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2016

Dheeraj Pandey, Chairman & CEO Nutanix, in conversation with Bejul Somaia, Managing Director, Lightspeed Venture.

 

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To executives who are currently employed in companies – it’s an inner calling, a certain gut feel and you know that it’s time to startup. And only the individual would know when the time is right. It is important to realise that when one quits a job to do something large, it is essentially asking all the family members to sign up, and the opportunity cost is often huge. A professional colleague had once remarked to Dheeraj that fatherhood prepares an individual to cope better with the highs and lows of entrepreneurship. It’s always about seeking that “average line.”

 

Increasingly, everything is becoming software and there’s a distinct need to bring this convergence to the masses and build everyday applications accordingly. That’s why the design element is so important. What would the application do? The developer should be able to see it from the user’s point of view. It’s the hardware which is getting disrupted and not the OS. The applications sit atop the OS.

 

He had an interesting point to make about culture. “No one and repeat, absolutely no one is above the law” and building the right corporate culture is about doing the right things to empower people at the grass-roots. Especially the attitude towards salespeople. At the end of the day they are human beings too. They have feelings, insecurities like everyone else. Also, one needs to constantly benchmark against the very best in the industry. It is most important NOT to take shortcuts while hiring people. At the same time, it is important to realise that better people may come with a lot of attitudinal problems which ultimately leads to a lot of negativity. The “I, me, myself” syndrome is often a red flag at the time of interviews. There will be tough moments when one has to let go of individuals and such discussions are never easy.

 

He mentioned about “not getting too deep in the froth of unicorns.” This applies to choosing who your colleagues will be, and includes investors as well. It is essential to choose investors keeping an eye for the long-term. “Authenticity” is his favourite word. It cuts across the value chain. So what exactly is authenticity? It’s about taking self-righteousness out of honesty, and adding vulnerability to the equation. Authenticity = Honesty – self-righteousness + Vulnerability. 

 

Want more blogs, session updates, videos and discussions from NASSCOM Product Conclave, 2016, Bangalore? Use the hashtag npc2016  and find them all.

Naveen Tewari, Founder & CEO, InMobi in conversation with Govind Ethiraj

 

CvsFKKZUAAAjmOz.jpg                                       Photo credit: Kiran Kashikar

 

We keep hearing this phrase “the journey of a startup.” Naveen had an interesting take for a Cricket crazy nation. At NPC 2016, he said, it’s like graduating from T20 to one-day and finally the big stage of test match, a similar experience and exposure which a cricketer finds in process. However, there’s a vital difference. In startups, unlike cricket, the progression is seldom linear, the format unannounced, and one is thrust into the middle without quite knowing which way things will go.

 

The margins in his business are handsome and yet it took several years before he started making money. Being a tech-driven platform, the investments in the earlier years were heavy and one of the major reasons why profitability kicked-in late. Naveen estimates that the Mobile Ad Tech has the potential to be a 250 billion USD industry in the next few years. InMobi is of course among the frontrunners in this space. The Ad Tech business is driven by emotions, and a very US-centric view of the world that global players are experimenting with at present.  

 

He shared an interesting thought on VC funding. He said, it can often spoil startup founders and lead to wasteful spending such as undertaking massive unwarranted changes in org structures, unless one is mindful of it at all times. The aim should be to invest in new ideas, a philosophy which he has been successfully following at InMobi.

 

The media likes stories which are laced with extremities – both of success and failure. They will never write about everyday operations which is most boring for readers. Hence, there is always a tendency to exaggerate conditions to draw eyeballs, especially when it involves exits of high profile execs from some of the fastest growing companies. In India, it is a common enough practise to hire from traditional companies, but many a times, the cultural shift becomes a challenge and can land the startup in a quagmire. It is wise to part ways under such conditions, and is healthy for both parties concerned. The ability to transition to a wholly different culture or the lack of it, is the real reason why people leave. Here, Naveen did some straight talking and his candidness was rather impressive. He has a mnemonic for people who stay and that includes him as well. ASS. A for attitude, S for smart and the second S stands for skill. It is absolutely essential for people who stay, to believe in the company’s vision. Just as people need to be appreciated for what they do, at times, hard calls need to be taken and there’s blood on the table. It’s unavoidable if one is running a successful venture.

