René Seifert

Entrepreneur, Global Citizen, Flat World, Internet, Web 2.0, Innovation, Start-Up

Archive for August, 2008

Discovering Greatness: Spasibo, EO St. Petersburg

At 11 pm these days looking west from the Hermitage to the Vasilevsky Island, you can still see the silverlight from the famous "White Nights" of this northern metropolis. This was pretty much the sight which we had for our memorable gala-dinner from the balcony of Vladimir Palace during our closing ceremony. And in the inside it didn't look ugly either.

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I fell in love with this city in 2002 when I spent three weeks here to learn Russian and stay with my Russian family. Now coming back for our EO European/African Conference, I realized that a lot had changed (the Church of the Saviour on Blood was fortunately still in place :-)

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Apart from that, most remarkably, while in 2002 you could still have dinner with the cosy feeling of paying "Eastern prices", you would now have an Eastern dinner paying entirely Western prices. Not to mention property, where the going rate for the square meter in the centre ranges from US-$ 30,000 to 40,000. Overall, the magnificence of the city stands in even better splendour as it was refurbished for its 300 year celebration after being founded in 1703 by Peter the Great.

Our hosts from EO St. Petersburg under the leadership of Steve Caron, Sergey Vykhodtsev, Christian Courbois, Dmitry Agarunov (Moscow) together with the event-expertise from the EO staff brought together a real "Once in a Lifetime Experience", something EO is rigorously dedicated to. The event was a perfect mix of learning sessions, dine-arounds, social events and came – thanks to a compact group of around 50 people from 26 chapters – with strong personal bonding. Our Grand Hotel Europe as the venue in itself was a living piece of Russian history. 

From the learning side, the first day started with a panel of our St. Petersburg chapter sharing their stories how they started off in the "Wild East" 15 years ago getting kidnapped, held for ransom, smuggling US-$ 1.5 mn in an old car with their head of security carrying a machine gun, smuggling valuable dogs in the plane to Beijing etc. (I thought I had seen and heard a lot in India, but these stories are all petty-theft against the environment when the Soviet Union transformed itself a sort of "kiosk capitalism"). We had a fantastic session with marketing guru Thomas Gad, author of 4D-Branding where the 4 dimensions stand for functional, mental, social and spiritual, like here exemplified on the world famous brand "Red Bull":

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What I always perceive particularly inspiring is when we have senior EO members sharing their experience like Mark Moses did on "Overcoming Adversity in Business and Life". His story carried enormous "goose pimple"-factor with his best friend severely betraying him in business, the office getting on fire, his child suffering from a brain tumour, yet Mark still keeping head above the mud, growing even bigger and condensing his experience in tangible learnings with great take-home value for others.

On the event side, our friends in the "Venice of the North" were able to pull some magic strings which allowed us to do something which is usually completely out of reach: a private tour in the incomparable Hermitage in the night hours when the museum was already closed to the public. It was a very memorable opportunity to immerse in the beauty of the art collection comprising reminiscence of Russian history and Western artists like Leonardo da Vinci, Rembrandt or Van Gogh whose last picture before his suicide at the age of 37, "Thatched Cottages" is part of the collection. 

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Ah, and there was Vodka, and even more Vodka. As a good rule, keep drinking only Vodka, it will have its certain effect, but you won't have a headache the next day. By contrast, a very bad idea is mixing champagne with beer and Vodka. (I was oblivious of the latter and had to pay a bitter price after the first night out). So repeat after me: Vodka alone = good, Vodka in da mix = bad.

And last but not least, I met my family again, it was a warm-hearted reunion from the very first moment, as if I had departed 6 days ago and not 6 years ago. As the habit goes, Igor (=the father) and I had put a "a few" kilogram on, Ira (=the mother) is still as elegant as she always used to be and little Ksusha (=the sister) was a baby and will have her first school day on September 1st. Especially Ksusha overtook me big time: 6 years ago I was much better in Russian than her, and now the scenario has entirely reversed. 

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And, yes, of course, there was Vodka again. (Only Vodka = good.) And as the Russian bear had been on our plate in the shape of sausage in the restaurant Zver, we felt obliged to toast him in a respectful way, too.

