Entrepreneur India 2014-02

BY DESIGN: DILIP KAPUR OF HIDESIGN ON CRACKING INDIAS LUXURY MARKET P46
www.entrepreneurindia.in FEBRUARY 2014 VOLUME 5 ISSUE 6 `100

THE
WORLD
IS OUR
PLAYGROUND
Zomato leads a pack
of fearless startups that
are going beyond Indian
shores in the search for
growth and success P34
DEEPINDER GOYAL
CO-FOUNDER AND CEO, ZOMATO
Sure, kick
the 9-to-5,
but do you
have what
it takes?
P 58
ALSO INSIDE
Mooooving Up:
Indias dairy sector goes big P50
Pitstop: The accelerator
boom gets ready for
warp drive P54
Back from the Dead:
Symphony nds its
mojo again P72
Booyah!
The growing
tribe of
travel and
adventure
startups
P 100
GROUP CEO, NETWORK18
B. Sai Kumar
CEO - NETWORK18 PUBLISHING
Sandeep Khosla
EVP - HUMAN RESOURCES
Sanjeev Kumar Singh
ADVERTISING SALES
SENIOR VICE PRESIDENT - SALES
Siddhartha Chatterjee
NATIONAL SALES HEAD
Pratima Madaye
pratima.madaye@network18publishing.com
SALES TEAM
Dennis Mathew (Bengaluru)
dennis.mathew@network18publishing.com
SENIOR SALES CO-ORDINATOR
Abhijit Bhoir
abhijit.bhoir@network18publishing.com
MARKETING
HEAD - MARKETING
Amit Seth
EXECUTIVE MARKETING
Ruchi Shrawankar
NEWSSTAND AND SUBSCRIPTIONS, DISTRIBUTION HEAD
Sunil Nair
DY. GENERAL MANAGER
Manoj Palsay
North: Kamal Bisht
East: Debraj Sur
West: Sanjay Bhujle, Dinesh Davadiga
South: Kirupanand S, Devraj N (Bangalore)
SR. MANAGER-SUBSCRIPTIONS
Sheetal Kotawdekar
CO-ORDINATORS
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Copyright2009 Entrepreneur
FOUNDER & EDITOR, NETWORK18
Raghav Bahl
PRESIDENT & EDITORIAL DIRECTOR, TV18
Senthil Chengalvarayan
EDITOR-IN-CHIEF,
WEB & PUBLISHING, NETWORK18
R. Jagannathan
EXECUTIVE EDITOR
Ankush Chibber
ASSISTANT EDITOR
Shonali Advani (Bengaluru)
SENIOR FEATURE WRITER
Shruti Chakraborty (Mumbai)
FEATURE WRITERS
Avanish Tiwary (Delhi)
Ashna Ambre (Mumbai)
ASSISTANT EDITOR
(HEAD OF COPY DESK)
Sulekha Nair
COPY EDITOR
Dipal Desai
ART DIRECTOR
Arko Provo Mukherjee
SENIOR VISUALISER
Pradeep Belhe
SENIOR ILLUSTRATOR
Chaitanya Dinesh Surpur
EDITOR - PHOTOGRAPHY
Mexy Xavier
PHOTOGRAPHER
Joshua Navalkar
CONTRIBUTOR
Sudipta Datta (Kolkata)
COLUMNISTS
Bharat Banka,
Nandini Vaidyanathan
DEPUTY MANAGER - PRODUCTION
Dnyaneshwar Goythale
ASSISTANT MANAGER - PRODUCTION
Ravi Salian
SENIOR EXECUTIVE - PRODUCTION
Ravikumar Potdar
ENTREPRENEUR MEDIA INC.
CHAIRMAN/CEO
Peter J Shea
VICE PRESIDENT/EDITOR-IN-CHIEF
Amy C Cosper
44 Intelligent Entrepreneur February 2014
Great Design
needs to be applauded
BEST INNOVATIVE
SPACE SAVING DESIGN
(Innovative design of small spaces)
BEST COST EFFECTIVE DESIGN
(Innovative solutions to save cost)
BEST INDIA MODERN DESIGN
(India-centric traditional
design in a modern form)
BEST RESTORATION
(Sensitive rejuvenation of period spaces)
BEST GREEN DESIGN
(Environment-conscious design)
OUTSTANDING AMBIENCE
(Stunning interiors of private residences)
BEST PRODUCT DESIGN
(Innovative design in furniture,
lighting, accessories and textiles)
Categories Design is an attitude.
Its no longer about
having a life its
all about leading a lifestyle
coming soon
Awarding brilliance in design
On ground venue partner :
INSIGHTS
14 Growing Your
Business
Richard Branson asks you
to pay heed to the ideas
coming from employees
16 Who Will Benet
from Modinomics?
