Techsparks 2012: India’s Top Product Startups

Techsparks 2012: India’s Top Product Startups

by Madanmohan Rao
Research Director, YourStory.in
http://twitter.com/MadanRao
Bangalore; September 8, 2012

Kicking off shortly in Bangalore: #TechSparks 2012 showcase of top product #startups in India! http://bit.ly/N6XKDY http://YourStory.in
If you are just logging in – see background to Techsparks 2012 at http://bit.ly/PDaBd5

Shradha Sharma, Founder/CEO, YourStory Media kicks of Techsparks 2012
6,000+ startup are now profiled on YourStory.in A third of the #startups we profile have got funding
Over 52% of the startups we profile have received business leads and deals
YourPages feature on YourStory.in has over a 1,000 startups in the database
Growth of Techsparks: 1 city (2010), 2 cities (2011), 6 cities (2012: 2,000 entrepreneurs, 800+ applicants)
Shradha shows timeline of Your Story’s growth since 2008; new research reports on the way

KEYNOTE I: SHAILENDRA SINGH, MD, SEQUOIA CAPITAL INDIA

An honour to be in front of so many top entrepreneurs of India
I have been involved with 25 investments in India. We are 40 years old (US, China, India, Israel)
Internet, tech, mobile, big data, payments – our key investment categories in India
Companies are built by teams, sacrifices. Need balance of talent, energy, skills, experience
Some business need more of execution (eg. e-commerce), others need more of technology (eg. product)
Case study: Druva – we built a dual-shore team (US, India) in the last tow years
Common mistakes – hiring under time pressure, inadequate ESOP pool
Common mistakes – trade off cash for equity, not hands-on, only big company experience, low motivation
I would trade off enthusiasm for everything else; translates into good culture at the company
Indian startups do not provision for enough ESOP. Team does not feel part of the company. This is valuable but finite currency
Recruiting Ideas – “top 3 picks” test, test project, weekend interview, independent references, post-offer ‘love’
Qualities of a good product – usability, tech innovation, analytics is your map. Land and Expand. Drive usage first
You should be your own customers also. 10% of features are used by 90% of customers
Case study of company which started off with just a few features then expanded to a full suite of features
Pay attention to attrition of your product – why do people not stick to your product? Have an attrition metric
Our current favourite product in our portfolio is DropBox – they embody many of the features I listed
Sample cohort chart – how customers are contributing to your revenues over time
Leveraging customers – involve them with your stakeholders (eg meet board), train them; service is a marketing tool
Keep process for feedback. Testimonials rock!
Case study: Mu Sigma – analytics was sold as a capability. “Go beyond biceps/triceps to general wellness”
What investors look for – integrity, ambition, passion, sacrifice, frugality, conviction, understanding of market, articulation
It’s ok even if investors don’t understand your USP in the beginning, have the conviction to stay the course
Case study – JustDial – founder failed the first time but re-started it; did not invest in other firms
More mistakes – omitting key facts (eg family ties!), over-selling, “I will resign my other job when you fund me”
More mistakes – opportunism, don’t know your numbers, too flexible on strategy, obsession with valuation
Be honest about what you don’t know. Don’t needlessly trash your competitor
Do unit economics – value from products, customers; margins, break-even points. Holds up even with early-stage losses
How to choose investors – have they done it, often; will they help not just start but build the company?
How to choose investors – do they work beyond normal hours, speak to their entrepreneurs, look for transparency
Get to know your investors well in advance of fundraising
India has seen a massive explosion of angels, advisors on their boards
Check with domain knowledge of advisors, time commitment, references; build clear expectations, fair economic understanding
Common mistakes – busy advisors, not enough chemistry, living in the past, inadequate diligence
Other tips: build a great culture, over-invest in communications, focus on what you can change. Work-life balance is a myth!
Culture is build on Day One! Every decision, meeting, communication counts
Pay attention to detail, that is what great companies are known for
Don’t feel compelled to put numbers you don’t believe in; guesstimates are OK for investors
Q from TaxMantra: What are investors more interested in – products or services?
Investors are not looking at me-too services businesses; they want you to lead a niche. Product mixed with services is OK
If you work for a startup, your CEO’s problem is also your problem. The ball is in all of your courts!
Startups should treat failures/problems as a blessing in disguise

PANEL DISCUSSION: “SCALING YOUR STARTUP”

Moderator: Ravi Gururaj, Vice President – Cloud Products, Citrix
Panelists: Sequoia, Intel, Google, Amazon, Philips; Karnataka government