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The entire picture set of the journey, by the way, is here on my Flickr-Account. St. Petersburg is one of these place you have to see before you die. Even more as there are two opportunities to see two totally different faces of the city. In summer with the white nights where the sun sets at 1 am and rises at 4 am, where the skirts of the girls parading on Nevsky Prospect are pretty short, and in winter when the sun rises at 11 am and sets at 3 pm, when the temperature drops to minus 30° C, where thick furs are covering those same girls, theatres as well as operas are in full swing and Vodka is the fuel to provide both warmth and happiness.

Spasibo (=thank you), to EO St. Petersburg of having us and giving us the truthful hospitality which only a Slavic heart can convey. 

St. Petersburg, tomorrow I’ll be back

One of the most fascinating cities of the world for me still is St. Petersburg where I spent three weeks in 2002 during my 1-year-sabbatical. At that time, I took daily private lessons in Russian which is a comparatively difficult language with its different script, complex grammar and many exceptions. Yet my Slavic language background played into my hands with a natural advantage. Also I really loved the city for its very unique flair which is by far much more soaked in living culture than fast-paced Moscow. Also a phenomenon that stunned me at that time was that from 5 pm, half of the pedestrians on the main boulevard "Nevsky Prospekt" would drink from an open bottle of beer. No matter if the 60-year-old alcoholic or the 16-year-old pretty girl.

And, St. Petersburg, tomorrow I'll be back. For the whole week till Monday, this time for the European & African Conference of our Entrepreneurs' Organization. Our hosts have put a phenomenal programme together, about doing business in Russia, general learning events on entrepreneurship as well as the very unique exploration of the city's culture, cuisine and clubbing. 

What is more, next Sunday I am super-happy after six years to meet my Russian family again, the family that hosted me and where I in fact not just started to talk Russian, but felt deeply embedded into daily Russian life. So till today when we have been in touch via E-Mail, Igor calls me "my son" :-) And the best of all that on Saturday, the Telnjashka-Event is on again!

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The Telnjashka is this typically blue-white striped shirt of the Russian Navy. In the annual tradition, Igor (in the cap front line), his family and many friends would do a march through the pretty cold sea, carrying food and drinks (basically Vodka and beer only) and have a BBQ in a forest adjacent to the city. I remember the event with memories about the best what Russia has to offer: happiness combined with hospitality. The other picture which I just dug out from 2002 is me in Telnjasha (right side, now the cap in on my head) trying to balance my "opponent" out on the tree.

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The end of the story:  The "opponent" outbalanced me effortlessly and the only thing I could do is find comfort about my bitter defeat in Vodka galore ;-) Na zdarovlje (=cheers)! 

“IT Product Conclave” in Bangalore: Moving Upscale

Recently I have reduced a little bit on my conference tourism, but didn’t want to miss the opportunity while being at home in Bangalore. On Monday and yesterday, there was the IT Product Conclave & Expo of the India’s formidable IT-association NASSCOM . Formidable for the reason as I have attended the NASSCOM Leadership Conference twice already which attracted speakers like Thomas Friedman, Amartya Sen or then India's President A.P.J. Abdul Kalam.

This was in the heydays of the industry which so far has relied entirely on services, this means running a business model which scales predominantly by adding more and more people based on  – however sophisticated – labour arbitrage. As one of the forte's if the industry has evolved the capability for designing, building and maintaining e.g. a complex and specific system for a particular banking client. Obviously, as markets tend to gravitate towards efficiency, the realizable margin gets squeezed by the supply-side soaking up the available scarce talent. Moreover, macro-factors like the rising Rupee against the US-$ have added additional pressure on the profitability, not to mention the ugly “R-Word” (for recession) which is spooking around.

Things are not outright shitty nowadays, but the concern has been for quite some while where the growth will come from. Therefore, with some foresight, 4 years ago NASSCOM initiated an innovation agenda which got conceptually supported by Boston Consulting Group, addressing the question how to build industries which will sustain the next 20-25 years on a much wider canvas. One of the key conclusions was that “software products” would prove a path to higher value businesses than just army of “programming coolies” (old quote from Sharad Sharma, CEO Yahoo! R&D India). Products are ultimately the best way to “package, store and disseminate organizational knowledge”, as my fellow EO-member Atul Jalan from Manthan Software set forth. Moreover, as products implicate a more immediate level of competition, they foster stronger innovation which in turn is able to churn up better products which in turn will command a higher price. Here the Indian cost-advantage clearly plays into the hands of product-companies and can get a virtuous cycle started.

