The Great Indian Ecosystem

Some gems I heard over the last two days (All paraphrased. Non italicized bits are mine):

• Indians don't take risks. Yeah, right.
• Indians are immature. We should read more books. Whoa, there!
• Indians don't know how to sell :)

So, more or less, "Me = All Indian" seems to be a strong foundation of the ecosystem. Add to that the repetition of the sentiment. And again. And expertise is thus born!

So the hordes selling Tally, and of course making it, and the numerous loads who set up Potels, and the Tata Nano and the risk associated with buying a JLR or a Corus, the buying and selling of Glaceau - I guess no Indians in any of those pictures, eh ?

Ok, sorry about the sarcasm etc. I will confess it did get my goat and this was not a mature reaction. Should probably go read a book to figure that one out :D

Seriously. Guys, please. There are numerous other Indians who take risks, sell awesomely, and while they might not read books, their business maturity will be the content of many. Hordes of them. We're the nation who's everywhere - amongst the largest trading, immigrating, innovating populations. (Its not, repeat not, repeat not about patents and lab research alone. Please get over that inferiority complex of yours. Please.) Yes, I personally suck at a lot of these attributes, and would love to learn how to deal with this gap. So do a lot many from the technology space, and this is surely a gap we need to bridge (probably through partnering).

So lets please find those Indians, learn from them. The sweeping generalizations will not help. A pets.com, amongst a gazillion similar examples, sucked as much, so the nationality tag doesn't help at all!

If we all become a little more straightforward, show a little more honesty and humility, and focus on the solutions, we might yet create an ecosystem. Judgmental generalizations, though, will probably not be part of that...

Enterpreneurial Enterprises ?

"What can we do to make our employees more entrepreneurial?"

Thats been asked often enough - a couple of times even to me personally - inside larger, less nimble organizations. Over the last couple of weeks, I've had a few discussions in various contexts that have highlighted this need.

Fact:

Large organizations need processes and systems that can be followed to replicate, predictably, certain outcomes. These need discipline, conformity and some sort of a hierarchy to get executed smoothly. This is true across functions of the organization - production, sales, HR, procurement, you-name-it. Product innovation and R&D is about the only one which has some leeway on this, but there's a tonne of effort to put measurability and processes around that, as well.

Fact:

Businesses and their needs are dynamic! You get into new products, manage new regulations, expand into new geographies. Old models do not always work in these situations. You might need to package differently, market differently, or price differently. You may not get the product, or positioning right at the first go. You want to be agile, nimble and ready to experiment with more than one approach around the core idea, while measuring constantly to figure out what works and what does not. And you want to keep your costs down, while you figure things out. Be frugal.

Who's good at these fuzzy situations ? Entrepreneurs!

So obviously, there needs to be an element within large enterprises which is entrepreneurial in nature, from a risk taking and nimbless viewpoint, not bogged down by heavy processes and relatively comfortable with lack of resources and clarity. And within this space, folks need a free hand.

Once the core problem is solved, the corporate machinery can - nay - should - move in. Beyond the establishing of the models, processes are needed to ensure scale, consistency, reliability, profitability over a sustained period of time.

But when you gotta go-in-there-and-get-things-done, having a few "mavericks" (from the pov of established orgs) is a huge help.

And the other side

Entrepreneurs often know certain aspects of the business well. Many are engineers who know the product real well, and haven't a clue about other areas. There's often a disconnect from the real user out there, or about pricing models, or undertaking market research and the like.

This is where a stint within a large consumer facing organization will help! The ITCs, HLLs and Tatas of the world have sales folks who've been amongst users across the country, and have insights like nobody's got them. A successful marketing head who's sold gensets in a particular territory will provide important clues about consumer behaviour that will be pretty much impossible to find for a small startup. The pricing and distribution models for entry level mobile phones have a lot to teach entrepreneurs about aspirations, and managing them. And there's no better teacher than been-there, done-that.

Is there a symbiotic relationship here ? At least a limited, short term one ? Perhaps an "internship" or "guest worker" like program, where both benefit from each other and work towards cross pollination of specific skills and attitudes. Who could take the lead on this and do the connects, walk the program through its paces ? Thoughts, ideas welcome in comments.

The stories That Aren't [Told]

Everyone's heard of the huge IT Services in India. A lot many are giving products a shot. Some are exploring SaaS and a few are even swimming in the shark infested waters of the web-products-for-the-arrived world!

But there's some mundane stuff thats unknown, for the most part:

How big is the assembled server market in Bangalore ? Its AMCing ?
What margins do data recovery businesses have ? What are the volumes ?
What is the "chip-level-repair" industry ? Is it attractive ?

Is any of the above a scalable business ? Is there a Dell-on-some-scale waiting in the wings ? How much is the organized, and how much the unorganized market ? These guys obviously have a deep sales reach - what can that be used for ?

The current focus of the Ecosystem - especially the technology related parts of it - is limited to a narrow band of technology activity. This is probably driven by the dollar or potential-stardom value of the technology. Its a similar story for investors - both angels as well as VCs. The lack of exits in the current market has probably got to do at least partially with the huge valuations at which those wil make sense given current investment sizes.

Are there smaller stories in there ? Take Bangalore's best data recovery guys nationwide ? Or help an efficiently run AMC business scale, reach out to the government and big business and grow ? Or explore if there's an aggregation story in there somewhere ? Or data collection and market research ?