Narendra Bhandari, Director, Intel Software & Services Group: We are going through startup phases of our own
Narendra: Coordination and culture can be a problem for companies as they scale
Dr. Wido Menhardt, CEO, Philips Innovation Campus, Bangalore: Inflection points in growth – relationship with VCs on board
Wido: Challenges – board member VC wants to sell your firm, hire another CEO, merge you with another company
Wido: Inflection point of starting company into exiting the company – need to understand this transition
Gautam Gandhi, Head – New Business Development Emerging Markets, Google: Ask yourself why you should scale
Shailendra Singh, Managing Director, Sequoia Capital India: You have scaled when you have won your market
Gandhi: But success is not necessarily winning your market! Each company has its own vision.
Joe Ziegler, Amazon AWS Evangelist for ANZ: We live in a massively inter-connected world, as compared to my Netscape days
Joe: ‘Scale’ means different things in India/China as compared to Australia! <laughter>
Joe: Infrastructure has scaled up now, makes it easier for startups to launch and scale now (servers, data centres)
Maheshwar Rao, Industries & Commerce Department, Government of Karnataka: We would love to have more startups here; jobs and taxes for us!
Maheshwar: Gov needs to scale up investment for startups to grow, create an enabling environment
Ravi: Amazon is showing that you can grow slowly as well. Amazon is the most valuable IPO company in the world
Shailendra: Amazon is focusing on the very very very long term; exceptional story (cloud, AWS, Kindle)
Shailendra: We are willing to take long-term bets with Indian companies too. In this day and age companies can grow very fast
Shailendra: JustDial never grew more than a 100% a year, but never less than 40% a year
Gandhi: Startups are in fashion today, but only passion to solve personal problems you can relate to will help you succeed in the long term
Gandhi: There are more opportunities today for #startups in India than anywhere else in the world – have to be seized
Ravi: Some startups have ‘malnutrition’ problems – not enough funding!
Narendra: Another problem for startups – you bring in talent but don’t believe in them.
Maheshwar: Gov should become a co-creator for entrepreneurship movement. VC funds in BT, semiconductor space
Narendra: There has been talk about policy paralysis in India, but there is movement on skills development, UID, e-services
Narendra: Look for ‘blue ocean’ opportunities right here in India

Q: It is easy to start up companies in Australia, can we have a similar gov services portal for us entrepreneurs in India?
Q: How should Indian product companies expand from India customer base to global?
Shailendra: Barrier to creating global tech product companies from an India base has been broken several times, eg. InMobi
Shailendra: Indian travel startup is now largest online travel company in the Philippines!
Q: When should a young startup start investing in marketing to foreign markets?
Gautam: If you have the mindset of being global, make sure your Web presence is also global eg. US phone number, social media presence
Q: Startup growth journey is just like navigating Bangalore’s roads!
Joe: Notions of profitability and margins are changing year by year
Guatam: Advice from my mom – you are the average of the five people you spend most of your time with!
Gautam: Surround yourself with smart people. Don’t become the smartest person in the room
Gautam: The right team will help you get to the right product, even if you don’t get it right the first time
Q: How should startup approach B2B v/s B2C markets? How to negotiate the tradeoffs?
Shailendra: Look at stickiness of product, use-case scenarios, engagement metrics
Shailendra: Not all businesses are meant to be invested in by VCs. But VCs want scale in their investments
Q: How important is business model for those of us who do not have an MBA?
Gautam: Do you come from a wealthy family? <laughter>
Gautam: Google, Amazon help startups scale in a way that was not possible even 5 years ago
Shailendra: Large numbers of companies/investors are willing to take investment risks; unprecedented in the Bay Area and India now
Shailendra: Disruption – you can launch a product today with $10-20K, not millions as in previous times
Gautam: Conviction comes from showing what your personal investments are in your business, eg. your own savings
Ravi: Q to panel – when to stay focused and when to spread wings and go global?
Narendra: I travel across Asia and meet audiences like this. Not all startups can go global within a year
Joe: Solve a problem that you know really well, and make sure that it is a problem a lot of people have
Shailendra: I have a different view – you can go global fast. Look at Scandinavia and Israel, there is only a small local market
Gautam: Pick something you are passionate about and will immerse yourselves in for the next 10 years. Hunter who chases two rabbits catches none
Wido: You can scale in terms of features, geographies – and customers can suddenly emerge in different parts of the world

Shradha Sharma, YourStory -  #tsparks is now trending worldwide! <applause>
Tech30 2012 report on top product startups of India is now being unveiled

SESSION: HOW THE CLOUD IS CHANGING STARTUPS & VC INVESTMENTS

Pieter Kemps, Principal, Business Development & Venture Capital, Asia – Amazon AWS: Instagram had 14M users within a year, just 3 engineers
The cloud fertilises startups. Amazon changed the VC industry
(i) 1990s startups had to pay for their own servers, software, etc. (ii) 2000 – rise of open source (iii) 2005 – cloud
Series A funding requirements have come down (i) $15 M (ii) $5 M (iii) 0.5 M
2007 – Micro VC/seed funding, spurred by public cloud. Boom in incubators also
Pieter – you must read The Four Steps to the Epiphany: Successful Strategies for Products that Win, by Steven Blank http://amzn.to/I2OldY
DropBox, Druva used Amazon Web Services – quick launch, reliable, secure, uninterrupted
IndiaGames (acquired by Disney) also used AWS. Removes ‘undifferentiated heavy lifting’
Other Indian startups who used AWS – RedBus.in.

