrastructure-suppliers and policy-makers,” says Professor Anjan Raichaudhuri of IIMC. Dr. Abhishek Nirjhar, Professor of New Venture Planning in IIML believes, however, that imparting of entrepreneurial education cannot be done through the traditional way of teaching. Nirjhar minces no words when he says, “Teaching can remain but has to be structured in a different way. Focus should be on two things – developing courses on a practical workshop model and skill-set training. There is no need to have exams. The number of contact hours should be lesser and there should be more of group work. There needs to be more amount of mentoring in place. The over-all model should not be a typical qualification model. If, at all, a qualification model is used, it should be based on the workshop strategy.” These programmes are in a state of constant change. With the objective of addressing the evolving needs of the new and existing entrepreneurs, they are striving industriously to arrive at the perfect equation of elements which would help entrepreneurs in not just chasing a big idea, but in scaling it to all DAR E subsequent levels.







Social Networks go local As networking sites prove to be a major pull for internet users, a host of Indian startups are eyeing the sector /Sreejiraj Eluvangal


n the Internet, India follows t h e Wes t . W he t he r it w as news portals, web-based email or second hand sales, enterprising Indians have built out copy-cat business for themselves based on the success of such companies in the West. But what about social networking ? A clutch of Indian companies - from fresh-out-of-college graduates to big conglomerates like the Reliance Anil Dhirubhai Ambani group (RADAG) are pouring in crores of Rupees trying to organize your social life. Is this the second dotcom bubble or the next big thing on the internet?

What is a networking platform? It is a website that provides just a platform, and leaves the content to be created by the users. Such sites are part of the user generated content (UGC) phenomenon born out of the covergence of communication (one-to-one delivery) and broadcasting (one-tomany distribution). Despite all the hype surrounding such businesses (Web 2.0), it is hardly a new way of content creation. Ebay, geocities and the early usenet are examples of networking platforms. However, since the time of usenet and text based usergenerated content, 96 DECEMBER 2007

platforms like and flickr. com have expanded it to rich media such as images and video. With the latest social networks mixing rich content sharing with personal profiling, the platform business has hit the roof in popularity, with the top ten platforms like myspace and facebook estimated to account for around 250 million unique users per month - nearly a third of the total internet users worldwide.

The mad race Myspace, Facebook, Flickr and Orkut started off in late 2003/early 2004 and were followed by Youtube, in 2005. Compared to this Yahoo launched in 1994 and Google, in 1999. Yet, despite their relative youth, these sites account for a disproportionate share of the online user activity. According to Hitwise, which tracks internet traffic through user-monitors and third-party data, 4 out of the top10 sites in the US by page-hits are networking sites. To further get an idea of their popularity, compare their visitor traffic with two of the oldest and the two most popular websites on the internet - Yahoo and Google. According to internet data analysts, Yahoo had close to 130 million unique visi-

tors in October 2007 and Google had 125 million. The largest platform site - eBay had 74 million unique visitors, and MySpace had 65 million. While the visitor numbers are only about half that of Google and Yahoo, they are many times that of the two largest traditional content or media sites - CNN (24 million) and NYTimes (11 million). Another interesting aspect is that each user spends much more time and views more number of pages on each of their visit compared to portals like Yahoo. For example, visitors to Myspace spent an average of 24 minutes per session on the site compared to just 6.5 for Google. Another factor in favour of such platforms is the extreme adoption rates. For example, a study by online intelligence firm Comscore in August found that nearly 78% of the internet users in the UK were members of one networking site or the other. Expectedly, the high visitor rates have set off a valuations race with both traditional media houses and portals trying to acquire platform operators. The first big deal in this space happened 2 years ago when Rupert Murdoch’s News Corp bought MySpace for $580 million (Rs 2,320 crore). This was followed by Google's $1.65 billion



cial network user consumes around 350 pages a month and that around 40% of Indians use such friendship networks, such sites account for about 1/8th of total Indian page-views. This growth from virtually nothing to 12.5% of the total clicks in just 2 years has Indian companies excited. A number of companies, including MingleBox, Yaari, IndiaRocks, Rediff and Bigadda, are jostling for space in the market. Two of the early movers, Fropper and DesiMartini, have reinvented themselves as social networks, shedding their dating tag. The market, however, still continues to be dominated by Orkut, with around 2/3rd marketshare, according to Juxtconsult.

India’s own platform?

DARE/top five networking sites U.K.



Skyrock Network

StudiVZ Sites

Source: comScore World Metrix

youtube buy. Both were just around 18 months old when they were sold. Since then, valuations have risen sharply. The latest deal - Microsoft’s acquisition of 1.6% of Facebook in October values it at $15 billion (Rs 60,000 crore).

