Sushrut Bidwai

Been long long time since updated my blog. But as you know, I write only about things which really moves me to write and unfortunately I havent come across any thing in last few months that did the same. As an update - things are progressing well on my side and all is well. Very excited about the next weekends first company outing, hope to understand my team better in the process. Anyways, here are something I want to share my views on.

1. Often I come across various views on Indian startups and lot of BS about it. One thing in particular - Why cant Indian startups build global product companies? This one question is posted by many writers, advisors, mentors and VCs. What I ask is - why should we focus on building global products? Whats wrong in working on local products. Off course if we see an opportunity for global product like dimdim, slideshare, zoho we will work on that. But that does not mean if I am building product from local Indian enterprises or consumers then I am not competent. I just dont have opportunity in sight and hence focusing on something which is in sight irrespective of target market. So if you are a wanna-be-entrepreneur and some one says to you, why you are focused on India market - just ignore them. Its their job to sell you global dreams. They have vested interest for you to dream global.

2. Dream a billion dollar market - well thats good to have. But should I just let go of opportunities which are lets say 10-15 million dollar market? NO. HELL NO. If I can sustain a business with big enough profit margin then isnt that good enough. I think so. Most of the VCs and advisors will tell you otherwise. VCs because they dont need to invest in such business. Advisors typically will also think similar to what VCs think.

Only thing matters while taking decision to pursue an opportunity - do you feel passionate about solving the problem? And if successful can you do that most of your adult life? If yes, go ahead and just ignore this big, global, kick-ass etc BC.

Startup, philosophy entrepreneurship, Startup

Many times techno-preneurs, specially those who are not looking to raise money do not write a good business plan. With good I don’t mean a jargon friendly, marketing pitch business plan. But rather a business plan which can actually help you in execution. Various arguments presented are “Business plans will change”, “It takes me 3 months to build the product and take it to market, lets just do that first”, “Its boring”. Thing is business plan is probably the most important tool you can have at your disposal. Unfortunately like most of the things I know now are through my own mistakes and realization about importance of business plan is one of those.

Important parts of business plan:

Note that I am not talking about how to write business plan to attract investors, but how to write a business plan to help you put together your thoughts and research.

1. Vision:

  Vision has to be presentable in one or maximum two lines. If it takes more than that to tell your vision, you are not very clear about it. Do your homework find out what is the most important thing you want to convey and generally that is your vision. Now once you have that one line, print it out on a paper and stick on top of your monitor. If after reading for a week continuously you feel its still worth a goal to take all the required risk, then you are on right track. If at end of one week you feel the one sentence does not motivate you any more, time to check things. (Making tons of money is generally assumed so try put in something other than that. Kidding.)

2. Executive Summary:

  One pager giving away information which gets readers like partner, customer, new hire, investor (in order of importance again!) interested in reading further. This one page document essentially, when you read it after a gap of several weeks, will give you everything you wanted to know about your own venture. Problem you are solving, solution overview, competition, market and structure of your team.

3. Team:

   This is the most important part. And the part where most of the entrepreneurs make mistake. All focus on plus point, which is good to sell the team to VCs. But to really understand yourself put down all plus and minus points about every one involved. Right from socially awkward to technology genius are all important attributes. What you need to find out is who is best in doing what. There are several responsibilities a team has to take care of in a venture. All things are not as big as designing state of the art banking system or pitching to Fortune 500 client. There are lot of small things like who is better person to talk to a local electricity related person in case of any problem, who can handle low level operational things like writing invoices and cash-memos. Found out these thing about your team and put them together. Sure, while presenting this to VCs you may want to remove some things from the list, but internally maintain entire list. And make sure everyone involved is working on improving on some basic set of skills, if they are lacking in any.

   Also note down skills missing from the group and how you are going to acquire them. If you are going to recruit a marketing head, what you have so that best marketing person available will be ready to work with you? How are you going to find these missing people. Your team structure and roles various people involved are going to play.

4. Competition Analysis:

  This again is really important piece of information for any stake holder. Keep this part updated regularly. You have to know your competition. Right from how much money they have raised, from whom, for how much valuation to who are the core non-founding team members. You have to know everything about your competition. Their marketing strategies, strategic partnerships, investors, customers, outsourcing partners and every other person who has a tangent with them. Find out about what your competition is strong in and what are its weak points. What differentiation your are offering. Overlap of features. Your unique selling point/s. All this is very important when you start marketing your product/service. Never look at competition negatively. Competition always helps you, at least most of the times. Frankly if you could not find single competitor to your offering, I think you are understanding the term competition in itself.  Also one quote I always remember is “There is always enough room at the top”.