R Jagannathan highlights
how the economy will ben-
efit if the Bharatiya Janata
Party comes to power
18 Walk v/s Talk
Manish Sabharwal advises
you to not take ones word
for it when it comes to
claims of creating social
impact, green jobs, etc
19 The Africa
Opportunity
Sandeep Singhal evaluates
if the African market is rel-
evant for Indian startups
20 Decoding Bitcoins
Alok Kejriwal draws a few
lessons for entrepreneurs
from this new currency
22 Dont Know
Ravi Kiran looks into how
often people are willing to
admit that they don't know
about something
25 Cross Connections
Bharat Banka draws some
lessons for entrepreneurs
from the world of cinema
26 Heroic
Troublemakers
Ajai Chowdhry talks
about those who disrupt
the status quo and trans-
form society
27 By Invitation
Nandini Vaidyanathan
writes about the kind of
speeches people like to
listen to
89 Change Agents
Harshada Sawant high-
lights the stories of entre-
preneurs who give back
to society without being
called social entrepreneurs
103 Understanding
Crowdfunding
Nandini Mansinghka takes
a close look at crowdfund-
ing in India
SECOND LEAD
46 The Accidental
Entrepreneur
Hidesign Founder
Dilip Kapur has
managed to make
his company one
of Indias marquee
homegrown brands
By Shonali Advani
IN FOCUS
50 White Revolution
Duex
A number of recent
deals in the Indian dairy
industry has entre-
preneurs in India and
abroad excited
By Shruti Chakraborty
54 The Hatcheries
The accelerator landscape in India is evolving rapidly help-
ing the entrepreneurial ecosystem grow
By Shonali Advani
SPECIAL FEATURE
58 Do You Have What It Takes?
Some of the most successful entrepreneurs have a few traits
in common. Check if you can see a bit of yourself in the ones
we have listed
By Joe Robinson
STRATEGY
66 Gray Matters
What should you be asking your mentor and how?
By Ross McCammon
68 What to Delegate
There are eight kinds of tasks you should not spend energy
on. Find out which ones
By Paula Andruss
34 Going Global Going Big
A few young companies are not satisfied dealing only
in the Rupee. While thinking of their end customer
they aren't just thinking of an Indian guy in Delhi but
also of the customer who lives in a time zone five, ten
or even fifteen hours behind him. We spoke to some
entrepreneurs who are going global with their game
By Ankush Chibber
COVER STORY
IN CONVERSATION
28 What startups dont do is fig-
ure out who the end-customer is
Jeff Hoffman, founder and partner
of ColorJar, LLC, an idea accelerator
company discusses the softer aspects of
running a startup
By Shonali Advani
62 Tying in the self-interest is the most sustainable
way of doing CSR in India
Gaurav Gupta, Partner and Regional Director, Asia, Dal-
berg, a strategic advisory firm, talks about the work it
does in India and how the mandatory CSR spending will
change things
MY STORY
30 Old Cast, New Hues
What did it take for the
MD of Jakson Power
Solutions to stay ahead
of the game?
By Sameer Gupta
SOCIAL ENTREPRENEUR
32 Mission Vision
In Jorhat, Assam, Parveez Ubed has set up ERC Eye Care to
deliver better eye care services in the region
www.entrepreneurindia.in CONTENTS
LEGACY
72 Cool Runnings
Ahmedabad-based Symphony came back from the lowest of
lows to make a formidable comeback
By Ashna Ambre
INNOVATORS INC.
75 A Carbon-Free Future
Carbon Clean Solutions is nipping the problem in the bud
by tackling environmental pollution caused by industries
By Ashna Ambre
MONEY
81 What about Me?
Some startup found-
ers sell personal
shares long before an
exit. Should you do
the same?
By Amanda Steinberg
82 Q&A
How much cash in hand is too much?
By Joe Worth
THE FIRM
84 Gathering Funds to Boost the Business
Learn about how you should be looking for funds at differ-
ent stages of the business
By Payaswini Upadhyay
TECH
DEPARTMENT
79 New Moves
For those looking to lose
the extra pounds, a few
gadgets are out there to
make it easier
By Michelle Juergen
80 Speech Therapist
The Nessie can make any
speech sound better
By John Patrick Pullen
HOW TO
104 Be Reviewed
Getting people to talk
about your business
is important
By Ann Handley
106 Choose the Right
Franchise
Picking the right franchi-
sor is crucial for your
satisfaction in business
108 Sell Globally
When selling only in the
local market isnt enough
for you
By Ashna Ambre
110 Develop a Discount-
ing Strategy
A good sale or discount can
get the customers excited
By Avanish Tiwary
STARTUPS
90 Bringing in the Experts
The techies and the creatively inclined are joining hands to
develop with some interesting software
By Ashna Ambre and Shruti Chakraborty
94 Just for Kicks
If you were missing the days when you got out to play a
sport, GameOn is there to help
By Avanish Tiwary
96 Styling Homes
An online platform is trying to help boththe client and
the interior designer find each other
By Ashna Ambre
98 Rent a Look
Dresses that would cost a bomb can now just be rented. A
startup is trying to make it possible
By Ashna Ambre
100 On the Road
A slew of startups in the travel and adventure tourism mar-
ket in India are spotting the loopholes in the industry and
are offering niche getaways
By Ashna Ambre
SPEND IT
112 By the Bypass
The Taj Gateway hotel at Kolkata gives you more reasons to
visit than just business
By Ashna Ambre
REGULARS
10 FEEDBACK
11 RESOURCES
12 ASK ENTREPRENEUR
77 NOT 2.0
114 BACKSTAGE
COVER CREDITS
COVER DESIGN
Arko Provo Mukherjee
www.entrepreneurindia.in CONTENTS
FEEDBACK
10 10 Intelligent Entrepreneur February 2014
www.entrepreneurindia.in
Team Building
After reading Manish
Sabarwals piece on build-
ing a team, I realized that
what he has mentioned is
absolutely right. Getting
the right people around you
and getting them aligned
is the number one objec-
tive if you are starting your
own business. For every
company, its employees are
its greatest strength. And
if you are parachuted in
on top of an existing team,
it is extremely important
to suss out whether there
are any passive, aggressive
team members (the ones
that say yes and when you
move on, do possibly every-
thing to undermine you). I
have personally come across
instances where the CEOs
were not able to get this right
in the first six months and
the results were disastrous
for the company. There have
been companies that have
performed exceedingly well
for many years, but ended up
imploding as the top talent
ran for the door. Hiring must
not be a gamble.
