Archive for the 'Technology' Category
I joined MumbaiAngels: Private Equity investments in India
What I wanted to briefly write about already in the last few weeks is my engagement in an amazing group of entrepreneurs and top-executives in Bombay (Mumbai): The MumbaiAngels. What we would call a “Verein” in Germany, has the shape of an association of currently 40 individuals who have an interest in investing their money in prospective start-ups and early-stage companies in India.
The association has been set up one year ago, spearheaded by my friend Sasha Mirchandani who is a seasoned entrepreneur and currently the Head of India for BlueRun Ventures. How MumbaiAngels works is easily explained: We meet every 6 weeks in Bombay and three to five pre-selected companies would pitch in front of us: 15 minutes sharp followed by a friendly but critical Q&A-session by the potential investors. Each angel is entirely free to express independently interest in a particular company through a feedback form. At the end all the forms get aggregated internally whereby the level of interest in a particular company could (and maybe should) also help as an indicator of attractiveness from the “wisdom-of-crowds” perspective.
In the next step, say if 9 people have interest in a particular company, they would go along for a joint due diligence, deal structure into which each individual would invest the amount of money he or she wants to commit. Overall, from my experience of building up an incubator, I am quite impress about the level of maturity for the processes which are critical to come to terms from filtering interesting investment targets to having the investment in place.
The sectors we are looking at have not been defined too narrow, and right so. Ultimately, it should be something that scales well, because it either organizes and unstructured industry in India with its huge market potential behind, addresses a clear need or something which contains a technology-driven nucleus whose economics are prone to disproportionately fast distribution and foreseeable revenues. (My personal investment-appetite goes very much to the latter, certainly because I have some sort of expertise in the tech, media, internet and mobile-space.)
The advantage for entrepreneurs seeking for investments to address Mumbai Angels is manifold: The investors involved bring extensive experience in building and growing business to the table, where the Q&A session during the pitch alone can ask the right questions to tweak and turn something in the plan or model. Moreover, MumbaiAngels are far beyond just throwing “dumb money” at you, then sitting on our hands and waiting what returns we’ll receive. What we are looking for is an active role via ongoing mentoring, door-opening to customers or partners and access to capital for the subsequent rounds of funding.
I am glad to be part of that fine group. If you are an entrepreneur seeking start-up capital for a venture in the Indian market, feel free to address me. I will see what I can do for you and what I can do for us - the MumbaiAngels.
“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.
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.
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.”
8W8: Taking Globalization and the Internet to the next Level
Yesterday evening in Munich I listened to a speech from the CEO of Boston Consulting Group Hans-Peter Bürkner about "globalization", an issue that has my natural affinity. Yet, the speech as such I found rather "moderately novel" as its main lines of thought were put forward by Thomas Friedman already 3 years ago in “The World is Flat”. Especially, Mr. Bürkner's part about the role of governments was more of wishful thinking than a reality-based account on the true interests of such a body which is depending on a free electorate.
Anyway, in case someone is interested on more vision and foresight in terms of "what's next" on the global scene, being addressed from an entirely different angle in the shape of a novel, I happily recommend 8W8. The author is Ralf Hirt whom I met in January after moderating the India-panel at the DLD-conference in Munich. It's instrumental to understand the background of Ralf to become clear on both his motivation and insight: He has held leadership positions in the internet industry for a decade and has lived all over the world, in his home town Stuttgart, Hong Kong, Sydney, London and currently New York. In crossing these two lines of experience extrapolating their status-quo plus visioning with lots of foresight, he conceived his first book 8W8. It is worthwhile mentioning that the book is indeed fiction, yet the concept of a "new world modelling engine" are not so far away that this book would fall into the category of "science fiction".
Well, what is it about? The storyline deals with 15 high calibre people from of the "Golden Sky", a community committed with the aspiration to change the world for the sake of good. These 15 people come from a whole array of diverse backgrounds, like Oskar Feller, an editor for a leading internet magazine, Maria who is a doctor developing high-scale programmes to fight HIV/AIDS, Priyanka from India who is an IT-crack working for a global media company or Emanuel, a philosopher and Taoist who has been named for the Nobel Prize. All the characters of the story are here on the 8W8-blog. This group of people is hosted by Winston Chee, a billionaire internet-entrepreneur from China in his island on Hawaii EA-RA.
