Vijay Anand | The Startup Guy.

Archive for the ‘Open Source Innovation’ Category

I mean someone who develops for the Mobile Platform, not a developer who is always on the move :)

Well, there are a few platforms that you might be interested to play around with, if you have an interest for embedded systems, and especially the mobile platform. Here it goes:

MobiSy: Rich Applications for your Mobile.

OpenMoko: An open development kit – Imagine having a phone with everything unlocked, and nothing beyond the realm of control by code. That’s what OpenMoko grants you. It’s a fabulous kit for folks who want to go beyond developing apps for Java or Symbian, or Windows Mobile.

Android: Well known. Enough said.


Bug Labs
: Custom-build your pieces. I found this a few days ago, and am absolutely floored. The beauty about this kit is that its not restricted to mobile handsets. Its almost the lego of the electronics world.

Mango Technologies: Mobile Application Framework. A Bangalore based company. Related note: Check out Mophun, a mobile gaming application Framework.

Flashlite: When this thing gets mainstream from adobe, we better watch out for some deadly applications.

QTopia from Trolltech, an application platform and User Interface Layer for Linux powered devices – handhelds, and the likes.

So why am I mentioning all this? If a Luxury handset manufacturer in Bangalore has gotten funded $2Million, what are the next set of pieces which will have to fall in place?

Professional User-Generated Content. You think its Oxymoronic? Think again. Let me cite to you two examples. Rocketboom, and ZeFrank. I dont think Frank is doing the show anymore, but Rocketboom is essentially a low-budget, five minute clip which basically is one of those “tequila shot” videos, giving you a summary of everything thats going on out there. Sports, politics, Gossip, IPL, Entertainment, you name it.

It will make sense because:

1. Our Broadband penetration whatever the 4.2 million users are, are all essentially mostly IT Professionals.

2. These chums, have no interest in anything apart from Cricket, because they dont have time to understand the decades of stories behind political quibbles and other issues going on.

3.Humor has slowly begun to find a way among this crowd and given that these guys are all young, and most of them watch shows like The Simpsons, Family Guy, and Even South Park (Please dont ask me what these shows are), a show done with a live-actual person, but on the same lines of humor, will bring about active engagement in a interesting fashion.

Rocket boom Stats:

+ Over 1 million post-roll complete downloads per week; 200,000 viewers per day
+ Over 500,000 text impressions per week of company name & link; 100,000 per day

The Video infrastructure, the entire thing to make this happen, along with the infrastructure to play ads and monetize this is, is available with two indian Startups – Ventuno Tech and Tekriti Software. If you have the guts (everybody in the media business needs guts), the ability to produce a show, and get a couple of eager, hyper, good-looking people on camera, you are game!

I think I have figured something. It goes something like this.

Markets and Companies are neither created nor destroyed. They just transform from one form to the another.

I’ll give you some examples. Amazon.com when it started in 95 was a very ambitious project. A few years later, they were raking in 30million dollars as revenues. But where did that money come from? Very few people think about it, but customers are a finite set. God isn’t growing customers on trees yet. So essentially what happens is that since the need hasn’t exemplified, just found a better solution, people switch from one service to another. The year that Amazon.com announced its $30mn revenue stream, the music and bookstore industry had lost close to 2billion dollars. Disruptive? Yep, if you are a startup and on the growth curve, very much so. Scary? Absolutely. Especially if you are three days old and even have a handful of customers.

I think this is a very basic understand that we need to have. Markets are not created. All this talk on Markets, and blah is just a segmentation process that economists and entrepreneurs have to work with to figure out how to shape their product. The truth is that there are consumers and consumers or clients are essentially people. And People are finite. if you work backwards, then so are markets.
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Up until a couple of years ago, the concept of “First movers’ advantage” had some credit to it – atleast in the web world since it was quite nascent. Lately more and more folks are realizing, and rightly so, that whatever happened in the PC Platform, is repeating itself in the web world. If you are creating a market, moving first essentially means that you are going to be deploying a whole array of tactics – including pumping in money – to get the word out as to this mysterious problem that people have and how we’ve gone for so long without knowing that we had a need for it and now that we do, here’s the solution.