Joe Ziegler, AWS Evangelist for Australia and New Zealand: I used to be with Netscape, which shows you how old I am!
Netscape’s model was selling server software; at one point every online eyeball in the world was on our site
Joe contrasts Netscape’s 1990s example with today’s AirBnB, Pinterest using AWS
Netscape IPO – $1B, 250 people. Pinterest – $1.5B, with 31 people
Joe cites Newton – #startups today are standing on the shoulders of giants

Looking forward to the networking lunch at Techsparks 2012!

SESSION: HUMAN CAPITAL AND STARTUPS

Anuj Roy, Partner, LongHouse Consulting www.longhouse.in Human capital challenges for startups – choice of CEO, alignment with investors, structure v/s skills, risk v/s reward structures
Evolution of leadership needs: i. Tech ii. Business acumen iii. Leadership/strategic view
Aligning entrepreneurs’ and investors’ objectives can be a challenge. Loyalties v/s expertise, global v/s local, near v/s long term plans
Should structure follow people, or people follow structure?

PROFILE: Two winners from Techsparks 2011

Sriram/United Mobile Apps (founded 2009) www.umobile.in Kepplr solution for synchronising cloud data
We make things Simplr, Safr in our Lockr (including information you don’t want to share)
With Kepplr you can work Fastr and organise your life beyond a Foldr
Next phase – Kepplr for enterprises (B2B apps) – securing data and devices. Also Internet of things

Mukund Mudras, Managing Director of Heckyl Technologies www.heckyl.com We provide realtime financial information, news, analytics
We have been selected to present at Finovate 2012 in Singapore www.finovate.com/asia2012

KEYNOTE 2: KRISHNAKUMAR NATARAJAN, CEO, MINDTREE

David Thomson –1 in 50 ideas becomes a business, 1 in 20 funded business sees an IPO, 1 in 20 public companies achieves $1B turnover
Success factors – clear value proposition, collective articulation, treat people as part owners, get the balance right
We worked with Cambridge Tech to position ourselves as specialist Internet solutions company.
Success factors – willingness to learn from others, mutual respect, seeing every problem as an opportunity
Leadership – benchmarking with the best cross-industry practices
Six Golden Rules for #Startups: divide and conquer; differentiate; focus; niche=loyalty; opportunity; simplicity
Respect stakeholders, treat investors’ money as your own (eg. don’t splurge!)
Startups fail when they don’t see their own blind spots. Some don’t know when to let go
Have the humility to learn from unusual sources, especially in these times of unprecedented change
Startups should plan for segmented pain! Have plans for continuous learning

APP4INDIA WINNERS

Intel awards its App4India winners: http://yourstory.in/events-listing/app4india/
MetroPhoto, GoLive, Tvparty, RemoteControl My Phone, PollingWizard, etc.

PRESENTATIONS FROM TECHSPARKS 2012 FINALISTS

(i) Little Eye: We do power profiling tools for mobile app developers. Power consumption is a painpoint for smartphone users
www.littleeye.co – we will have enterprise/individual subscription models

(ii) Treetle www.treetle.com – Location-specific interest networks. “Connect, do.” Neighbourhood connections
Treetle target markets – individuals, NGOs (eg. volunteers), corporates, alumni. Filed for search/discovery patent
Treetle USPs – hyper-local communities, free to use, e-wallet, strong recommendation engine
Pankaj Dugar/Treetle – I am a Marwari, so I wouldn’t be doing this if there was no business model! We have 1K clubs, 2K users

(iii) JusPay www.juspay.in Creating simple and secure payments. Payment dropout rates – 30%
We are ‘angry nerds’! Vision – digitise 25% of transactions in India by 2020
Future of digital payment in India is mobile. Demos: IndiaPlaza, RedBus, Hoopos

(iv) Diabeto http://diabe.to Tackles problem of monitoring glucose readings, managing eating and lifestyle
Diabeto device wirelessly transmits glucometer readings to mobile phone app, can also be sent to doc’s device
Shreekant Pawar, Diabeto: key target is B2C. I was formerly with YouSendIt. Initial angel funding – Amir Shaikh and Startup Chile

(v) Gamooz http://Gamooz.com Mobile AR apps, enterprise services. 50 AR apps in a year. Ford India – AR app based on Layar browser “Ooze games!”
Gaurav Wadhwa/Gamooz – we have filed for patents, some have been awarded. Manufacturing scenarios – scan for defects. SAP apps

(vi) Impact Index www.impactindexcricket.com Alternative statistical analysis tool for cricket
We have been selected for cricket analysis in Australia. People take us seriously in India now!