- Paul Keijzer, Via web
Woman Power
As featured in the article
Their Own Way from the
Woman Entrepreneur section
of the December issue of
Entrepreneur magazine,
one can observe that young
women today are taking
tentative steps into the paren-
tal world and are discovering
their own strengths. Also, the
fair sex is making a mark as
business leaders in the US,
India and in the rest of the
major countries. It proves
that modern women, i.e.,
women of this millennium
are liberated mentally too.
Complementary Roles by
Nandini Vaidyanathan, also
highlights this. Women are
doing exceptionally well in
most fields and are compet-
ing on equal terms with their
male counterparts. I believe
that more women should
go forward and work. They
should not limit themselves
to the four walls of the house.
We can say that the 21st
century woman is happy,
successful, attractive and
independent. It is only to be
hoped that even as women
come forward to take on new
challenges, the state and
its agencies will help her to
emerge successful.
- Mahesh Kapasi, Via email
Source of Guidance
I have been a regular reader
of the Entrepreneur maga-
zine for the past four years.
The magazine has inspired
me to such an extent that
I am planning to start my
own business in the manu-
facturing space. The articles
work as guides for all those
who want to startup and the
guest columns especially
are a source of mentorship.
However, I feel India is an
economy that is driven by
the services sector. The GDP
figures reflect this fact, and
hence the nature of busi-
nesses are also skewed
towards the same. There
are many success stories
featured in the IT, food and
e-commerce space. However,
I really look forward to read-
ing articles about companies
that have just started or are
scaling up in the manufactur-
ing sector so that I get an idea
on how to go about it.
- Ramakrishnan, Via email
Changing Gears
My dream is to be an entrepreneur. I am proud to say that I draw a lot of motivation and
inspiration to pursue that dream by reading your magazine. I have been a fan and an ardent
reader of the Entrepreneur magazine for a long time now. I read all the articles and espe-
cially like the startup section in the magazine.
I personally feel that the January 2014 issue of the Entrepreneur has been one of the best
I have read so farnot only was it informative but also complete value for money. I loved the
story on Mapro and the column by Branson. Not to forgetthe editorial piece, which was so
informal and yet simple.
Purushottam Amin, Via email
TELL US ABOUT IT
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Letters may be edited for
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THE COALITION TC/1 IS A YEAR-ROUND program
designed to support creative entrepreneurs and
give them a platform to present their brightest
creative ideas over a three-day event. From
music promoters and app designers, gallerists
to design studios, photo agents and fashion
labelsall creative entrepreneurs can partici-
pate. Whether it is starting a creative business,
or taking off on an idea or advice for a creative
firm that has been running for over a year,
the event plans to provide tools for every kind
of business. It aims at bringing together the
most exciting young creative entrepreneurs in
the country with leaders and senior business
figures. It will cover everything one needs to
know about building and running a creative
business through a series of workshops, discus-
sions and inspirational talks by some credi-
ble names along with live pitches to investors,
mentors and incubators. The deadline for
applications is February 5, 2014. In its first year,
The Coalition intends to directly reach at least
400 young entrepreneursanyone armed with
a great concept, business plan or early stage
venture in the creative industries through this
event. It also seeks to engage 5,000 young
creative people through the TC/fuel online
learning program, which will be launched on
March 14, 2014. On the same day the third
processTC/ignite screeningwill also be
launched where at least 30 young businesses
from a diverse group of creative industries will
get to pitch their ideas to investors or incubators
to help scale up.
'PIONEERING THE FUTURE' IS THE THEME OF THE
annual flagship event of The Entrepreneurship
Cell at IIT Bombay this year. Many of the busi-
nesses that have permanently altered the way
we look at the world today were started by
college kids who foresaw the future of tech-
nology and more importantly, acted upon
what they believed inGoogle, Facebook,
Apple, HP, Microsoft and Quorato name
a few. If they could see it, why cant we? This
sense of optimism is reflected in the theme
for the event. E-Summit is a unique initiative
in India that facilitates interaction between
students, professionals, investors and business
experts who share a passion for entrepreneur-
ship. It showcases the global trends in entre-
preneurship and provides a platform to learn
and simultaneously apply the skills required
for an entrepreneur. It also throws light on
the different actionable outcomes and what
generates progress for an entrepreneur in the
making. The two-day event will have work-
shops that aim to provide opportunities to
learn and simultaneously apply various entre-
preneurial skills. Globally successful speakers
from various domains in the entrepreneur-
ial ecosystem will share their life experiences
and views about relevant topics, competitions,
expos and mentoring sessions at the event.
The Coalition: TC/1, TC/fuel and TC/ignite
The Entrepreneurship Summit
The Companies Act has
made it mandatory for
companies of certain
categories to incorpo-
rate CSR policies like
spending two percent
of the three-year aver-
age annual prot.
The eligible compa-
nies are expected to
start reporting from
FY 2014-2015. Hence, if
the companies were to
initiate CSR activities
on ground, it becomes
imperative to consti-
tute a CSR commit-
tee, develop the policy,
identify the activities,
allocate funds and get it
approved by the board.
The challenge therefore
is to not just develop
a broad-based policy
but strategize and
plan specic activities,
execution modalities
(direct implementa-
tion or via partners),
implementation sched-
ule and fund allocation.
Responding to requests
from member compa-
nies, CII in collabora-
tion with CSO Partners
is organizing a one-day
workshop on developing
right CSR Policy for the
business. Upon comple-
tion of the workshop, it
claims the participants
will be equipped with
skills and tools to reect
on the companys exist-
ing social quotient, map
the stakeholders expec-
tations, formulate and
validate CSR policy and
carry out a few other
functions core to the
CSR policy.