The India effect The high valuations have had an impact on the Indian platform scene as well. Traditionally, only two kinds of online companies have survived in India - those selling traditional content and deriving their revenues from advertizing, and niche services with a fixed subscription fee, such as matrimonial services. “At that time, we considered launching the boy-meets-girl network and we also knew it would become very popular," says Manish Agarwal, VP for Marketing at Rediff which launched one of India’s first pure networking service - Connexions - a year and a half ago. " But we were not sure we would be able

to monetize it.. it was easy to target and sell ads on a professional network, but a boy-meets-girl was considered tough," he adds. While Rediff hesitated, another network, Hi5, started by US-based Ramu Yalamanchi targetting the Indian diaspora caught on among teens and students in 2005. However, Hi5 was soon overtaken by Orkut which was started by a Google employee in 2004 and later taken over by Google. Today, out of the estimated 25 million regular internet users in the country, around 10 million are members of the community, according to industry estimates. In a survey conducted by online research firm Juxtconsult among 10,000 households 6 months ago, 50% of the respondents said they went online for dating and friendship, with 44% using social networking sites for the purpose. Interpreting European internet traffic data for August, Comscore found that 78% of all online Britons use social networking sites (excluding pure content sharing sites.) The figure was 61% in Spain and around 50% in other West European countries. Depending on the country, each user ‘contributed’ between 250 to 840 pages views a month. According to the same firm, an average Indian online user consumed around 1,400 web-pages during May. Assuming that an average Indian so-

Indian players meanwhile expect the landscape to change, like it changed when Orkut displaced Hi5 and MySpace replaced Friendster. Kalyan Manyam, who quit his job at a technology company and started networking site indiarocks more than a year ago is one of the group that is trying to deliver an Indianized social networking environment. “Each country has a its own social context... and in a service like social networking, there will always be room for tailoring it according to the culture.” In his quest for delivering a more “complete social experience”, Manyam has so far tied up with NGOs, speakers, event-management companies and even tapped into bollywood for support in his customization drive. “We want them to get information about not just what new movies are coming out, but also about what is happening in the country, the political and social events,” he says. Minglebox is another social networking site started a year ago by marketing veteran Kavita Iyer. The Bangalore-based firm, which recently got a $ 7 million (Rs 28 cr) fund infusion from Sequoia Capital, is also focussing on on-the-ground activities in its efforts to differentiate itself from Orkut and others. Targetting colleges and work-places, it breaks away from the technology-oriented strategy of competition from abroad and even sends DECEMBER 2007 97



out staff to student events. It also has much more stringent qualification norms, “in keeping with the higher concerns about privacy that Indians have", according Iyer. Another heavy-weight newcomer is Anil Ambani group's The site grabbed headlines with its monthlong ad-campaign on tv in August, at an estimated cost of Rs 4-6 crore. Besides this, it also has an online adcampaign. Siddharth Roy, former head of MTV India’s digital business and the chief operating officer for BigAdda says his company will offer users more than just interaction with others. Breaking from the model adopted by the biggies in the business, Roy not only wants four-month-old bigadda to become the default destination for Indians to interact with each other, but also for their interaction with companies.”In addition to socializing, it would also be an online marketplace where companies can sell to the customers. In this direction, we have already tied up with some content companies to deliver their content to our subscribers,” he says.

But where is the money? Amidst all the enthusiasm, there are also those who question the assumptions the start-ups are making. With the cost of development at around 1 to 3 lakhs (if you sit and do your own development, that is) and initial running costs limited to maintaining the platform architechture, many feel that the business offers hardly any entry

DARE/regionwise internet users users/month pages/user/month Worldwide

















Malaysia New Zealand










South Korea Taiwan

Note: Home and Work Locations only, excludes public/cafe computers. Source: comScore World Metrix

98 DECEMBER 2007

barriers and too many have rushed in. “In the last six months, we have got around 500 applications for funds,” says Pravin Gandhi, managing partner for Seedfund. “Out of this, around 200 have been in the area of social networking and content sharing platforms,” he says. Gandhi has so far opened his purse only for one - carwale, for users to list their old cars for sale. The company is one of the few profitable ones in the country, primarily by selling leads or voluntary information about prospective buyers to car companies. “I think the internet offers a lot of scope for such services, but you need to meet concrete needs of the people,” says Gandhi, adding that the online market may not be ripe for services that target emotional needs when utility services have not been fully explored yet. Another issue that is likely to haunt the startups is scale. Google, Yahoo and the like have the advantage of offering integrating multi-themed services. Standalone ones may not be able to match the convenience of these big players. “Ultimately, we are going to see two or three which have a very large number of users and all the other services will be offered to these services as clouds to which they can choose to belong,” says Agarwal of Rediff, which has plans of integrating its various offerings such as email, networking, content and content-sharing. Alok Mittal of Canaan Partners, which has investments in BharatMatrimony sees both mega as well as niche networks co-existing. “With the emergence of mega players, some of the smaller and specialized ones can ride on top of the bigger ones in the form of applications,” he says. Mittal points out that the biggies are opening up to smaller niche players on revenue-sharing basis and that such applications can even be paid services. However, the biggest issue is that nobody, including international giants seem to have a clue about is how to monetize the business. Though google has been trying to sell text ads on orkut for many months, industry sources reveal that the response has not been