 

On being queried, why it is that few “people” really understand his revenue model, he shrugged off with customary candour – well, it’s a B2B model so he is really focussed on making enterprises understand what InMobi does!

 

Ladies and gentlemen, that’s Naveen Tewari for you – the face of a new ambitious India which knows what it wants and is constantly working towards it.

 

Want more blogs, session updates, videos and discussions from NASSCOM Product Conclave, 2016, Bangalore? Use the hashtag npc2016  and find them all.

The new report on startups by NASSCOM was unveiled at the NASSCOM Product Conclave, 2016, in Bangalore recently. The report as expected has been one of the most anticipated ones of the year and has been quoted by media extensively. Here is a brief of the coverage. If you are interested in state of the startup ecosystem, this should interest you.

 

The Economic Times

 

Online: http://tech.economictimes.indiatimes.com/news/startups/with-4750-startups-india-retains-its-position-as-3rd-largest-startup-base-nasscom/55083919

 

Read here:

 

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The Hindu

Online: http://www.thehindu.com/todays-paper/tp-in-school/10500-startups-by-2020-in-india/article9272456.ece

 

Silicon India

Online: http://www.siliconindia.com/news/startups/India-Will-Be-Home-To-10500-Startups-By-2020-Nasscom-nid-199314-cid-100.html

 

CIOL

Online: http://www.ciol.com/india-will-be-home-to-4750-tech-startups-in-2016/

 

Communications Today

Online:http://www.communicationstoday.co.in/index.php/5550-india-will-be-home-to-10-500-start-ups-by-2020-nasscom

 

Daily Thanthi

 

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Navbharat Times

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Dainik Bhaskar

 

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With L4k New Cos, India Retains Startup-hub Tag

Chamath Palihapitiya, Founder & CEO, Social Capital in conversation with Shripati Acharya, Managing Partner PRIME Venture Partners

 

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       photo credit: prime venture partners

 

Disruption is often associated with startups, finds resonance in new funding theories as well. A session title, well earned. Arguably, the volume of money doing rounds earlier had caused inflationary conditions to prevail. It is also interesting to note how capital is now being allocated. Some of the mandatory norms which got people funding ten years back, has clearly become antiquated. One can get funded even over Linkedin, if the messaging is compelling enough and packaged well. Today, one does not even need a high school education to get funded.

 

The rise of everything-as-a-service essentially means it’s like a tap. You turn it on when you need it. Why can’t funding be the same way? Why can’t people have access to funds just as easily as they do for software?

 

Social Capital has invested around 1 billion USD in a whole lot of ventures including Healthcare, Fintech and Enterprise SaaS. Chamath believes that it is imperative to understand the business before investing. Mathematical models can be derived successfully once a deeper understanding is gained, which can also be used for other investment decisions. The insights drawn from Capitalism can be automated to provide systematised learning. There has to be new ways of getting funded without having to give up a substantial stake in business.

 

Right now the funding ecosystem is buffeted. So far, young entrepreneurs were riding the high GDP growth and not expending enough efforts on building fundamentally strong businesses. Unit economics was yet to kick in for many. Once there is a structurally broken business, it’s almost impossible to claw back. One should strive to create value to derive more “pricing power” and be able to shift the benefits back to customers. The Pricing Sensitivity Model of Social Capital for instance, is also made available to people who don’t get funded.

 

As an investor, some bets obviously don’t work but one has to be prepared to be flexible. It is most essential to be in a constant state of preparedness where you know you are capable of beating the best. Ego and bias gets in the way when one bets incorrectly or misses an opportunity completely. The real learning should be about divorcing oneself from these negative traits, and not really linger on what has happened. The parameters of deciding whether funding can be made would depend on the business model - whether it is B2B model or a consumer business.

 

Often there’s a dilemma whether to go with hedge funds or capital markets. Essentially these are different stages in the lifecycle and one has to be prepared that once they go public, VCs are likely to abandon them overnight. Well so be it.     

A CEO is an investor. He invests on human capital, finance to create value and ultimately he is in the business of generating returns. The aim should always be to drive down the cost of capital over time. For the investor it is most important to get out of the way and let the CEO run the show.