Date: Feb 07, 2014
Venue: Hilton, Chennai,India
Contact: mathew.john@cii.in
WORKSHOP ON DE-
VELOPING CSR POLICY
Date:
March 14-16, 2014
Venue:
Buddh International Circuit, Delhi NCR
Contact:
thecoalition.in/tc1/apply-now/
Date: February 3-4, 2014
Venue: IIT Bombay
Contact: ecell.in/esummit/
www.entrepreneurindia.in RESOURCES
Q: I started a business in the solar energy space in 2007. It
has seen good growth over the last couple of years. Now I
am finding it difficult to keep pace with the new technologi-
cal advancements in the industry. I have been toying with
the idea of hiring a COO but I am not sure if my company
is ready yet. Please guide me.
- Virendra Saxena
A. If, as the CEO or Founder, you are spending more than
20-25 percent of your time on the day-to-day operations
of the organization, it is a telling sign that you must bring
operational managers or leaders into the organization.
The level at which you want to make this hire depends
on many factors such as:
What is the complexity of your day-to-day operations?
What size and level do you see your company grow at
five years from now?
What skills are you currently lacking in, and what gap
needs to be filled by the new hire?
One of the options for companies in the early growth stage
is also to look at hiring high-potential operational talent
with mid-managerial experience who can grow along with
the company and potentially assume a leadership position
such as a COO or VP in the future.
Answer by: Tejasvita Rao, Senior Manager, Friends of
Ambition
Q. I started a venture in September 2013 which deals with
recruitment in skilled trades such as mechanics, electri-
cians, etcboth experienced and freshers. It provides
features like online interviews for campus placements,
creating and conducting employability assessment
test, etc. So far I have received good response from
skill development institutes. Can you guide me on how
to extend my reach to more employers and companies,
apart from email campaigns? How can I attract experience
skilled trade manpower? How do I advertise my venture
on a limited budget?
-Nitiin Sagar
A. A good way to draw the attention of business custom-
ers is to use testimonials. Are you using testimonials from
satisfied clients demonstrating the benefits they have
received through your service in your email campaigns?
Also, how well do you know your happy clients and the
reasons for their happiness. Happy clients usually agree
to provide direct referrals. Request them for it. It is doubt-
ful that employers will respond well to a generic mass
e-mail. Instead, think of how you can create a compelling
reason for them to do that. Lastly, focus on converting
a few clients, making them happy and creating positive
feedback, rather than reaching out to many and clogging
your business development pipeline.
Answer by: Ravi Kiran, Co-Founder, Friends of Ambition
Q. My friend and I recently started a company which gives
home delivery service of a food product in Ranchi. The
product can cater to customers across the country and I
have been contemplating reaching out to investors. We
dont have a team or enough funds to attract the best minds
to us. The concept is new and I am worried about exposing
the idea to people since I want to patent it. What do I do?
Do Angel investors only mentor or will they help further?
-Rajendra Kumar
A. The dilemma that you are facing is a common one for
Running a business is not a cakewalk. At every stage, one can be inundated with
problems ranging from regulatory to operational, taxation to HR. If you have any
queries on running a business in India, write in to us at
editor@entrepreneurindia.in and our experts will answer your queries
Use testimonials to
draw customers
ASK ENTREPRENEUR
most aspiring entrepreneurshow do you reveal just
enough in order to get a buy-in from potential partners
and investors, while also ensuring that your idea doesnt
run the risk of being stolen or copied? Yes, patenting the
idea is an option. However, someone who intends to steal
your idea will go ahead and do so anyway.
The truth is that if you dont share, you wont sell. Your
fear of copycats will never allow you to get started. Of
course, you must talk to only those you trust as partners
and investors. Angel investors do help and mentor innova-
tive entrepreneurs in developing their business plans, and
making them stronger.If someone else comes up with the
same or a similar business model, you will just have to take
it with a handful of salt and make your offering better or
work towards creating another new innovative product.
Ambition
Q. My family is in the jewelry business and I now wish to
explore the online medium. How can I test my model before
I start online business operations in full scale?
-Mansukhlal Kedia
A. Facebook is a great platform to incubate a business
model like yours. It helps in two areas which are critical
for the success of an e-commerce business model:
Customer understandingYou can get very useful
insights on customer preferences in terms of designs,
price points and spending occasions
Initial brand buildingYou can get the initial traction
towards your brand through Facebook at a very mini-
mal cost. Since the audience is already on the platform,
reaching out to your target group and building the mini-
mum momentum required for full-scale operations is
relatively easy
However, do remember that social media platforms are
powerful. Both negative and positive feedback spread very
fast. So you must ensure that you pay special attention to
the quality and delivery aspects of your business.
Ambition
Disclaimer: All answers have been provided on best efforts
basis, without any prejudice and based on limited informa-
tion provided by the readers. Neither the organizations involved
[Network 18, Entrepreneur and Friends of Ambition] nor their
employees, allies, and associates take any responsibilitylegal,
financial or otherwisearising out of application of advice
given herein
Entindia Entrepreneur4in
Join the Community
INDIAS NO.1 MAGAZINE FOR BUSINESS OWNERS
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WITH
GROWTH
INSIGHTS www.entrepreneurindia.in
IT TAKES MANY DIFFERENT
types of CEOs and top managers
to lead Virgins 50,000 employ-
ees and keep our businesses fun,
purposeful and profitable.
We find great leaders every-
where: Working hard inside our
company, executing entrepreneur-
ial changes in large corporations,
and even selling auto supplies
from the backs of their cars. The
exciting part is letting them shine
in leadership roles.