5. Market opportunity:

   Never lie about market opportunity. At least not to yourself. Yes, VCs will look for billion or at least few hundred million dollar market size. But if you do not have that kind of market, does not mean you can put up your fantasies here. Specially for dot com startups I have found people really struggling with how to evaluate market opportunity. If you have done competition analysis thoroughly then that will help to some extent. Important thing is how much money your customer is going to make or save using your product. Typically some ratio (1/10th I think) is the price customer willing to pay for your product. This can be a good way of finding true valuation. Though I am not very good at this myself .

Exit options:

   There are good times exit options and bad times too. Good time options include merger and acquisitions, going public. who will be your potential buyers. Which companies will be looking to merge with you to gain strategic advantage. Is your market size big enough for you to go public at some point? Can you keep running the company with good return on investment for lifetime with out reaching any of the exit milestones. 

   Bad time options include selling off your technology, user base, marketing channels. Are you creating any patents or technology that you can sell off? If yes then to which companies? Why would they buy? Are your creating marketing channels which a particular company will be interesting in acquiring? If you are a dot com startup, then what user base you minimum need to reach to at least cash-in some part of investment if things dont work out? Have you acquired a domain name which might be very lucrative for your competitor?

There is more to business plans and will be in second part of this post.

Startup business plan, entrepreneurship, startup advice, startups

As year the draws to an end, I stop and think what is going to be the most important thing for me as an Indian techno-preneur in 2009? Is it going to be the 3G communication, Rise of WiMax, Social media, Clouds or something else. But answer is as an Indian techno-preneur I will be watching very closely how the project by Government of India in which they will be deploying 200,000 technology kiosks in Indian villages and tribal sector.

Why is this project so important to me? Because this project can really accelerate growth of literacy and Internet literacy in India. Most of the Indian entrepreneurs so far have focused on applications and products which are targeted at metro India. These applications have not reached even semi-urban areas until very recently. Now with these kiosks, GoI is opening up wide range of possibilities for technology sector. 55% population is still in villages and around 80%+ population is semi-urban + villages based. Now reaching this population and users will be a far more easier through these Kiosks.

Let’s hope this project will progress as per deadlines and will be a smashing hit!

Happy new year to everyone. Let us hope that 2009 will be safe, healthy and prosperous for everyone.

Please do not drink and drive.

Misc 2009, capitalism, entrepreneurship

Many times in entrepreneurship you have to say no to certain things. Be it in hiring process, in some project negotiation or while selecting a particular vendor. Also many times you are also someone who is being analyzed and rejected with out even a formal no.

Question is if you are an entrepreneur, would you like to read an email saying “Thanks for your interest, but we have decided to go with other provider” or would you prefer hitting reload on your Thunderbird and awaiting response from the client?

I would prefer having to read a rejection letter. Also not only that, but I would love to work with a client who knows how to say no. For example we fail to get a contract which we worked really hard to get. The client not only wrote a good email saying - “You are equally competent and in case things don’t work out with provider I have selected, you are definitely next in line. I am making this decision not on what you presented but more on my instinct as both of you look equally capable of providing said services.” Later on when the client was looking for partner for another project he wrote me and email and we did work for some time together on it with much more respect we had for each other than before.

If the client has remained quiet and has not conveyed selection of other provider, it would have made it difficult for me to work with with him in future. Yes, ego is there but more than ego pressure is the problem. Because of the splendid letter he had written previously, I was under no pressure while negotiating for next project and working on the project. It lead to a very good understanding in working relationship which is giving both us excellent benefits.

So what do you think should someone say no formally or just keep quiet?

Startup, philosophy entrepreneurship, philosophy, startup advice

Every where I have gone, be it barcamps, be it startup events, one question asked by lot of budding entrepreneurs is “What if BIG companies decide to enter my market and compete with me?”. What I generally feel is small companies, startups should not be afraid of competing with big companies. Instead big companies are always afraid that some entrepreneur is going come up with bright idea and take up market pie.