Building a customer-centric organisation: The hike in the Unicorn world

Kavin Bharati Mittal, Founder & CEO, Hike Messenger in conversation with Syna Dehnugara, Features Editor, CNBC TV 18

 

The latest entrant in the coveted club of Unicorns, Hike was founded in 2012. Most interestingly, the first set of customers were from Germany and Middle-East. Kavin explained to us, at that time Hike had a 128-bit encryption, a not-so-common feature those days, and Germans being a stickler for security absolutely lapped up the idea. It became consumer-centric in a completely different part of the world.

 

To be able to build a sound product for India, one has to gather a deep understanding of consumer behaviour. As Kavin says, that is exactly where Hike scores very high and is able to hold its own even globally. The Indian consumers’ needs are very specific and has to be catered to in accordance. He gave an example. Smartphones in India are a shared device and even children have access to elders’ phones. Hike understands this peculiar trait, and has built chat features which can keep conversations hidden.  

 

Despite all the media coverage coupled with very high expectations, Kavin is never under stress. He is most excited about how the business can accelerate and double or even treble the number of active users. The Unicorn continues to raise the bar and create differentiation in messaging. There’s much talk about AI and Machine Learning, and Hike is not to be left behind. It has a repository of 10 k stickers and prompts the user based on past usage and various other parameters, made possible through AI and Machine Learning technologies.

 

Kavin says, very soon apps will become like any another phonebook contact and unless there is clear distinction, dormancy will set in. The avowed growth in number of users would also depend how fast the market expands in the next few years. Typically the target audience is within the age group of 15 – 24. The next 2 – 3 years will be spent in building a phenomenal product. The value chain components are: Suppliers, distributors and consumers. The path to monetization could entail the time-tested model of vertical integration, where Hike controls both the supplier and distribution network to optimise on scale, but right now the focus is on the consumer and build an incredible product. 

The Indian Startup eco-system is certainly maturing! Who can deny that? Total Tech startups in India by the end of 2016 should be more than 4700, a number which has veritably pitchforked the nation to third position after US and UK. Israel though remains a close contender. The growth in numbers, a recent NASSCOM – Zinnov study reveals, has been in the range of 10-12 percent which one would expect to be pretty good, given the hoopla doing rounds about funds drying up, and naysayers having a field day (weeks / months?) with wild speculations. But more of that later.

 

Fascination with the consumer business continues, notably reflected in 60 – 64 per cent market share, but most encouragingly, the B2B segment is seen to be making rapid strides to claim its own. This is healthy.  A trend which is apparent in the NASSCOM Emerge 50 Awards as well.

 

Much as we hate to admit it but the overall funding has taken a dip (4.9 billion USD in ’15 to 4 billion USD in ’16E), but the silver lining is that the number of deals has gone up from 600 to 650 this year, signalling smaller ticket sizes and a wider spread. We want to look at it as a market rationalisation exercise after some of the unrealistic valuations seen in the past. In some ways this course correction was necessary to weed out the non-serious players, as strong fundamentals trumped over hype. It was also discernible that bootstrapping and crowdfunding were seen as viable alternatives – a fitting reply to muted sentiments. The eco-system has come to be synonymous with innovation so it is only natural that players will seek out new avenues to beat the market blues.

 

Cluster formation seems to be working well. Clearly the leaders are - Bengaluru, Delhi-NCR and Mumbai, followed by the “Emergents” – Hyderabad, Pune and Chennai and finally the Aspirants – upcoming cities such as Kochi, Kolkata and Jaipur. If you see overall, the spread has been pan India, a most encouraging sign.   

 

At NPC in Bangalore, the Startup Report is going to be released. Might I add, the level of detailing done to dissect the trends has been quite remarkable. A comprehensive Ready Reference of sorts that renders great insights about the ecosystem and its players including the government, academia and incubators. At the end, there’s a particular slide called “Quick Facts” which I really liked. It collates several parameters like Global Innovation Index, time taken to startup, corporate tax rate, number of investors (VC and Angels), Unicorns and the number of Incubators, to give an overall perspective as how India matches up to the RoW - US, UK, Israel and China.

 

Without getting into granular aspects right now, let me urge you to get hold of this report, and decipher for yourself in which direction is the sector heading.   

 

We have lead researcher of the report Manishree Bhattacharya  with us to answer any questions. Use the tag startupreport2016 to find related content and npc2016 to find content about the NASSCOM Product Conclave.

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