It is worthwhile taking a look at the current state of the Indian software product industry:  In the FY 2008 it turned over US-$ 1.42 bn with a CAGR of 44 % within the last 3 years – (which is a 50 % higher growth rate that the much more mature older brother of “IT services”). Another good sign is that from the currently 370 software product companies in the Indian market, two-thirds have been incepted within the last three years. However, looking at how the revenues are distributed, there is a typical “long tail” or a power law (or as a proper German would say “a problem of justice” ;-) The Top 10 together aggregate 84 % of the market – and the rest of 360 companies, well, the rest.

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Equally interesting is to take a step back to slice and dice what “software products” actually means. Not too surprisingly, as the Indian IT-industry has had extensive time to gain experience in the last 10 odd years, the clear focus lies in B2B-enterprise-applications within the following areas.

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Interestingly my other major field of entrepreneurial activity, the B2C high-scale internet platforms do not show up here – or to put it the other way around NASSCOM does not categorize them here under products and/or does not feel that those fall under NASSCOM’s primary mentoring requirements. And I frankly don’t have a clue why this is as many of the abstract criteria used for “IT products” clearly apply also to portals, platform, social networks and the likes. Or NASSCOM has an incomprehensive view on that sector because e.g. “search engines” or “online search” are being named, likewise in another study “mobile games” morphing more generally speaking to “mobile applications”.

NASSCOM sees its role as a catalyst for achieving the BGAG (big hairy audacious goal) of catapulting the software product industry to a volume of something between US-$ 9 to 12 bn by 2015. The support of the organization would happen on multiple levels like exactly this and further conferences, providing best practises, incepting its own fund, but above all providing a shift in the hearts and minds of entrepreneurs to go the more difficult but more rewarding product route.

Finally, looking at markets, one true “paradigm shift” (I am really careful with this overused term) is taking place. In the first place, India as a domestic market in various sectors like Telecom or Retail is all of a sudden sufficiently big to get a software product to market. Moreover, the normal and necessary route for internationalization would have always led to the U.S. – This is no longer so. The Chinese market has proved to be a potential “next territory”, given a similar maturity of the industries into which to sell. And, last but not least, the Middle East. There, as IDG Ventures India CEO Sudhir Sethi explained “buyers feel much more comfortable buying security software from Indian vendors than from those based in the U.S. or Israel.”

Call to Prayer from the Mosque in my Neighbourhood

In the beginning when I moved to Bangalore, the morning chanting at 5 am from the muezzin used to wake me up, before I turned over and continued to sleep. After a few weeks, I did not notice his singing and more, and if, then I could distinguish that the mosque on Richmond Road in my neighbourhood (picture below) had two different muezzins in charge. Each of them had his own style, and naturally, their voices were different.

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Today, for some reason, I was awake at 5 am and heard the muezzin chanting, and a minute later the bells of catholic St. Patrick's Church started to ring in parallel. And this in a country of, not to forget, an 80-percent Hindu-majority. That indeed one of the miracles of India, where secularism is embroidered in the constitution not for the sake of absence of religions, but as the very foundation for the diversity of them. Given the 1bn population, this arrangement has worked with few exceptions amazingly well. 

Although in share a clear minority, India is in absolute terms of 150 mn after Indonesia home to the most number of Muslims worldwide. Shashi Tharoor, author of "The Elephant, the Tiger and the Cellphone" rightly points out that this tolerant and secular outlet of India has been a guarantee that Muslims in India feel intrinsically Indian as opposed to having a possibly natural affinity to Pakistan which was formed as an Islamic Republic after the Partition in 1947. 

After listening to the muezzins of my neighbourhood for more than four years, if not in the early morning then at the other four occasions a day, I always have considered their call for prayer bearing something solemn. Also, I wondered what they were actually chanting. The beauty of the internet of 2008 is that the knowledge which was always there, is all of a sudden equally distributed. So I found this enlightening piece on YouTube which comes apparently from a mosque in Bosnia and carries "subtitles". "My" muezzin in Bangalore just chanted for the evening prayer, I listened, compared, and for the first time after four years, I felt to comprehend. 

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