Reasons why you should not fear big companies -

1. Google factor - Google is not the only company around. Yes, it is one of the most respected, highly competitive company with great products, has tremendous market reach. But still it is not the only company. There are many big companies Yahoo, Microsoft, AOL, Time Warner, Facebook and others.
2. Big companies ain’t that big - So Google is around 100Bn, Microsoft is around 300Bn in market capitalization. These companies bring in few billion dollars in profit. True. That does not mean they can invest all this profit in new product. Nope. They have to pay dividends, provide market guidance, provide information about capital expenditure. If a startup is well funded i.e. backed by VC, it typically has amount of cash necessary to compete with biggies. Series A + B funding is typically the amount biggies will also invest in some new product, at least to start off with. So on cash wise you are almost as big as them.
3. Market mobilization - Once a big company enters a market, it enters huge. It mobilizes millions of users/customers. If you are smart and can position yourself well, you can take advantage of such market conditions which are in fact very conducive for your product offerings.
4. Smoother and better exit options - Say you built a new kick-ass web application. And Google decides to copy your idea and build a me-too product. Good, in fact great for you. Now every big company which is looking to compete with Google will be interested in the market and essentially looking to acquire you. These companies will be giving you much better valuations, better terms and conditions and more respect!
5. VC interest - Its very very difficult to convince VCs about competition and about market size. Once a big company enters your market, you have a case study which you can sell to VCs a little more easily than otherwise you would have.
6. Agility of management - Google CEO and co-founders might be the best in the world. I think they are. But can they be as Agile as you? How much do they have to lose if they make mistake? Billions of dollars. How much you have to lose? Probably nothing. You have only one thing to focus on. They have 100s or 1000s of things asking for attention. You are competing with, say, only them. They are competing with lot of such entrepreneurs in varied markets. So you can move much faster. Adapt to market requirements quickly. Your spiral of innovation is much more faster than theirs.  One example - It took months for Google to actually integrate Orkut and Blogger or Orkut and Picasa. Still integration is not perfect, you cant view comments on blog in Orkut. Hence, its not so easy for companies like Google to catch up with market. That’s why they acquire in the first place instead of building.

Bottom-line is don’t worry about big companies. Millions of dollars have been invested in search based startups, after the Google went public. Why? Because VCs know market is huge and they know that even Google can be defeated! Go for it.

PS: Thanks for your feedback on theme. I guess I will continue with this one for next couple of months and will review again.

Startup entrepreneurship, google, startup advice, startups

Web 2.0 is no more a new concept. Web 2.0 is here from last few years now, all users understand it. Web 2.0 technologies are mature, stable. There few more Web 2.0 technologies coming in but I do not think I can call them bleeding edge now. Buzz is already started around what could be Web 3.0. But I am not talking about technologies, concepts. No. If you are building a web 2.0 application in any space make sure you build it right.

When some concept is very new, there is not a lot of penetration in the market, you can get away with ugly applications. You can get away with mediocre implementation, pathetic presentation as user has not seen what can be done with these concepts, technologies yet. But once the market starts maturing you need to make sure either you are providing something which is completely not provided by any one else out there OR make sure your presentation, usability, implementation is par with the competition. You should not expect to get into a brown market with mediocre product and think that users will give you more chances to better your product.

Yesterday I got invite from an application developed by a entrepreneur I know from some time. I was hoping for a very kick ass implementation as the domain he has ventured into already see 20 different players. But sadly I could not even get through with Screen 1 of registration process. And believe it or not, they have been developing it since almost an year now! Plus have some angel funds available to them.

In my opinion if you are building a web 2.0 concept, in today’s markets your first impression is going to be your last one. Lot of socio-net applications came in India in 2006, all with really really awful user experience and now they are about to be shut down. So first impression matters, do not expect you will get time to incorporate user feedback etc.

Startup, Technology entrepreneurship, startup advice, startups, Usability, web 2.0

Most of the consumer Internet startups ideas come from need of the concept to entrepreneur. Many successful startups (even Google) have been conceptualize this way. People try to do certain things and when they do not find a good solution, they have the idea for killer startup. Fair enough.

But at some point, very early in evaluation, you have to realize that you are not going to be only user of the product. In Internet consumer space, you will have to attract millions of users today to be successful. And even after having such large user base you may fail to monetize it. So you have the idea. Good. But now do some user behavioral research. Do some basic market research. Which users are using similar applications. Why are they using it. Is it just cool factor? Or is it really adding value to their online presence?

Once you have done this research and still think your concept is worth pursuing further. Great, go ahead. But stop telling me that, “I personally never used this”, “I personally would like this feature” etc etc.

Startup entrepreneurship, internet consumer, startup advice, startups

Many startups start developing their product with out a ‘development plan’.  Many of the entrepreneurs I have talked to, found this as common thing. Common mistake that leads to mediocre technology is not having a decent development plan.