very positive. The global online ad market is estimated to be around $ 21.4 billion (Rs 84,000 crore), and in India, it is estimated at around 400 to 450 crore, with half or more going through google’s ad placement service. “The rates have moved up only about 10% in the last one year,” says Rathish Nair, head of online ad-buying agency Interactive Avenues. “English media readership is around 22 million and companies spend Rs 2,000 crore advertising on them. But for online, which has an audience of around 30-35 million, it’s only 400 crore,” he points out. Out of the 400 to 450 crore, around half goes to search advertising, which cannot be addressed directly by a social networking site. “The other side of the coin is that there will soon be a rebalancing of advertising priorities between print, online and broadcast,” according to Nair.

Open sesame? The industry however, is hoping that a new mode of advertising, apart from text and banner-ads will come up. Players are eyeing the path that carwale has successfully exploited - that of bringing the consumer to the company and getting paid for it. “A platform provider has a lot of information about the users... including their personal preferences etc. While, as of now, we are not sure how to use this, if done non-intrusively and creatively, this can be a good way to bring the buyer and the seller together,” says Kavita Iyer. Facebook gave users the option of having their purchase behaviour recorded, and if the brand pays for it, have that information disseminated among the users’ friends, giving it the value of a recommendation. It is however too early to say how many users will be comfortable putting their consumption patterns online. Roy, of bigadda, also points out the possibilities of communities of users based on a common theme - to the advertizers. “There can be a community around your product, which can be seeded by us... though the major contribution will have to come from DAR E the users".

Organizations DARE.CO.IN

covered in this issue, in alphabetic order; first appearance

Air Deccan ......................................... 42 Airchord ............................................. 68 All India Management Association Center for Management Education.... 94 Amatrra .............................................. 86 Ambica Jute Mills............................. 103 Amrop International ......................... 105 Ananda Spa ....................................... 84 APEDA............................................... 28 ASEED ............................................. 94 AsiaSpa ............................................. 88 Aspirant Systems............................... 78 Babajob ............................................. 22 Babson College ................................. 82 Badoo ................................................ 97 Barista ............................................. 105 Bebo .................................................. 97 BharatMatrimony .............................. 98 Bharti Airtel........................................ 97 Bharti Walmart ................................. 105 Bigadda ............................................. 97 Biocon................................................ 49 Body & Soul ....................................... 88 BrewHaHa ......................................... 92 Canaan Partners ............................... 98 Chicago Climate Exchange ............... 16 CII ........................................................ 8 CII-GBC ............................................. 51 Clean Development Mechanism Executive Board ............. 14 CNN ................................................... 97 Coca Cola .......................................... 55 Comscore .......................................... 97 Contests2Win .................................... 60 Corbis ................................................ 57 CosmoPro.......................................... 88 CSC ................................................... 51 D E Shaw......................................... 105 Design and Development .................. 51 DesiMartini ........................................ 97 DINAMALAR...................................... 11 Dinodia .............................................. 57 DKEE International ............................ 34 Duke University.................................. 22 eBay .................................................. 96 EDII.................................................... 94 Educomp ......................................... 105 Emergent Ventures ............................ 17 Emergent Ventures India ................. 104 EmmayHR Services .......................... 77 Enchanting India ................................ 39 Entrepreneurship Development Institute of India ................................. 94 Eros Group ........................................ 36 ESPA ................................................. 87 ESPN ................................................. 69 Essar Group ...................................... 10 EU-ETS ............................................. 16 Executive Access............................... 77 Export Development Canada .......... 105 Facebook ........................................... 25 Faceparty........................................... 97 FICCI ................................................. 94 100