In this serene and secluded environment, the 15 brains spend a whole week picking each other brains and inspiring each other to solve one crucial problem: How to make the interrelations of economies and people visible in a sort of virtual map-overlay on top of the existing geography. What they come up with is the new world modelling engine "8W8" which can be pictured as a virtual helicopter the "pilot" would use to fly over the terrain of the earth to make these invisible connections visible. Delving even deeper into the concept it transcends into a new form of radical constructivism as the vision the pilot would receive on his dashboard would be a crossover between absolute measurable truths and his set of values/selective perception. What the pilot would get to see is both on “earth level” and on “sky level” the “volumes” of a whole set of parameters. The former range from hard factors like population, GNP, metrics on infrastructure, public institutions to innovation, the latter comprise for example metrics for democracy, human rights, quality of living, level of terrorism and such.
Yet, what is more that beyond statistics on GNP or PPP which are available as top-level data today, 8W8 equally entails a bottom-up approach from the level of the “element” (individual) which will aggregate in “streams” into “Global Space Tribes” according to its interest, e.g. “MBA Jazz Wireless Tribe (MBAJWT)”, “Catholic Fast Food Blue Collar Single Mother of Four (CFFBCSMF)” or the “Taoist Tribe (TT)”. These become even more interesting if one looks at actual vertically positioned Web 2.0 platforms which either try to bring a community of like-minded people together like “Dogster” or provide a tool to define and organize a target group of any shape like Ning. Yet, both of these platforms have in common that they require someone to become a “member” by “registration” and do all these various steps actively online. In that context I do believe that there will be not in too far future a kind of “ambient computing” where the unconscious behaviour patterns will be able to bring people in a meaningful way together. Hence, aggregating this sort of behaviour and making it somehow visible is not that far away from 8W8’s concept of the “Global Space Tribe”.
One thing I had hoped throughout the whole story to occur, is a bit more of conflict, friction, sex: As Oskar and Theresa, a computer scientist, seem to come along very well, I waited for that forbidden kiss, the clandestine quickie to happen under the waterfall of perfectly pristine EA-RA. Not for the sake of sensation, but to portray people regardless of their brains and social status when they become most human: emotional to the extent of irrational. The figures appear prim and proper, and at best tease each other lightly in order to surely succumb to perfect harmony. Irrespective of that, what I liked from a storytelling point of view is the ability to portray a broad set of global citizens who find a common denominator to discuss a topic, be focussed in defining a goal, accepting each other’s variety of viewpoints, being non-judgemental and fully embark on the beneficial concept of diversity.
Altogether, I liked the book a lot as it is coherently able to explain the road ahead in globalization by the force of the internet and the road ahead of the internet by the force of globalization. What gave me food for thought via the concepts of “Global Space Tribes” was the decreasing influence of governments, because free people in a free world are able to cross-pollinate their ideas and aspirations regardless of the strangulating rigidity of what we call a country today. For someone like me who happily articulates his despise of today’s governments, the vision of 8W8 is one which deserves active pursuit.
Who is interested in buying the book, Amazon has it, either in print or for the Kindle.
Guest at SeoFM.com in Munich: SEO-Outsourcing to India
All my 10 years of being a radio-presenter till 2003 slightly re-appeared yesterday night when I was guest at the radio show at SeoFM.com, a weekly online-format of Germany's leading Search-Engine-Optimizers (SEOs) Marcus Tandler (a.k.a. Mediadonis ) and his "partner in crime" Ralf Götz (a.k.a. Fridaynite). It's a one hour talk format which is about the latest development/gossip from the SEO-scene mixed with a lot of infantile jokes - to which I contributed gladly :-) In addition, Mediadonis interviewed my on my business of offshore outsourcing to India for projects revolving around SEO, which could be either building some content-centred apps, some BPO driven tasks for e.g. ad-campains or content-production. Here is the link to the show for time-shifted listening (German language).
So one after the other:
- Sure, surprise, surprise, India is good at software engineering, yet as I have written already on this blog a few times, it's always a number game, hence: If you have 5 people for at least 3 months, it's worth considering. The more and the longer - the better.
- For BPO also big numbers pay off and it always will be much easier, maybe only feasible, if the task is not to a large degree dependant on German language.