Well yes, startups can not adhere to some plan. Things are figured out as we go along. Things are added, removed, enhanced many times during the first beta release. But, that does not mean we can not have a plan for development.

Problem I see is, if you do not have a plan a target release date, you are aiming at a target which is not there. Result, you miss! and you miss BIG time. Worse is startups that put in place a very very aggressive development plan. 200% of times that target is never achieved. Once you miss one deadline you are going to miss many deadlines.

You need to find out set of features that you are going to implement in first release, no matter what. Find out function point estimations for this. Do some basic resource management math. Put it in an spreadsheet (I personally recommend Open Office!) and start shooting.

Now if you come across things that needs to be added, enhanced put them under on-hold changes. Release the product (even if internally) on or before the target date you had set. And then start incorporating those changes.

Advantages you get is, changes are required too often. Dev cycle is broken, processes go out of window when you change too often. Also many times changes are done and only to rollback in couple of days time. So time is wasted and wasted again. Instead keeping changes on hold, gives you time to really think about it. Make sure you are going in the right direction and not detouring so early in the development.

Summary: Always and always have a decent enough development plan in place and try to follow deadlines. No matter how cool features you have, how ‘All Stars’ development team you have. Teams have struggled hard when they do not follow at least basic software engineering principles.

Uncategorized entrepreneurship, Process, startup advice, startups

Did you hear people saying this is the best time to startup? Off course you did, it is all over! Everyone wants you to startup. Every one is saying, “Technology has made it the best time to startup”, “Cost of starting up is so low right now”, “Just assemble your team and starting kicking ass”. Fair enough on their part. But I do not agree.

VCs are saying this is best time to start, as off course they are looking for good deals.

Media is saying (bloggers,  tech-media) so as they always need ’something’ to talk about and drive their own growth.

What you need to understand is -

1. Do you believe in yourself and your vision for becoming an entrepreneur?
2. Do you believe in your concept?

If you believe in these 2 things, do not wait, just start. No matter where the economy is going. No matter if shadows of war are looming over. No matter if people think you are stupid or brave. You have to, absolutely and 100% , believe in those two things. Time is right when you set it right.

Startup entrepreneurship, startup advice, startups

Now this is completely through experience. I did not do any of the following mention things and it hurt us BIG time.

• Increase your online presence BIG time.
  • Start a blog. Even if you are not a great writer. Does not have stories. Just start the blog.
  • Put up information from other blogs with links to slideshares/youtubes/celebrity blogs.
  • Make sure you start sharing your URL with friends. Use simple SEO techniques to drive traffic.
  • Keep updating the blog at least twice a week or so. Make sure you reply to comments.
  • Comment on other blogs with link to your blog.
  • Make sure you start an independent blog. IE something like sushrutbidwai.com rather than sushrutbidwai.blogspot.com.

• Twitter
  • For now twitter in India is used by people who are very active on entrepreneurship scene.
  • Bloggers, entrepreneurs are very active on twitter.
  • Use it to connect with the community.
  • Have a conversation. Build your network.
• LinkedIn
  • Update your linked profile.
  • Increase your network.
  • Be active on groups related to the market your are getting into.
  • But don’t be open net-worker. Desperation has not given any one results.
• Unconferences
  • Barcamps and other tech camps like PHPCamp, OpenSocialCamp are great ways to connect with start-up community.
  • Make sure you are regular at these events.
  • Travel far and wide to reach out to the community across India rather than just your city.
  • If possible present something. Conduct few sessions.
• Customer relations
  • If you know who are going to be your customers, then start talking to them.
  • Find out events these people go to and attend those event.
  • Subscribe to groups related to your customers on linkedin and be active there.
  • Start preparing list of customers you have in second-degree network IE contacts of contacts.
• Competitors relations
  • Since you are just planning at this stage, competitors will not hesitate in talking with you.
  • Conferences and unconferences are great places to talk to competition.
  • Connect with talent working with competition.
• Investor relations
  • This is probably the most important thing to do.
  • You will find investors at conferences, events like Proto, HeadStart, WATBlog Mixer and many such events.
  • Angel investors are also great help in providing mentoring. They are much more approachable, available and willing to help out young entrepreneurs.
  • Do not mention funding requirements ever when you meet investors informally.
  • Ask for advice, pointers, guidance. People help you when they like you.

<This is going to be a series of articles. I will also talk about how to prepare for the entrepreneurship itself>

Startup entrepreneurship, networking, Startup, startup adivce, unconferences