CHALLENGE THEM
The long process of building up
your companys bench strength
starts with the daily practice of
letting employees take on chal-
lenging responsibilities beyond
their current roles. All you have to
do is listen to their ideas and give
them the power to make the best
ones a reality. Building their skills
is essential to your companys
long-term success.
Following on this principle, we
promote from within as much as
possibletheres no better way
to learn whether someone has
passion and determination than
by working with him or her every
day. Jayne-Anne Gadhias career
with us is a great example of how
this can work. In 1995, she was a
crucial member of the team that
launched Virgin Direct, and then
she helped with the launch of an
all-in-one banking product, the
Virgin One account. Virgin One
was so successful that three years
later, the Royal Bank of Scotland
bought the remaining 50 percent
of the business that it didnt already
own for 100 million pounds.
When we started looking for
someone to take Virgin Moneys
top job in 2007, we already knew
Jayne-Anne well and so she was
one of the first people who came
to mind. She went on to lead
our purchase of the failed bank
Northern Rock in 2011, where she
introduced community-friendly
approaches that have gained the
publics trust: Virgin Money is now
Britains third-largest net lender
responsible for more than three
million customers.
In contrast to Jayne-Annes
deep background in her field, some
startup founders have joined the
Virgin Group with little more than
their energy, passion and single-
minded focusall essential for
growing an idea into a company
and for attracting and retaining
partners and employees.
FOCUS ON SUCCESS
When we met Billy Levy and Zack
Zeldin, we learned that theyd been
friends in college at the University
of Florida, and had started their
first business together, selling
Freon to auto shops. Their true
passion was playing video games,
and as gamers they knew that
people were eager to compete
for cash and prizes. They started
up WorldGaming.com, which we
bought in 2010.
Virgin Gaming has since part-
nered with interactive entertain-
ment companies to integrate our
technology into popular games
available on the Playstation and
Xbox. So far, our gamers have won
more than $45 million. What made
Billy and Zack, now respectively
the vice president and president of
Virgin Gaming, stand out? Their
pitch was inspiring and we realized
that they would be able to generate
excitement among employees on
a daily basis. They had something
that worked in the past for Virgin:
youthful inexperience, offset by a
relentless focus on success.
EMPOWERING DECISIONS
Some of our other CEOs used to
work for larger competitors. When
making such hires, what we look
for above all is whether a person
listens to employees. You can tell
that a leader is open to change
when their employees feel empow-
ered to make decisions that can
become the norm. David Cush was
an executive at American Airlines
for more than 22 years before
joining Virgin America. Recently,
David joined an open session where
teammates brainstormed improve-
ments to the staff travel policy. He
made sure that the groups best
suggestion was implemented.
Davids leadership has turned the
first US domestic airline to start up
after 9/11 into an award-winning,
profitable business. We look for
passion, determination and quite
a bit moreit all depends on what
the business requires. The lead-
ers we find, share the same entre-
preneurial spirit and focus on
customer service that are part of
Virgins DNA.
Growing Your Business
Paying a little heed to the ideas of your employees works
BRANSON SPEAK
RICHARD BRANSON
Founder of the Virgin Group
Building
employee
skills is
essential to
your compa-
nys long-
term success.
INSIGHTS
WE ARE AT THE CUSP BETWEEN
two governments, where we
can only speculate about policy
changes. The old UPA government
will bow out of office in May and
a new one will be installed soon
after. From all current indications
of public mood, it seems like the
Congresss hold on power will end,
and the next coalition govern-
ment will probably be headed by
the BJPthough we do not know
if it will be with Narendra Modi as
prime minister or someone else, in
case the BJP does not have enough
seats in the next Lok Sabha. A seat
count of 200-plus will ensure
Modi as PM; anything below will
make it difficult for him. Anything
below 170 could bring in a Third
Front government and a fair
amount of uncertainty.
The public mood is not fixed. In
fact, it is changing every month,
not least because of the rise of the
Aam Aadmi Party (AAP), which
is expected to dampen the BJPs
victory march substantially. The
rise of AAP is a direct threat to
Modi, for both feed off the same
constituencythe middle classes
of urban India. But given the way
AAP has been squandering its
public goodwill by mindless public
protests and doses of vigilantism
in the capital, one can presume
that its spread will be less than
we think.
In other words, there is an
above 50 percent chance of a
Modi-led government as at the
end of January.
MODIS VISION STATEMENT
This is a good enough reason
to speculate on what Modis
economic policies will be, who his
key policy advisors will be, and
which sectors or companies will
benefit from Modinomics.
Modis initial vision statement
made at the partys last national
executive meeting on January
19, has been skimpy on detail and
focused on the big picture.
The big picture on Modinomics
is that his government will be
less enthusiastic about doles,
and more interested in growth
and investment.
Though he did talk about offer-
ing reliefs in income-tax to the
middle class, jobs to at least one
member in each family, some
kind of universal healthcare, and
price stabilization sops to farmers,
these promises are vague enough
to mean nothing and everything.
Chances are the costs of these
promises can be kept pretty low.
The big ideas that are right up
Modis street, and hence more
likely to be implemented if he
comes to power, relate to reviv-
ing investment in manufacturing,
infrastructure, and urban areas.
While his talk of creat-
ing 100 new cities and bullet
trains to all major metros needs
to be discountedthey could
happen, but will take at least a
decade to materialize. The point
is clear: his administration will
be about reviving investment to
revive growth.
If the theme song of the UPA
government has been to redis-
tribute taxpayer revenues in
favor of the poor and the alleged
poor, the motto of a Modi govern-
ment will be to drive investment
into factories and urban agglom-
erations through public-private
partnerships and business-
friendly policies.
