Vijay Anand | The Startup Guy.

The Core of a Product Business: A Middle Eastern Perspective

Posted on: August 31, 2007

There is just about only one way to create wealth. Provide value and you can collect the cash from the person you target it at. It’s actually quite as simple as that. This is the principle that product companies focus on and intend on cashing in on, and hopefully have a long and peaceful life, somewhere in the islands of bahamas. That would be the dream.

I recently met with Vishal Gondal, the CEO of Indiagames.com who was in Chennai as part of the World Cyber Games ceremony and it was nice to touch base with him after the long and extensive chats and conversations that we’ve had over email. There is due credit to the man for almost being a pioneer in the nascent gaming industry in India and in the way he is positioning his offering and himself to ensure that he doesn’t lost his first mover advantage. Those are all some very good topics to discuss about over coffee.

Our discussion though revolved around a different topic.

What is the problem that we have in India, especially with startups struggling to define their “value proposition”? That was the topic that grabbed our attention over the cup of coffee that was in front of us.

Well, many things were discussed and debated upon, but then things slowly moved towards the Middle East: Think of Israel. Think of the US. How is it that they are able to build companies where the value proposition is quite compelling? They manage to build IPs, Processes, the core technology, all of it quite well. What essentially would this secret sauce be?

This is Vishal’s Answer:

Both the US and Israel have a scarcity when it comes to talent and people. Companies simply don’t have a choice. They have to build their products with the least amount of highly skilled people that they have. What happens essentially as part of it is that, they start isolating all the menial and repetitive tasks and start building tools that could do those things for them. Instead of a country like India, where “Throwing more people at it” seems to be a common solution – and any sane project manager would tell you that throwing more people at a problem only delays the problem further, the chaos still continues. In countries such as Israel, a country which one must surely visit, if only to just observe the way the ecosystem churns. When two guys get together and they simply cant afford to hire more people, let alone bad hires, but need to build a business which will make them millionaires, there arent too many options left, rather than to innovate everything about how the team thinks, functions and processes things.

Infact he adds, “We are seriously looking at bringing down our employee size by building tools that can enable us to do our menial tasks faster and effectively and help us make the leap to the next step”. That was quite an eye opener.

I couldn’t agree with him more.

I guess in some way, the mindset itself needs to change. Perhaps VCs and even when talking to startups, one should never ask “so how big of a team do you have?”. Instead, it should be focused on the product and how big of a market they are looking to cater to.

If this point still hasn’t sunk in, let me give you some statistics. Nokia has a team size of about 100K employees and their revenue is close to 41 billion Euros. A simple math, and every employee shares a pie of about 410000 Euros. That is the beauty of building a company that focuses on products instead of services. Infact I am being quiet lenient in adding the employees from even the wireless and system integration arm of Nokia into this… Imagine, if it was just the core product team. That’s essentially what a Product business is all about!

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6 Responses to "The Core of a Product Business: A Middle Eastern Perspective"

Very interesting take on why US and Israel build companies with great value.
Working with Israeli’s and seeing their work ethic, there is a lot we can learn. And I fully endorse the opinion that everyone should visit Israel. What 7.2 million people in a land as big as our Kerala have done is simply amazing.

Good content input and nice design layout.

keep up the good work.

Sadly and unfortunately I’ve seen what you’ve described… “throwing people at the problem” time and again.

Why do Indians commonly think of re-inventing things (with the argument that we’d make the same thing more cost effective in the bargain) instead of using best-of-breed and moving on to work on the core competency?

[…] Tags: india, indiagames.com, startups, Vishal Gondal | Vijay Anand at Startup Musings interviewed Vishal Gondal, CEO of Indiagames.com, and asked him how US and Israeli startups have been so successful in […]

[…] and a year before they were acquired. Another example would be the team behind Craigslist. I have written about this before, so will stay away from it for […]

[…] Issue. The Startup Lunch Initiative The Economy: The Case for Startups Working for a Startup. A Conversation I had with Vishal Gondal, where he was talking about this issue. Working with an Army… Hiring Strategies for Startups, to attract those core members. Do You really want to work for a […]

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