- Content-production can work, again in English language. The challenge will be in recruiting and quality assurance, and again, will only pay off with scale.
Mediadonis charmingy titled this show "Rent a Jobkiller", no wonder as I had explained plainly : "My business model rests on two pillars: One is slashing German jobs and increasing unemployment, the other exploiting poor Indians and taking away their future". As there are really people who argue such nonsense with fully conviction, I have made it a virtue to repeat it ironically as often as possible …
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Inauguration by Kiran Shaw of “Teleradiology Solutions” (Bangalore)
Yesterday in Bangalore I felt honoured to attend a function of my friend and fellow EO -member Dr. Arjun Kalyanpur and his wife Dr. Sunita Maheshwari. Arjun is a radiologist, his wife Sunita a pediatric cardiologist. Five years ago, without having an M.B.A. or financial backing, this doctor-couple started a company out of their living room: Teleradiology Solutions. A medical service provider which delivers radiology-reports from Bangalore to the world. Or like Sunita explained: “A brown company in a white space.” Today the company boasts 160 employees and sits in the reputed technology-district of Whitefield in outer Bangalore. This is the building with the chaotic Indian reality to the left, and the highly performing Indian reality to the right. (All the pictures from the function are here in my Flickr-Set ).
Teleradiology Solutions’ value proposition is very straightforward: Enhance the capacity of radiologists to hospitals in the U.S., Singapore and India by a remote service, including a cost-advantage, where radiologists in India would receive digital scans via broadband. In their speciality “emergency cases”, these tele-doctors would submit their diagnosis back as fast as 30 minutes. The company is the only provider outside of Singapore which has been granted the necessary approval by the Singapore Health Ministry to do so and is currently making inroads to Europe as well.
The reason for yesterday’s function at 5 pm for High Tea was the next consequential step to enable the company’s further growth. Hence, a state-of-the-art training facility under the Sanskrit name of “Rad Gurunkel” has been inaugurated. The guest of honour to do so was Ms. Kiran Mazumdar Shaw, founder and Chairman of Biocon Ltd . Ms Shaw, besides being the richest woman in India, is highly respected across the entire country and often quoted as a role-model for women to reach highest achievements in a predominantly male-dominated society. Ms. Shaw is here with the candle lighting the lamp, Arjun to the right in the black suit.
The speeches of Ms. Shaw, Arjun and Sunita reflected pretty much the key-challenge for knowledge-driven companies like Biocon and Teleradiology Solutions: Scale. Getting the right people on board, bringing them to the required level of skills, and retaining them by growing these skills. Likewise, Infosys has recently invested US-$ 300 mn into an entire campus in Mysore. Being an entrepreneur myself, I felt amazed by the level of meticulous detail how Arjun’s company has artfully crafted processes which would be able to replicate quality of a radiology diagnosis 8,000 km such as if the doctor was right sitting beside his patient. There is for instance one FTE (full time employee) only taking care that the regulatory requirements from the U.S. are met and audited accordingly.
Constant training of medical, technical and administrative staff has according to Arjun in the past proved the most important factor in attaining that quality along with a very low defect-rate in this not very error-tolerant area. In order to be able to take the company to the next level, the new training facility will be able to scale and institutionalize the various training programmes. Here is Arjun on the right (still in the black suit, not in a white lab coat :-) and me to the left.
I wish Arjun and Sunita and all the fantastic people I met in their company yesterday all the best for their future aspirations which are constantly bolstered by hard work, dedication and honesty. In that respect, I felt deeply moved by a quotation which Sunita brought forward from the great Mahatma Gandhi: “Learn as if you will live forever, live as if you will die tomorrow.”
Thanks EO Mumbai for your Hospitality
Who has ever been in event management, knows how much effort it takes to get an event for 250 people rolling, especially if it takes 4 days. And besides a perfect “organization” still make it feel natural and authentic so that everybody parts his way with a noble feeling of inspiration and enrichment. And that’s exactly what EO Bombay managed to put together in the last four days from Thursday to Sunday for the “Regional Integration Event” (RIE 2008) where all the chapters of the Entrepreneurs’ Organization meet annually. The entire picture set on Flickr is here.
One of the highlights was the “Bollywood-Night”, with a fashion show of India’s premier designer JJ Valaya. Here the video of the grand finale with the master himself briefly stepping on stage.