His stint in Gujarat provides us
ample reason to believe this is the
way he will go.
WISE MEN
Who will be his key advisors?
On the international plane,
professors Jagdish Bhagwati,
a free trade champion, and
Arvind Panagariya, of Columbia
University have been early cham-
pions of Modis Gujarat model of
development. They could play
a big advisory role in any new
Modi government.
Bibek Debroy, another free-
market economist who has written
a book on the Gujarat economy,
may also be involved in some
aspects of policy-making under
a new government. Surjit Bhalla,
Chairman of Oxus Investments,
has been busy rubbishing the
UPAs economics and also the
AAPs rise, and he too could be
Who Will Benefit from
Modinomics?
Major sectors in the economy will, if the BJP comes to power
NEW THINK
R JAGANNATHAN
Editor-in-Chief, Web & Publishing, Network18
The big
picture on
Modinomics
is that his
government
will be less
enthusiastic
about doles,
and more
interested in
growth and
investment.
www.entrepreneurindia.in www.entrepreneurindia.in
someone Modis ministers will
listen to.
Piyush Goyal, the articulate
national treasurer of the BJP and
a key stakeholder in the partys
economic policy evolution, is
expected to have a ministerial
role in a Modi administration.
Among old-timers, one cannot
rule out the return of Arun
Shourie, the telecom minister
under Atal Behari Vajpayee, to
the cabinet or in some critical
think-tank role. Shourie, who
has resurfaced recently in the
public domain, has been talk-
ing positively about Modi and
thus could be a key person to
watch after May. His views are
also largely free market liberal-
ism. Under Vajpayee, he became
the only Indian minister to actu-
ally privatize any public sector
enterprise ever.
THE BENEFICIARIES
Assuming all this comes to be, and
all the people who now support
Modinomics come to play a part
in the next administrationwho
will benefit from it all? Which
sectors, which businesses?
Modis known interest in
technology (IT and telecom)
means that he will do noth-
ing to harm these golden geese.
But the sectors that will bene-
fit most from his basic growth
orientation are manufacturing
and infrastructure.
Gujarat is a major player in textiles,
and so one can be sure this indus-
try will take off verticallyespe-
cially since India plays host to the
entire value chain from cotton
to yarn to cloth to garments.
Indias textiles industry is on the
cusp of major glory and a Modi
rise could just trigger this off.
Gujarat is also Indias largest oil
refining state and a positive shift
towards oil price deregulation
the single biggest cause of UPAs
fiscal deficitswill benefit the
public sector and private sector oil
sector everywhere.
Infrastructure has been virtu-
ally a no-show under UPA-2 and
this sector could be the single
largest beneficiary from Modis
expected stimulus for infra-
structure and urban growth. It is
worth recalling that infrastruc-
ture investment took off after
Vajpayee kicked off his Golden
Quadrilateral road-building
program. It has helped revive
growth and jobsthough the big
benefits came later under UPA,
when the global economic boom
sent growth rates to 9 percent
or more.
An infrastructure boom will
impact not only the construc-
tion, real estate and infrastruc-
ture companies, but also cement
and steel.
And when there is a pros-
pect of these sectors reviving,
the banking sector will be the
biggest gainer. A key reason why
the Sensex is still dilly-dallying
around the 21,000-plus mark (as
of late January, when this was
written) is because the banking
sector has loads of bad loans
most of it from these sectors. A
infra boom will impact banking
stocks as it will make many bad
loans less bad or even good. If
banking revives, the markets will
be over the moon. Banking stocks
are really a play on the economy.
It is thus a safe bet that compa-
nies in these sectors will be the
first to experience a tailwind if
the new government is headed by
Modi or even the BJP.
THE MODI-EFFECT
Modinomics will have a broad
and sweeping impact on several
sectors for the simple reason
that it focuses on revving up
the growth engines by boosting
investment.
If the Congress-led UPA
revved up the consumption
economy (that is, the demand
side of the economy) by empha-
sizing doles and subsidies, the
Modi economy will pep up the
supply side by oiling the rusty
investment engine.
This shift in emphasis is criti-
cal for an economic revival, and
this is why Modinomicsregard-
less of whether you like the BJP
or notmight work better than
Sonianomics at this stage.
Infrastructure
has been
virtually a
no-show
under UPA-2
and this sector
could be the
single larg-
est beneficiary
from Modis
expected stim-
ulus for infra-
structure and
urban growth.
From easy-to-implement growth strategies
to insights from leading entrepreneurs, its
all there in our website. So just log on to
www.entrepreneurindia.in to nd out all the
ways and means to grow your business the
way youve always wanted.
INSIGHTS
LANT PRITCHETT OF THE
Harvard Kennedy School makes
an important distinction between
the Accounting of Accountability
(Did you mindlessly follow
procedures, rules and check-
lists?) versus the Account of
Accountability (Did you do the
right thing?). His distinction is a
subtle but sharp caution against
confusing what you say with what
you actually do.
I would like to make the case
that his warning is important
to remember when you hear a
company talk too much about
social impact, corporate gover-
nance, market capitalization and
green jobs.
Companies that talk too much
about their social impact or their
status as a social enterprise are
often trying to divert attention
from their products (fast food and
cigarette companies), their lack of
scalability (We are small because
we do good), or their unsus-
tainability (We dont meet our
costs because we do good). Any
company that legally and ethically
creates jobs is a social enterprise.
Enough said.
MAKING A BIG DEAL
The theoretical checklist of corpo-
rate governance (separate jobs of
CEOs and Board Chairs, percent-
age of independent directors,
experience of board audit commit-
tees, no non-voting shares or extra
voting rights, etc) has a weak corre-
lation with market capitalization,
profitability or endurance. Enron
and Satyam were the poster
boys of checklist corporate
governance compliance.