Flickr .................................................. 96 Forbes ............................................... 33 Friendster .......................................... 97 Fringland............................................ 69 Fropper .............................................. 97 Frost and Sullivan .............................. 15 Fugumobile ....................................... 60 Galib Handloom & Handicrafts ......... 70 Gartner .............................................. 66 Getty Images ..................................... 57 GMR Industries.................................. 16 Goldman Sachs .................................. 8 Google ............................................... 39 Grasim Industries .............................. 16 Grundfos Pumps................................ 51 Gujarat Fluorochemicals.................... 16 Harley Davidson ................................ 55 Helion Ventures ................................. 82 Hi5 ..................................................... 97 Hindustan Hosiery ............................. 60 HITAM ................................................ 51 Hitwise ............................................... 97 House of Valaya ............................... 106 IBM Daksh ....................................... 105 ICICI Venture ..................................... 42 IIITM .................................................. 94 IIM Bangalore .................................... 93 IIM Calcutta ....................................... 94 IIM Lucknow ...................................... 94 IIM Ahmedabad ................................. 10 IIPM ................................................... 94 IIT Kanpur .......................................... 51 IIT Bombay ........................................ 22 IL&FS............................................... 105 Images Bazaar ................................. 58 IMM.................................................... 94 India Picture....................................... 57 Indian Angel Network ........................ 27 Indian Institute of Foreign Trade ........ 94 Indian Road Congress ...................... 35 Indian School of Business ................. 94 IndiaRocks ......................................... 97 Infosys ............................................... 49 ING .................................................... 81 INSEAD ............................................. 20 Interactive Avenues ........................... 98 International Chamber of Commerce .. 94 IStock Photos .................................... 57 ITC ..................................................... 51 iTrust .................................................. 76 JAM ................................................... 92 Jamia Millia Islamia ........................... 94 JSW Steel .......................................... 16 Jupiter Media ..................................... 57 Jux ..................................................... 97 JWT ................................................... 58 Kellogg Graduate School of Management.................................. 18 Kleiner Perkins Caufield & Byers ....... 81 Knp Sec Ltd ....................................... 11 Korn / Ferry International ................... 77 Luxury Spa Finder Magazine ............ 88 Macqarie .............................................. 8

Marlboro ............................................ 55 Mauj ................................................... 68 Maya, the spa .................................... 85 McKinsey ............................................. 8 Microsoft ............................................ 22 Mindtree ............................................ 78 MingleBox .......................................... 97 Ministry of Information & Broadcasting .................................. 10 Ministry of New and Renewable Sources ............................................. 10 Ministry of Tourism............................... 8 MIT/Sloan .......................................... 11 Mobile2Win ........................................ 60 ...................................... 22 MTV .................................................. 98 MySpace............................................ 96 Mystic Cures Spa .............................. 86 Nagarjuna Construction ..................... 42 NASSCOM ........................................ 20 National Science and Technology Entrepreneurship Development ......... 94 NATPAC ............................................. 34 ........................................ 22 NEN ................................................... 93 Netlog ................................................ 97 Netxcell .............................................. 68 News Corp ......................................... 97 NIESBUD........................................... 94 Nimbuzz............................................. 69 NMIMS............................................... 93 NSRCEL ............................................ 93 NTT DoCoMo ................................... 66 NYTimes ........................................... 97 O2 ...................................................... 66 Orkut .................................................. 25 Orkut .................................................. 97 Paharpur Business Centre ................ 51 Pantaloon Retail ................................ 42 Patni .................................................. 51 Paymate............................................. 69 Peter Cooper CRAM ......................... 55 Pevonia Spa Care .............................. 86 Photo Media ...................................... 57 PicScout ............................................ 58 Piczo .................................................. 97 Pinstorm ............................................ 60 Porsche.............................................. 55 PositiveClimatecare ........................... 16 PricewaterhouseCoopers .................. 15 Priya Village Roadshow ..................... 10 PTC India Financial Services .............. 8 QiQ International Ltd ......................... 55 Radisson resort ................................. 84 Raymonds ....................................... 105 Rediff ................................................ 97 Reliance Anil Dhirubhai Ambani group .................................... 96 S P Jain Institute of Management and Research ........................................... 94 Seedfund ........................................... 98 Sequoia Capital ................................. 97 Shoppers’ Stop .................................. 44