I was speaking to my cousin the other day about some ideas. He's been in the hardware space for a while (hence the bias of the examples above towards that industry). He's moved from a large org where him and his partners sold a lot of hardware at low margins, and some services of various sorts at better margins, to his own outfit where he's focusing on the margins and has cut out the pain of sales completely! He also knows his customers really well ("not servicing the software industry right now at all!"), and can hit them for upselling related stuff!

There's many such entrepreneurs, and many such stories. We can glean a lot of wisdom from these, and possibly spot opportunities for co-operation, investments on a different scale/model, lowering our costs, getting a foot in the door with customers, etc.

I daresay my cousin's lessons in entrepreneurship have been a lot more valuable, richer than mine. I also think engaging with other, real-life industry around us will help us think of our work with more ground truths and reality included in our plans, pricing and projections. It will help us realize and respect true customer needs and sentiment, and step out of the echo-chamber for a while.

The breath of fresh-air-nee-reality will do us all a lot of good :)

The Ecosystem is Broke(n)

During the course of a conversation-over-chai after a meeting with fellow entrepreneurs, we eventually got to the usual analysis of whats happening in the startup and entrepreneurial space around here.

Surely enough, the echo-chamber that resonates its own thoughts, and has little connection with those outside, soon came up.

So what's paining/failing early startups/small companies/first time entrepreneurs ? What does a business need to make it ? You've got the idea, you might get to the product, or some version of it, but then you sometimes kinda get stuck. For lack of decent, honest, precise advice, information, knowhow, or even plain awareness.

Distribution, the right pricing, what should your outbound communication be ? Are the buyers interested ? Why not ? Is it technology, or support, or something else ? Do we even know what's really happening in the spaces we're trying to connect to ? Is there any form of market intelligence at all ? (I do not include a critical analysis of launches, PR statements and quarterly results in this - that often does not help a startup too much). What's the government's take on issues ? What are the infrastructural changes in the offing and their likely impact ? How do you engage in a dialogue with these (you're already drowning in work) ?

An early entrepreneur would surely love an ecosystem into which inputs that cover the above aspects are drawn in. An ecosystem, again, is not the creation or sole preserve of this forum or that, or some or the other online publication. Its the coming together of all of these, with dialogue flowing between the various stakeholders.

That ecosystem is quite inadequate in India, as of now.

As I see it now - be it major startup events (both structured and otherwise), or online coverage of entrepreneurial activity - there are two major problems:

There's no EcoSystem (but only a part of it)

Sure there's a bunch of enthusiastic VCs who participate. There's a few industry people who even mentor folks. There's a lot of aspirants who want to get going, and then there's a bunch of people who've seen and done a little, and pass off a lot as knowledge.

There's a lot of hype, jargon and very little honest learn-as-we-participate happening inside this echo-chmaber.

More importantly, where are the people who're connected to the real world ?

Are there any top sales folks from FMCGs, Financial Services, Retail, etc, who're telling it how it is ? Do we get real info on what directions business development is taking in healthcare, telecom, energy, real estate, etc ? Yes, you sure pick up bits and pieces of info as you run into these industries, but you're on your own, and its a very incomplete ecosystem without these inputs.

Things are being built, reviewed, validated in isolation from these realities, and only a rude jolt much much later in the process forces a rethink. By such time, some have lost too much money, or people, or enthu, or time. People seem to go through entire entrepreneurship lifecycles with little connection to their real markets - and with a very fuzzy understanding of its behavioural traits. User personas are tough, but even worse, they're probably non-existent in our startups!

A few honest tips from people who've sold stuff "out there", figured out causes and relationships on the ground, would go a long way. Having access to thoughts from a senior bureaucrat who might be able to analyze government policy and directions better than techie-turned-analyst/VC/blogger would give the ecosystem a serious leg up. And so on - for media and communication, for figuring out pricing, and a whole lot more.

We need "more-360". Its a very very small world right now with few connects into reality. Gotta change.

There's no co-operation

This is true for both the players that help create the current ecosystem, as well as for co-operation amongst startups. Everyone is trying to do everything, be everyone, and seems a little fearful of opening up to inviting folks with other competencies. The expansion of the ecosystem needs an honest appraisal of whats available today, and whats missing. There needs to be a concerted effort to expand it, collectively. Each resource, each forum is so small and ineffective at this point that talking about competition is plain short-sighted.

Some gaps that I think exist:

• Experts for many aspects of entrepreneurship are missing from the discussions/fora.
• The entire focus is on "how to start" and "how to get funded". Even the words mention otherwise, the actions focus on these two. What about the startup which has been around for a while ? What about those who need a redo, or are about to pack up ?
  
• Exploration of new models. Right now - pretty much everything is a lift-and-fit from the Valley, and there's a tonne of traditional business knowhow thats ignored. The Nano was not created by adopting and stripping down an existing design. Need models for small ticket M&As, newer funding models that may not work like the current fund-of-risks model we see today (and that may have different investors from the essentially financial players one sees now), newer kinds of VCs, different models for hiring/organizational structure.
  
• Way more co-operation between startups. Trying to focus on what one does best, and keeping burn rates ridiculously low, will help get better success. There's often failure induced by a lack of understanding of competencies that could easily be co-operated on, but that essentially smart folks fail at trying to understand and learn quickly enough. If you can get products out fast, marry someone who buys in and sells well. If you can network, help create and manage partnerships for others. More distributed ownership, higher stakes and commitment, lower "salary" costs.

Someone's gotta to take the lead on some of this. A few success stories (to whatever extent - its not just $100 million exist that count) and we'll see more entrepreneurial activity that's built on newer models, for our own markets, at our price points, and stuff that sustains.