Corporate governance is more
art than science and the compa-
nies that get the balance right are
usually not the ones that make a
big deal about it.
Talking too much about green
jobs is another red flag. India has
the largest number of green jobs
in the world because poverty and
agriculture are very green jobs.
Jobs in green technology are too
small to matter.
The companies that position
sustainability and green as distinct
from efficiency and long-term self-
interest are being unfair. Of course
there are people who believe that
civilization is not green; cars,
manufacturing, and much else
is not green. But this is a luxury
good at a higher level of income
and unrealistic at Indias stage
of income. If we have to choose
between reducing poverty and
being green, we must choose
poverty till technology makes this
trade-off moot. But five star hotels
that market and flaunt their green
credentials do not pass the smell
test of credulity, common sense
and proportion.
TRUE VALUE
The final red flag is compa-
nies that obsess about market
capitalization. Nobody knows
whether the quip that in the short
run public markets are voting
machines but in the long run they
are weighing machines is true.
But it is clear that the valuation
of a company depends on many
variables beyond the companys
control. It is possible to game the
weather of the moment in stock
marketshuman beings are
famous for following the warmth
at the centre of the herdbut this
is not sustainable.
Enduring shareholder perfor-
mance is a consequence of satisfied
customers, talented employees,
brands, self-healing cultures, and
prudent financial management.
The true value of a company does
not show up in financial engi-
neering. Globally, companies
have bought back $3 trillion in
shares over the last decade but
most people will agree that this
has not made the outlook for most
of these companies healthier;
in fact they may symbolize the
lack of imagination, gumption
and opportunities.

INDIRECT CONSTRUCT
The wonderful book Ubiquity by
John Kay makes the important
point that the most important
thingsjust like happinessare
not acquired by directly targeting
them but by doing things that indi-
rectly construct them. This applies
to social impact, corporate gover-
nance, environmental sustain-
ability and market capitalization
because they are multi-dimen-
sional objectives that are pursued
over time.
Walk v/s Talk
Be alert when companies talk a lot about social
impact, corporate governance and green jobs
LOOKING BACK
MANISH SABHARWAL
Chairman, Teamlease Services
India has
the largest
number of
green jobs
in the world
because
poverty and
agricul-
ture are very
green jobs.
2013 India
Media partners:
Founded and produced by

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s

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s
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v
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Amit Bakshi
Eris Lifesciences
Ajay Bijli
PVR
Purushottam
B. Agrawal
Ajanta Pharma
Vishwavir Ahuja
The Ratnakar Bank
Qimat Rai Gupta
Havells India
Sandeep P. Engineer
Astral Poly Technik
Yogesh Mahansaria
Alliance Tire Group
Rajju Devidas
Shroff
UPL (formerly United
Phosphorus)
Ravi Menon
Sobha Developers
Chandubhai
P. Virani
Balaji Wafers
V.S.S. Mani
Just Dial
Rizwan Koita
CitiusTech
Tech Mahindra
C.P. Gurnani | Vineet Nayyar Ramesh Iyer
Mahindra & Mahindra
Financial Services
Kailash Katkar
Quick Heal
Technologies
Uday S. Kotak
Kotak Mahindra
Bank
Innovative game changers
Saluting the truly inspirational entrepreneurs, who
have been at the forefront of transformational change
with their bold vision and innovative business models.
Read their outstanding entrepreneurial stories on
www.ey.com/in/eoy
Celebratory Awards banquet
on 20 February 2014
Entry by invitation only
F
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3
INSIGHTS
IT TOOK ME A FAIR BIT OF effort
to attempt this article. First of all,
understanding Bitcoins was not
an easy task. Secondly, trying to
find lessons for entrepreneurs
via a concept was something I
had not attempted before. But I
guess you know entrepreneurs by
nowthey always do things they
are not sure of completely.
Amongst the voluminous
explanations of Bitcoins on
the web, I came across a very
nice, concise series of videos
explaining Bitcoins on the Khan
Academy website.
In one of the videos the narra-
tor says, For a while, suspend
belief while trying to understand
the concept of Bitcoins
That was the Archimedes
moment for me! I knew there was a
holy, unspoken, secret connection
between Bitcoins and entrepre-
neurs when I heard this statement.
I also knew it was my job to try and
bring the equation to light.
WHAT ARE BITCOINS?
Simply put, Bitcoin is a virtual
currency for people like you and
me to do business with each other.
Now lets assume that you want to
hire me to write an article on the
sorry state of Indian Politics. You
want to publish this article anon-
ymously on the internet to high-
light the plight of our nation and to
inspire Indians to vote and effect
a change. You don't really want to
tell people that you are contract-
ing out a rather controversial
article. Also, I may not want to be
publicly associated with a strongly
biased article. But we both want to
do business. Bitcoins then come to
the rescue!
You offer to pay me for my
services via Bitcoins and I accept
to receive the same. Why, you may
ask? Because Bitcoins are anony-
mous and not traceable by anyone.
They are the perfect way for
people to do business with each
other without revealing identities.
They dont leave any digital foot-
prints like credit cards records,
bank transactions, etc.
We agree and you send me
Bitcoins in advance to pay me.
Lets set the price at two Bitcoins
for my work. While writing this
article, the current rate is about
US $800 per Bitcoin. So, you are
paying me about US $1600 for
my article.
IS THAT IT?
Not really. That's where the genius
of Bitcoins comes in.
To verify that you actually
own these two Bitcoins youve
promised to give me, we both
need to invoke the Bitcoin system
to undergo an elaborate verifica-
tion process.