Sierra Ventures ................................ 105 SKG Sangha ..................................... 15 Skyrock Network................................ 97 Small Industries Service Institute ...... 94 Socio Economic Unit Foundation ...... 11 Softbank ............................................ 60 Spa and Wellness Association of India ............................................... 88 Spa Magazine.................................... 88 SpaEquip ........................................... 88 Spectral Services Consultants .......... 51 SpiceJet ........................................... 105 Srishti Khanna ................................... 85 Stanford University ............................ 81 STAR India......................................... 66 Stayfriends......................................... 97 Stephen M Ross School of Business ...................................... 105 StudiVZ Sites ..................................... 97 Subhiksha .......................................... 42 Sun Pharma ...................................... 78 Sunlife................................................ 81 Symbiosis Center for Management ... 94 Taj Land’s End ................................. 103 Taj Spa............................................... 88 Tanlamobile ....................................... 68 Tata Spongem Iron ............................ 16 TeamLease ........................................ 80 Technogym ........................................ 88 Technopolis........................................ 51 TechProcess Solutions ...................... 42 The Ashok hotel................................. 85 The Entrepreneurs Club .................... 11 The Indus Entrepreneurs ................... 20 TiE Kolkata ...................................... 102 Tutor Vista ........................................ 105 UK-ETS ............................................. 16 UNFCCC ........................................... 16 Union Minister of Commerce & Industry ............................................ 8 United Nations ................................... 15 University of Michigan ..................... 105 Urbane Autopark India Pvt. Ltd.......... 34 US Green Business Council .............. 51 Village Road Show ............................ 74 Visage Images ................................... 57 Wadhwani Center for Entrepreneurship Development...................................... 94 Walt Disney Group............................. 60 Welcomenviron Initiatives .................. 51 Welspun............................................. 42 Westin Hotels and Resorts ................ 84 Winrock International ......................... 15 Winrock International ......................... 18 Wipro ................................................. 51 World Bank ........................................ 10 World Presidents Organization .......... 91 XIM .................................................... 94 XLRI................................................... 94 Yaari................................................... 97 Yahoo................................................. 39 Youtube.............................................. 96 Zee Network ...................................... 11


covered in this issue, in alphabetic order; first appearance

Ajay Bijli ............................................. 72 Ajay Singh ....................................... 105 Al Gore .............................................. 15 Alan Meckler ...................................... 57 Alex Metzler ....................................... 38 Alok Kejriwal ...................................... 60 Alok Mittal .......................................... 98 Amartya Sen...................................... 33 Anil Ambani ....................................... 33 Anil Chawla...................................... 105 Animesh Dasgupta ............................ 77 Anirudh Krishna ................................. 22 Anish Achuthan ................................. 11 Anjan Raichaudhuri .......................... 94 Ashish Kataria ................................. 103 Ashutosh Pandey............................... 17 Bal Govind ......................................... 11 Bala Deshpande ................................ 42 Bala Vissa .......................................... 20 BG Sreedhhar ................................... 11 Bharti Gupta Ramola ......................... 15 Bill Gates ........................................... 57 Bob Dylan ........................................ 106 C K Prahalad ................................... 105 Capt. G.R. Gopinath .......................... 46 Charles Cormier ................................ 18 Chetan Agarwal ................................. 18 D Vidya Sagar.................................... 15 Dhirendra Kumar ............................... 15 Dhruv Agarwala ................................. 76 Dinesh Divakaran ............................ 103 Dr K Balachandra Kurup.................... 11 Dr R Lakshmipathy ............................ 11 Dr Shaswat Chandra ......................... 86 Dr. Abhishek Nirjar ............................. 94 Dr. T. Elangovan ................................. 34 Dushyant Mehta................................. 57 Gita Dang .......................................... 77 Gowri Shankar Subramanian ............ 78 Haji Qamru-u-deen ........................... 70 Heidi Neck ......................................... 82 Hemant Mehta ................................... 57 Ira Weise............................................ 22 Issac John ....................................... 102 J J Valaya......................................... 105 J.Frank Brown .................................... 83 K Ganesh......................................... 105 K Gangadharan ................................. 11 K. Subramanian ................................. 34 Kalpana Jaishankar ........................... 51 Kalyan Manyam ................................. 97 Kamal Meattle.................................... 51 Kamal Nath .......................................... 8 Kanwaljit Singh .................................. 81 Kartik Varma ...................................... 76 Kavita Iyer .......................................... 97 Kiran Mazumdar-Shaw ...................... 49 Kris Gopalakrishnan ........................ 105 Krishna Kumar ................................... 83 Laura Parkin ...................................... 93 Madhu Bhojwani ................................ 77