The Only analogy that fits this strategy is what happened in the US when the colonization began. Obviously, everyone was quite familiar with the “yellow Dust” that the native Indians simply didn’t care for. And when the immigrants did arrive, and realize that there was gold just lying there in the river basins, the rush was to essentially get to where no man has even been to – to enjoy the luxuries and wealth that he might find.

I am slightly against the so called first movers advantage, because it essentially means that you are planning to go find a problem – hopefully a real problem – and stake the entire zone for yourself. Hmm. It usually doesn’t work. Here’s why.

The market is global. And News travels fast. By the time you actually create that awareness wave, it will spread much faster than the company can expand operations. It will then turn into the inevitable home turf vs. foreign markets and we all know how that game goes. You start playing defense from day one.

Customer Loyalty is on a lowest low these days. There is no such thing as inherent branding that happens – especially if its in the web world. Sell someone a Sony Bravia, and since its a more tangible product, the branding aspect still sticks. When it comes to services and applications around the web, nope nobody cares. I’d flip in a jiffy if I find a better tool that does what I want to do and expands my productivity.

The First Mover advantage, (a.k.a The Goldrush strategy) works where niche products and brands are in play. For a startup, those are dangerous and long term goals to achieve and there are more pressing needs.

I am lately realizing how many of the hip companies of the internet which was so hot last year, arent anywhere now. I was fighting over everyone to get a subscription about in Scribe and I do like what they do, except that I also have plenty of alternatives. I am not even sure if I remember my username password there. I am sure you can think of many more names that I could. I want to focus on what it takes to build a company that lasts a lifetime or even more. In a day and age, when it seems that most of the hottest companies also seem to be dying off pretty rapidly, that’s a thought that almost makes me smile… and wonder.

Venture Capitalists and Entrepreneurs call it Business Models. Economists call it as Game theories. They are such fabulously mind-stimulating equations. The equation which essentially makes someone give up hard, liquid cash in order to avail a service, and enable you to make a profit. It’s really quite as simple as that.

How do you get to that, is usually the question. If you do understand game theory, then valuations and how they are raised, along with expectations, become a wee bit simpler to comprehend. If not, its time to hit the books and look into what “Game theory” is all about.

Sometimes, the valuation game that the so-called MBA founders of startups are playing, start to get simply ridiculous that its good to return to the math and make one and one add up to bring back some sanity. Here’s the basis of how companies survive. If you don’t have one of these, you are very strongly advised the drop the high valuation game, and think of a way to claim one of these.

Strategy #1: Build Long Lasting Technology Claims.
I really don’t care what you think about Microsoft, but from a perspective of Intellectual property, and strategy, Microsoft is a company to learn from. Microsoft, Intel, IBM, all thrive on creation of Intellectual Property. Microsoft is infact quite a fabulous case study to follow, as its one of the longest running companies which still claims dominance. Given the sheer amount of grasp that they have – everything from the platform underneath your feet, the diversification of devices, and especially in how standards are dictated, they have a sure footing for sometime to come. I’d even dare say that Wikia (or some such guy) might put google out of business, but Microsoft will remain.

Strategy #2: Enter a very conservative market and dominate it.
The trick is that the entry barrier is high. Atleast it is conceived to be. it is a sector that folks are scared to get in. Case in Point: Durex condoms. How many folks do you know who want to get into the condom business? How many people do you know who want to make lingerie in India? They are all very fabulous businesses, for people with guts, and pretty much an open field for them to exploit.

Strategy #3: Scarcity is a goldmine.
Look at the headlines that India is making. There is almost a civil riot that is at the verge of breaking out because of the prices of commodities going up, and there are insinuations that there are governments who are hoarding these grains so that the prices go up. More demand, raises the price. it’s quite as simple as that. To lets get to the topic. Anything that is scarce, will demand higher price. If you hold one of the three operating licenses for the 3G spectrum, yep,that will be worth a pretty penny. If you hold land in an area that is quickly running out of space, yep, thats pretty much a gold mine. I’m sure you get the idea. It has to finite, and limited. If that is the case, pricing and survival is pretty much guaranteed.

Strategy #4: Control Standards.
Be part of every consortium which chews out standards and have a say in it.

Strategy # 5. Insider Info.
Imagine standing in an open view of the market and you alone know something that others dont. It could be simple as a technology trend (look at Ray Kurzweil), or something of very minute knowledge that adds to your efficiency to play your cards right.