For the motto “Dream Big”, the speakers were absolutely outstanding and in the overall very complementary in what they had to convey. Shashi Ruia from Essar, estimated at a net worth of US-$ 10 bn made a good start, a bit like a father explaining in a very seasoned way to his children what matters, what to look for and what to avoid in business and in life generally.
Zia Mody, a prominent legal consultant and lawyer described what it takes for Indian companies to acquire companies abroad. Ms. Mody is known for her hard work and dryly began her presentation with “Sleep is for Sissies” :-) A panel discussion with industry captains from private equity have a good insight on the thought process and the nuances of the players in this field.
For the most fascinating speaker, however, was the juvenile Sunjay Reddy from the infrastructure developer GVK, the company which on the bid on reforming the notorious Bombay Airport. More information on what it will be is here.
I have never seen a person in my life who has to put up which such piles of shit in his work from a hugely complex construction project in the first place to a community of slum dwellers to be relocated, to opposing populistic politicians to the Shiv Sena for displacing a sacred statue, and so on and so on. At in spite of all this, still remaining not just a good mood, but even spreading a contagious enthusiasm up to the point where he authentically and without irony speaks about “a dream I am following”. After his 90 minutes presentation we all got up and gave him what he deserved: standing ovations.
On Saturday morning after everybody had re-assembled from the previous night’s party with bollywood film producer Karan Johar, we eagerly listened to Dr R A Mashelkar’s “lecture” on “Innovation – to make the Impossible possible”. Undoubtedly a unique source of inspiration for the gentleman being India’s most recognized scientist who is also an advisor for the Prime Minister of India.
The later afternoon ended with an exciting ride on a speed boat in east in the bay of Bombay west from the Taj Mahal Hotel. And this was my favourite, our highly esteemed fellow member Takeshi Izuka fighting the wind and Mehool Bhuva coming to his help. Yep, we did not fall short of fun at all …
So thanks again to EO Bombay, spearheaded for the event by Javed Tapia and all his other fellow-members who put all their time and heart into making this generous hospitality happen.
Video-Conversation: Seesmic looks good to me
Just registered for the Web 2.0 Expo in San Francisco end of April. I was there last year and although some sessions tend to be lengthy and masturbative, overall I liked the workshop and "hands-on" approach. So I decided to go again this year. Who is there as well, please let me know to catch up.
Apart from that I just checked out a service which is not entirely new, but still in closed Alpha, Loic LeMeur's Seesmic , a crossroad of Twitter & YouTube. I guess this is the best description for it. And it's really nice and somehow with lots of unassuming Flash-elements something like "Web 3.0". A conversational platform, asynchronous where most members just sit in front of their computer and speak some statement into the webcam. I started off with something about Castro stepping back from power in Cuba.
Others can reply so that a thread would evolve. What is smart: One can once enter one's Twitter access data and distribute every new post into that channel, too. I really like the ease of the service where it becomes immediately clear what to watch, what to do and how to join the conversation. And ultimately, one can rehearse a statement as often as desired before putting it really live. The only thing I was missing so far was the possibility to distribute the video e.g. in a blog by embedding it, at the moment really everything happens (apart from the Twitter-twist) in a world within. But maybe that's why it's actually called "Closed Alpha" :-)
Inspiring DLD Conference in Munich
Even after returning from "down under" in Australia, I was a bit "down under" with my blogging. But today is a good opportunity to come back to light after an amazing 3 day DLD-Conference in Munich which ended yesterday. On the eLAB-Blog, I wrote a bit more on it, especially about 23andMe, a "Web 2.0 genetics" company which was showcased. The mix of the panels and participants was phenomenal which such high-calibres like Craig Venter, Paolo Coelho, Martha Steward or Marissa Meyer being around. Lots of extremely networking opportunity by talking to a whole lot of extremely smart, positive and energetic people. My photo-set of the event is here.
This year, I was not just a participant, but felt very honoured when Rupert Schäfer , die producer of the DLD; asked me if I wanted to moderate the India-Panel on Monday morning. I guess it was a real sucess with my two guests Farokh Balsara, partner at Ernst & Young India, and Vishal Gondal , founder & CEO of Indiagames and a friend whom I've known for 2 years by now. Here a picture of us two after the panel.