Mahesh Murthy .................................. 60 Manish Agarwal ................................. 97 Manish Sabharwal ............................. 80 Manoj Dawane................................... 68 Mark Getty ......................................... 57 Meenakshi Jain.................................. 16 Mike Lanza ........................................ 81 Mukesh Ambani ................................ 33 N V Subba Rao .................................. 68 Narayana Murthy .............................. 49 Narsimha Rao.................................... 48 Niranjan Khatri ................................... 51 P Chidambaram................................... 8 Padmaja Ruparel ............................... 27 Parikshat Laxminarayan .................... 38 Parimal Merchant ............................ 103 Pavan Vaish ..................................... 105 Peter Nesbitt .................................... 105 Pradeep Bhandari............................ 105 Pradeep Gupta .................................. 83 Prakash Mundra ................................ 82 Pravin Gandhi .................................... 98 Preety Kumar................................... 105 Probir Roy.......................................... 69 Rajiv Gandhi ...................................... 48 Ramu Yalamanchi .............................. 97 Randy Komisar .................................. 81 Ranjit Singh ....................................... 60 Rashmi Bansal .................................. 92 Ratan Tata ......................................... 33 Rathish Nair ....................................... 98 Ravi Deol ........................................ 105 Richard Sandor.................................. 18 Rupert Murdoch................................. 97 S Srinivas .......................................... 51 Sabuj Sengupta ................................. 58 Samir Ahluwalia ................................. 11 Samrat Majumdar .............................. 68 Sandeep Maheshwari ........................ 58 Sanjay Sinha ..................................... 68 Sanjeev Bijli ....................................... 74 Sashi Ruia ......................................... 10 Sean Blagsvedt ................................. 22 Shahzaad Dalal ............................... 105 Shantanu Prakash ........................... 105 Siddharth Roy .................................... 98 Siddhartha Shankar........................... 86 Srishti Khanna ................................... 86 Sun Tzu ........................................... 106 Sunny Kapoor .................................... 11 Suresh Rao...................................... 103 Tina Seelig......................................... 81 Vibhore Goyal .................................... 22 Vidur Bhardwaj .................................. 51 Vijay Chintamaneni............................ 57 Vilas Muttemwar ................................ 10 Viren Popli ......................................... 66 Vishnu Pillai ..................................... 103 Vispi Daver ...................................... 105 Vivek Dharia ...................................... 11 VP Reddy .......................................... 37

DARE is not an acronym. It represents the daring spirit of the entrepreneur. The red color for the R of DARE represents the fire in the belly of the entrepreneur. You could think of the D representing the face, A representing the chest, R representing the belly and E representing the feet of the human body. Hence the red R. The entrepreneur dares to do things. (S)he dares to do things differently

SMS “DARE <your comments, questions or suggestions>” to

56677 DECEMBER 2007 101


So much more for your money Well-designed programs benefit students, companies and institutes


repeat: The bidding will close in two minutes. Thank you!” shouts Issac John, a student from SP Jain Institute of Management and Research (SPJIMR). No, it’s not the BSE or an auction house. Rather, Issac is emceeing for Lock, Stock and Trade, part of a highly innovative entrepreneurship program, co-designed by the faculty and students of SPJIMR and the National Entrepreneurship Network, NEN. Lock, Stock and Trade, or LST as it is commonly known, was launched in 2004 by SPJIMR to anchor their new entrepreneurship programs. The unique effort combines a hands-on, semesterlong course with an extremely interactive public event. LST packs in a surprisingly wide variety of activities into a compact timeframe. In the process, the program

reaches out beyond SPJIMR students, to engage entrepreneurs, investors, family businesses and students from institutes across the region. When they launched the program, SPJIMR faculty members hoped it would bring entrepreneurship into the lives of MBA students focused only on getting jobs. Professor Suresh Rao, director, Entrepreneurship Development Center, SPJIMR, explains, “We want the students to feel that there is a future in entrepreneurship.” During the course, MBA students are paired with family businesses represented by students in SPJIMR’s Family Managed Business course. The students spend a month working with the entrepreneurs and the businesses, understanding the value propositions, and exploring potential new opportunities for them.

NEN, the National Entrepreneurship Network, supports new and future entrepreneurs with information, experts and community. NEN is India’s leader in entrepreneurship education, working with over 280 academic institutes to build world class entrepreneurship programs on their campuses, reaching over 300,000 young people.



NEN: upcoming event i2I 2008: B Plan competition, with a twist When:

December 14, 2007 (last date to submit executive summary)


IIM Calcutta


Open to everyone under 30: students, working professionals, and new entrepreneurs

Event focus Winners of i2I competition (ideas to Implementation) become eligible for up to one crore of funding from Seedfund. Selection process Form your team – across institutes and/or companies – and submit an executive summary. 40 teams in 4 cities will be shortlisted for semi-finals in Delhi, Mumbai, Bangalore and Kolkata. 10 teams will be selected to present at the Grand Finale on February 1, 2008 in Kolkata. Semi-finalists can access mentors from local & national level expert panels. Co-hosts Seedfund, TiE Kolkata, NEN More info at