(vii) Harness HandiTouch www.harnesstouch.com “Create. Connect. EnGauge.” Learning OS – touch on cloud. Makes class collaborative
Superb demo – instructor can see what students are doodling on their tablets while answering questions! Students can collaborate also
Vision – students will go to class only with a tablet in their hands. Scale to UAE, Singapore, beyond
Business models – bundled tablet; tablet lab; BYOD. $2/$3 per student per month
HarnessTouch currently works with schools/teachers; next – B2C.

(viii) Pankaj/Colimetrics www.colimetrics.com Organisational fat = excessive bureaucracy. We monitor emails to determine lipid levels in a company!
In large companies, managers do not have visibility into operations; lots of escalation, firefighting. Our tool analyses emails
Use case scenarios: security hole in admin module, long reference check times
We don’t mine the email body but metadata (eg. response times)

(ix) Anil Srivatsa www.Radiowalla.in www.SpotRadio.in We would love to use Impact Index stats!
I am 45 now, been doing radio since 7; my co-founder was with Radio Mirchi. We do B2C and B2B2C radio
We customise radio programming for retail chains (SpotRadio). Revenue – ads, monthly management fees, revenue share
Radiowalla is like Worldspace – curated content, not mass content; with subscription. Channels – All That Jazz, fitness, recipes, books, etc.
We have our own non-music content also, eg. Art of Living radio; Kiran Bedi talk show
Big B2C market – cultural music for diaspora markets. We can do this in any country, not just India
We are running 75 radio stations with only 30 people.

(x) Praxify www.praxify.com Cloud based practice management solution for doctors
Praxify synchronises records between GP and specialists. In India, EMRs often not used at point of care
Eliminate typing at the point of entry (apps, tablets). Single point of reference for docs and their patients
Target = 80K doctors in India in 3 years (10% of overall market). Docs, clinics, hospitals.

(xi) JustUnFollow www.justunfollow.com We help unfollow people on Twitter! Helps you remove spammers
Vision – be the friend management dashboard for all social networks, eg. Instagram, Facebook, LinkedIn, etc.

(xii) Amardeep/MilkOrWater www.milkorwater.com We provide unbiased stock ideas to long term retail investors and consumers
Need to democratise financial info, bring in financial inclusivity, ensure transparency
Our proprietary software makes stock recommendations based on consistent performance of analysts
We track analysts’ forecasts plus their performance. “Analyst of analysts”

(xiii) DataWeave www.dataweave.in Data is the new soil. Indian government is looking at Open Data. How to harness this data from apps and analytics?
Data verticals that we tap – price intelligence, open government, content driven data
Customer segments: app developers, market research/BI firms, media houses

(xiv) CollateBox www.collatebox.com We organise your growing data lists from spreadsheets. Showcased at Demo.com in SF
We collect data and clean it. User can also add rules. We add visualisation features

(xv) Mango Reader www.mangoreader.com “We bring books to life” – using videos, animation, quizzes, maps, graphics
“The next lesson in learning” – content becomes an action item. We have e-books in our store, add engaging apps
Vision – become the iTunes of interactive books. Bring together publishers, educational developers
Appropriate to hear this presentation on World Literacy Day! <applause>

(xvi) Teach A Class www.teachaclass.org “Education everywhere” – volunteers can signup to connect with orphanages to teach a class
Started in Indonesia and Mongolia, now in India too. Take the cloud into the classroom. ‘Micro-cloud’ device + aggregated content
Education micro-cloud is more than an offline server – can be synchronised with cloud to update content
Used in a slum school in Mumbai. We have also received requests from schools in Africa.
Q: Are you a for-profit company or an NGO?
World Bank, Mercy Corps are using our device in Mongolia
We have a for-profit and non-profit arm

Winners of Techsparks 2012: (3) DataWeave, Diabeto (2) HarnessTouch (1) JustUnFollow

CONCLUSION

Jury comments – quality of contestants this year is better; diversity (domain, geographic focus); focus + creativity in India
Shailendra/Sequoia: It is humbling to see startups here today doing so much with so little. This will affect India’s future development
We are fortunate to be a part of this ecosystem
Rousing applause for Shradha and YourStory team, what an honour to be part of this group!
My compiled tweets: Techsparks 2012 http://km.techsparks.com

See TECH30 Report 2012 for profiles/URLs of top 30 product #startups in India: http://bit.ly/QrgGZq

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