We had a good conversation about the major differences in India compared to "the west" in terms of demographics, media consumption, pick-up of mobile usage and on the other hand some insights how to enter the Indian market in the role of an entrepreneur or a manager in charge. Both guests had lots to say especiall as they were coming from quite a complementary background. Here is also a brief video with the first 2 minutes about this India panel.
From the feedback I got the audience really liked it and I feel India should be way more promoted in Europe. Thus, I also talked to Loic LeMeur and we found it a good idea to work on an India panel at his conference LeWeb in December. Let's keep the fingers crossed that it works out, would be really cool.
Back from the Outback
Australia is a place to be and I can understand all the "mates" I talked to that although that had travelled a lot around the world, they wouldn't like to live at any other place. It's a great country, in any sense of the word. I had to get used to driving a whole day in the car that I had just made 1 cm on the map of only New South Wales which again is just a smaller part of this huge continent.
And within that spacious nature there are just 20 mn of people who understand how to strike a healthy life-work balance. Things function very well in Australia, the the people have maintained a remarkable friendly and relaxed attitude. "No worries" is a common term for a mix of "you're welcome" and "no problem" and that reflects pretty much how Australians make it through their walk of life.
Hope to write a bit more of my experience in the next days and post some pics when I have sorted out a pile of work which has amassed. But anyway, I would like to thank the "mates down under" who have made it a unique real-life experience, especially Ben, James, Ari, Maria and Scott.
As a little welcome-surprise arriving in Munich, I got to know that I will moderate the "India Panel" on the Digital Lifestyle Day (DLD) on Monday morning. Really looking forward to that. Because I have received already a couple of requests to help for a ticket from a few friends, I am afraid that I am of little use. I spoke to the event-producer Rupert Schäfer today and he said that no more invitations would be sent out on a short notice. Sorry …
Shady Sales Practise from Netchina
Sorry, for being so lazy with blogging lately. The bad news of it is that I had a couple of infrastructural problems which were unrelated, but in sum made work for a few days hell of slow. That situation improved so far. The good news is that the work as such is very exciting, with existing and new projects/ventures coming up. In addition, I am currently preparing for an extended weekend in Bangalore for the stagnight of Christian, a good friend of mine. If we don't get arrested and land in jail for what we plan to do, I will be happy to share that experience.
What I found quite "interesting" these days was a new shape of "human spam". Similar to the Nigeria connection with the stone-old fraudulent request to wire some money as a preliminary funding for a multimillion transfer that is imminent. *Yawn* "Human spam" infers that the cost of labour and hence it's opportunity cost is close to zero so that these types of real human interactions pay off in spite of a very low conversion rate. On a similar line I got a personalized e-mail from Netchina, a domain registrar from China pertaining to my company domain level360.com
A person named "Mars Zhou" (mars.zhou@netchina.org.cn) adressed me in a very sly manner with
++++++++++++
level360.com.cn
level360.com.hk
level360.com.tw
level360.hk
level360.net.cn
level360.org.cn
level360.tw
level360.mobi
++++++++++++++++++
I am willing to help you during the whole process. We will put every step of registration on file. Contacting you for a time, I have noticed that you are a responsible person. We are glad to assist you. As a domain registrar, I don't like to see the badman getting huge profits though domain squatting.
++++++++++++++++++
*Puke* In the first place, I did not react, just deleted the e-mail. However, remember "low cost of labour and opportunity cost close to zero", Mars Zhou doesn't give up that fast. Today I got another mail saying
+++++++++++
Dear Mr.
I am mars zhou,we always talk about the case of your company domain name recently,as aforesaid I told that the domain name registration is open to the world,we have no rights to interfere with other people to register .The auditing time is coming soon,have you decided?We need to arrange the records during the process of dealing with domain name registration ,all the files need to deliver to domain name disputed arbitration committee,we really want to help you ,but we haven't got any news from yu so far,it is hard for us to start our work, if you need to use your registration priority ,we will send you the application form to help you finish the registration,I know your time is precious,and so do ours,we hope thatyou can take out some time,let us together to deal with the case ,please give me your exact replyat the first time whenyou see the mail.
Best Regards,
Mars zhou
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Never mind the typos which I copied as they came. I felt the best response to this practise is to blog it. Will gladly submit the URL of this post to Mars Zhou who, together with his entire company, should indeed be shot to, well nomen est omen, Mars :-)
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