DARE.CO.IN “A student from a non-entrepreneurial background might think that entrepreneurs are a different species in comparison to a corporate executive. For them it’s a great learning experience to see first hand how an entrepreneur operates,” explains Rao. The students confirm the impact the course has had on their outlooks. “Having analyzed 18 businesses, we now understand how one starts a business, what it takes to grow a business, and then make a proposition to the public while coming out with an IPO,” says Dinesh Divakaran, core team member, LST 2005. The course culminates in the public event, Lock, Stock and Trade (LST). The original idea for LST was sparked by investment banking conferences in the US, where multiple companies present their value propositions. But LST takes this to the next level, allowing all participants to join the fun. At the event, the companies the students have worked with during the course present their businesses and offer mock “shares” on which the participants bid. SPJIMR students and faculty have built a trading system that enables the bidding to set the market value of the shares. At the end of each trading session, the system totals the value of participants’ “portfolios”. LST’s winners include the participant with the top value portfolio; the company with the highest market capitalization; and the “banker” representing the top valued companies. At the event, the frenzy for stocks is palpable. Five hundred participants huddle in groups, wrestling with decisions: which presentation to attend? Which stocks to buy? How much to bid? Kiran Mazumdar - Shaw, the inaugural year keynote speaker, was seen peering over students’ shoulders, comparing stock picks with them. In fact, Prof Parimal Merchant, Family Managed Business Professor, SPJIMR, feels calling LST a game fails to recognize its full impact. He explains, “I would say this is a one day workshop on entrepreneurship. In my opinion, those who attend find their own dream will start taking shape.”

The workings of the game—from design, to execution—lies in the hands of students, with a great deal of support from both SPJIMR faculty and the NEN team. And perhaps even more than through their coursework, the students build their entrepreneurial skills by developing and running the event. “The experience was about handling emergencies, contingencies, developing people skills, getting people together and focused on a common objective, despite the fact that we had crunching academic schedules back in our college,” explains Vishnu Pillai, a founding core team member of LST. “We can produce a fantastic blue print which might be eligible for a Nobel prize 20 years later. But it’s only at the execution stage that you come across the weak spots,” Vishnu concludes. In fact, the course and running the event proved extremely demanding on the students – so much so that the faculty wondered how many of the next batch, having witnessed their seniors’ efforts, would sign up. They need not have worried. The response was colossal. “We had practically the whole of second year class applying for it, based on the word of mouth impact of the earlier year’s students,” says Rao. Indeed, the success of the program jumpstarted all of SPJIMR’s entrepreneurship activities. Benefits have flowed beyond the students and the institute. Many of the

businesses that the students analyzed have gained as much as the students. Ambica Jute Mills, a Calcutta based company that was a participant at LST 2005, is one of these companies. For entrepreneur Ashish Kataria, working with the students was an excellent experience. “They came up with many good strategies and issues,” he says. Additionally, Kataria explains, “Traditionally, family businesses have rarely been listed. Exposure to an IPO process brings us to a huge door with lots of opportunities, the areas where we can learn, develop and grow so much.” LST is now in its fourth year. The event has grown from 15 participating institutes in 2004, to over 25 institutes. And this year, LST reaches beyond India, to showcase international companies. But in the end, it’s the affect on the next generation of entrepreneurs that matters most, and for this, LST seems to hold the right formula. Vishnu summarizes, “Doing an MBA, for us, meant working with a big company for 20 years and retiring at the age of 4550. But this experience got me thinking: why not work in a corporate, earn some money, gain experience and then, become an entrepreneur!” The next LST will be held January 19, 2008 at Taj Land’s End, Mumbai. More information at D A R E Content provided by NEN DECEMBER 2007 103


Run-up to the big day The TiE Entrepreneurial Summit 2007, to be held on December11-13 this year in New Delhi, promises to be a grand networking and mentoring forum for entrepreneurs


t’s that time of the year again when the proverbial great Indian entrepreneurial community converges at one place. TiE, the global not-forprofit organization founded by prominent entrepreneurs from the Silicon Valley, also known as the Indus Entrepreneurs, are all set to host the TiE Entrepreneurial Summit 2007, its annual entrepreneurial event from December 11-13. The point of convergence, this time, is Taj Hotel, New Delhi. Networking and mentoring will figure high on the agenda at the summit. Besides this, aspects of funding and deal-flow will also be covered to close the gap of entrepreneurial wants. The event will see participation from 17 TiE chapters spread across Asia, with an attempt to make it a pan-Asian collaborative international event. Traditionally, though, TiE, being an initiative of entrepreneurs from the Silicon Valley has been popularly associated with IT in general, this year’s event seeks to

The tree plantation drive conducted by the New Delhi chapter of TiE on November 17, 2007, set the right tone for making the upcoming Entrepreneurial Summit, an environment-friendly one. With support from Emergent Ventures India, a consultancy offering climate change mitigation services, TiE had rightly chosen the tree plantation drive as the harbinger towards making climate-friendly technology one of its focus areas this year. On the morning of November 17, around 150 people gathered in the Garhimandu City forest area on the Wazirabad Road to plant 2,000 saplings made available by the Department of Environment for the same. Those who participated in the plantation drive included TiE members, families and many school and college students, many of whom turned up in green t-shirts to drive home the point. For transportation, fuel-efficient buses were utilized and participants were encouraged to use common transportation to reduce fuel consumption and carbon dioxide emission. The exercise was unique in itself, since this was the first time in the country that a global not-for-profit organization had undertaken to offset its projected energy consumption and carbon footprint associated with an event. TiE is now trying to replicate the same in all other chapters in major cities. Coupled with adequate media coverage, it will not be surprising if it marks the beginning of a trend. 104