Strategy #6: Build a reputable Brand.
Brands take ages to build, and ages to die.

Strategy #7: Superior Expertise.
This is most often the most common reason than any other for a startup. You might have heard this question a little differently as “So why do you think you are the right person to execute this idea?”. The answer to that question is essentially to figure out if you do understand something that others dont and have total grasp on the subject. This is the reason why when some senior personnel of a well established company goes out and bootstraps a startup, the valuation and expectation of the market is tuned to expect something fabulous – if nothing atleast a fabulous disaster. This is why teams make for the greatest assets and liabilities of a company.

In short, this is how things work. Lets say you have a startup and your shares are valued at INR 100, and you have enough shares allocated to put you at a valuation of One Crore. The simple math is that, whatever your current revenue is, be it six or seven paise or maybe even in the negative, people value you higher and put money into you hoping that in the long term you will benefit. It’s really the basis behind valuations. It’s all “In the long run”. But there is ofcourse a finite length to that, and people are going to constantly keep comparing their returns to the interest rates they can get from banks, ROIs on other assets and comparable other investments. You are going to have to measure up.

“In the long run” never happens, if you dont even exist. And the only way to ensure that you are there in the long run is find yourself a slot in one of these categories. If you havent, or cant, i wouldnt be too surprised to see someone sideline you and get ahead not too far in the near future.

Consumers are ready for physical media to be completely obliterated.
– Inspired by Brad Duea, President, Napster

When I was barely a teenager, my computer instructor taught me a golden rule. Whenever you come across something interesting, complex and mythical that blows away your mind, rest assured that the following cycles will follow: In the case with computers, You will keep going from “Oh my god, its a computer!” to “Bah, its just a box which does stuff I tell it to do” to “Holy Molly! I can do all this with this”, and the cycle keeps repeating itself. It’s a constant roller coaster ride being amazed to bored to frustrated to being excited all over again, with each progressive cycle the medium evolving.

It’s been more than a decade and that rule holds true, so much so. Social media is no exception to the rule.

While blogging was something that started off as a means of enabling conversational thoughts among a team of folks six years ago, it has essentially became a way to collect my thoughts, and verbalize them, and communicate with a larger medium for me. I trust sources on blogs (since most of them are personal blogs) much more than I trust the traditional media when they run an article on the same topic, since the difference is the authority on the topic. Time and time again I am realizing the traditional media to run articles with numbers which make no sense and quotes which are diluted that I am starting to lose faith in them.

So What’s really happening here? Well, That’d what I’d like to know.

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Most enterprises in India look to “more economically viable” markets abroad as their target customers. If you ask them why is it that we are never focused on local demands, and the market that is seemingly so huge and is often quoted to be one of the fastest growing, the response is usually the same: “They Cannot afford this service”. Despite, seemingly valid claims, the stability of an economy depends on diversifying your target markets and India being this large pool of potentially huge market is being eyed by foreign companies as a last hope and last stand for their company stability, all this while we are still looking elsewhere for our hope to shine from.

An average television viewer cannot afford the cost at which shows are produced. A startup cannot afford to get a paid mentor onboard though it might essentially be the secret sauce of success. Most developing countries cannot afford the lifestyle that developed countries take for granted. Most booming economies still cannot afford the price tags of “brands”. Folks in Chennai, bangalore and most of the growin ‘n’ emerging urban centers cannot afford housing within city limits. Most people in rural India cannot afford most of what urban india consumes and produces. If you really think about it, in the economics of transactions, very little is part of the category where people can really afford it. For everything else, there is mastercard :) I wish it was simple as that.. But nope, I can only wish for that.

This is also a train of thought that has been going on in my head partly because I work with two verticals. Startups and Rural India and both of them have a small and interim cash flow problem. Alright, perhaps a slightly bigger and long term cash crunch problem. They are both probably at the extreme end of the “affordability” spectrum but they are very much alike. Both are valued and perhaps looked upon as the fastest growing, and the next big thing to happen and corporates are rightly looking at both of them for their next big growth. The parallels are really strong, and almost face the very same issues.The issue is, who pays for the services rendered to them now so that we can cash in when they grow strong.
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