/tie focus on media, microfinance, clean tech and social entrepreneurship. According to a TiE press release, around 1,500 delegates, including entrepreneurs, investors, service-providers, academicians and policy-makers are expected to attend the summit. The speakers for the event include C K Prahalad (Stephen M Ross School

of Business, University of Michigan), Kris Gopalakrishnan (Infosys), Pavan Vaish (IBM Daksh), Alok Mittal (Canaan Partners), Ajay Singh (SpiceJet), Kavita Iyer (Minglebox), Pradeep Bhandari (Raymonds), Anil Chawla (D E Shaw), Vispi Daver (Sierra Ventures), Peter Nesbitt (Export Development Canada), Shantanu Prakash (Edu-

comp), K Ganesh (Tutor Vista), Ravi Deol (ex-Barista and Bharti Walmart), Shahzaad Dalal (IL&FS), Preety Kumar (Amrop International), and J J Valaya (House of Valaya) The perspective is broader in concept, but more channelised in execution. The level of maturity in the conception of entrepreneurship as perceived by those involved in the same is reflected in the agenda that TiE has laid down for the summit. Networking, which comes gratis with almost every TiE event, has been upgraded to a more expedient level. TiE has, this time, launched an online networking tool that would enable all the registered delegates of the event to interact with one-another before the summit and even fix meetings during the summit! As stated in its press release, a delegate will enjoy the privilege of inviting upto 50 other delegates to such meetings and a non-delegate would be able to invite upto 5. Hence, the summit, this time, has been structured in a very flexible fashion to accommodate such meetings. Mentoring, which TiE considers its key value proposition, will be done through Mentoring Clinics focusing on one-on-one mentoring of an entrepreneur by a senior entrepreneur based on the education, views and experience of the budding entrepreneurs in the given industry. Such senior entrepreneurs could be anybody ranging from a seasoned professional to a veteran TiE member with experience in the given field. In addition to networking and mentoring, TiE has introduced the Deal Flow and Showcase events, which would allow entrepreneurs to showcase their business plans and let them be scrutinized by relevant funding sources. The shortlisted plans would be presented in the investor sessions to be held during the summit. This would not only provide entrepreneurs with a chance to hit the funding jackpot, but would also allow the investing community a sleek peek into the new investing frontiers arising in the country. More information can be obtained from DAR E DECEMBER 2007 105



Ten things

says is true

l Focus on the user and all else will follow.

l It’s best to do one thing really, really well.

l Fast is better than slow.

l Democracy on the Web works.

l You don’t need to be at your desk to need an answer.

l You can make money without doing evil.

l There’s always more information out there.

l The need for information crosses all borders.

l You can be serious without a suit.

l Great just isn’t good enough.

There was a farmer who grew superior quality and award-winning corn. Each year he entered his corn in the state fair where it won honor and prizes. Once a newspaper reporter interviewed him about how he grew it. The reporter discovered that the farmer shared his seed corn with his neighbors. “How can you afford to share your best seed corn with your neighbors when they are entering corn in competition with yours each year?” the reporter asked. “Why sir," said the farmer, “didn’t you know? The wind picks up pollen from the ripening corn and swirls it from field to field. If my neighbors grow inferior, sub-standard and poor quality corn, cross-pollination will steadily degrade the quality of my corn. If I am to grow good corn, I must help my neighbors grow good corn.”

“If you know the enemy and know yourself, you need not fear the results of a hundred battles. If you know yourself but not the enemy, for every victory gained, you will also suffer a defeat; if you know neither the enemy nor yourself, you will succumb in every battle”

Sun Tzu – The Art of War

Come writers and critics who prophesize with your pens And keep your eyes open, the chance won’t come again And don’t speak too soon, the wheel’s still in spin And there’s no telling who that it’s naming Oh the loser will be later to win For the times, they are a changing - Bob Dylan 106 DECEMBER 2007

“In every industry, companies with similar antecedents and strategies grow differently. Some grow with metronomic regularity to become leaders; others grow in fits and starts and often languish and die or get acquired. While several attributes define successful companies, one is often overlooked. Their ability to scale”

- Infosys annual report 2004-05

“Both managers and teenagers inhabit worlds in which they are outcasts if they are not doing the same thing as everyone else”

- Sense and Nonsense in the Office

#03 - DECEMBER 2007  

VC Funds PE Funds Few Crores Angel Investors BOARD OF ADVISORS C K Prahalad University of Michigan N R Narayanamurthy Chief Mentor, Infosys...