This involves the entire
community of Bitcoiners (also
known as miners) who will go
through complex coded algo-
rithms and programs to check that
the two Bitcoins you possess really
exist and that they can be trans-
ferred to me.
The miners will be paid a fee for
their service and will also earn
Bitcoins as a reward for executing
these complex calculations.
Now, if you are imagining long
haired, unshaven, zombie-like
people with 30 inch glasses, chew-
ing pencils, eating from plastic
plates while executing this verifi-
cation process; you are mistaken.
All that the miners actually do
is stack up computers in loca-
tions with cheap electricity and
cool weather to perform these
calculations. It is machine-meets-
machine; man simply watches.
FIXED NUMBER
The genius of Bitcoins is that only
21 million Bitcoins will ever be
made available to mankind via
this machine-driven verification
process that becomes harder or
easier, depending on how many
Bitcoin transactions (like the one
between us) are being verified by
the miners.
Each year, the miners
reward (in Bitcoins) reduces,
so that eventually the 21 million
mark is reached and there are
no more Bitcoins to be issued.
Hence, Bitcoins, their issue
and their maximum circulation
have been predetermined from
the beginning.
So why will miners keep work-
ing after this?
For fees that will then grow
more valuable. I hope this explains
the concept. Here are some lessons
for entrepreneurs:
Decoding Bitcoins
Lessons for entrepreneurs from this new currency
THINKING & DOING
ALOK KEJRIWAL
Digital entrepreneur, blogs at http://therodinhoods.com
Bitcoins are
anonymous
and not
traceable
by anyone.
They are the
perfect way
for people to
do business
with each
other without
revealing
identities.
www.entrepreneurindia.in www.entrepreneurindia.in
Bitcoins
secret inven-
tor (pseud-
onym Satoshi
Nakamoto)
had the fore-
sight to ensure
that Bitcoins
appreciate
in value ever
since they
were invented
in 2009.
1. BITCOINS COME PREDETER-
MINED WITH APPRECIATION
Think about me for a minute.
After receiving your two Bitcoins
what would I do with them?
All that depends on my
perception of the future value
of Bitcoins. Its like you receiv-
ing an MF Husain painting as
part of an inheritance from your
rich mamaji from Indore. What
would you do? Sell the Husain
and deposit the money in some
fancy bank to earn measly inter-
est? Or keep the Husain safe and
sound and watch its value appre-
ciate year after year?
Bitcoins secret inventor
(pseudonym Satoshi Nakamoto)
had the foresight to ensure that
Bitcoins appreciate in value ever
since they were invented in 2009.
The price as late as in 2011 was US
$1 for one Bitcoin which in 2013
jumped to over US $1000.
Does this smell like a bubble
or a scam? Are you think-
ing of Madoff or XNet or YNet
when you read this unrealistic
price movement?
My argument is that no one
really knows what real value
Bitcoins will settle at, but the
genius of capping the amount of
Bitcoins that will ever be available
is commendable.
When was the last time you
did a business or service that
was limited and restricted in
supply? Only a great artist like
Husain comes to my mind who
purposely restrained himself
to create value and wealth that
would increase with scarcity not
with abundance.
Lesson: If you are running
a business that is selling
perceived value of the future,
learn how Bitcoins created
phenomenal value even before
it began. Sometimes, less is
really more.
2. EMPLOYMENT VIA WEALTH
NOT CASH
Imagine if Bitcoins were really
a large bank. The images that
come to mind are fancy offices
with hundreds of suited-booted
people, swishing glass doors and
transparent conference rooms.
You dont need to be a marwari
munim to understand that all
these things cost money, and
money is the one commodity
that's not available!
Bitcoin Bank would have failed
even before it started because its
impossible nowadays to sustain
costly operations that may
become valuable in the future.
Could Employee Stock Ownership
Plans (ESOPs) have made these
people work for the bank for free?
I doubt it.
By letting miners (you could
become one right now by ditching
this article and hitting Google),
earn Bitcoins for the effort they
expend in verifying the transac-
tions, the business has achieved
the impossible.
It has made thousands of
highly intelligent people invest
their time and resources into it for
free, and has rewarded them in a
constantly appreciating currency
that makes them work harder and
faster without spending any cash.
It has traded massive rewards
for massive effort only on the
basis of faith.
Lesson: If you are going to do
a business that requires enor-
mous employment, work out a
Bitcoins logic of sharing some-
thing that will be perceived as
wealth and demonstrate its
value as fast as you can. Hint: if
you dole out ESOPs, prove their
real value via some means, as
fast as you can.
3. BE A CAVEMAN THAT HACKS
THE HIGGS BOSON
Be as naive as you can while
trying to solve the most complex
problem in the world.
The founder of Bitcoin (who
we know is a genius) cultivated
raw naivety in himself and
must have pondered, How can
I make a frictionless, easy-to-
use, unregulated currency for
the world?
This led to the ingenious inven-
tion of Bitcoins Think who would
have ever asked that question as
late as in 2009?
So, as an entrepreneur you
may think that you are the clever-
est human on earth; but are you
as naive as the caveman of yore
to ask the most unassuming ques-
tions that no one would ever care
to dream about?
Lesson: Cultivate being naive.
It will be the cleverest thing
you would have done.
EVERY ONCE IN A WHILE IN
business you will face a new and
surprising situation. If you are like
most business leaders, your first
response would be to dig into your
past and check if you have ever
faced a similar situation. If you
havent, you will have to figure out
some way to handle the situation
and often, quite quickly. Most situ-
ations have more than one possi-
ble solution and your decision will
need to be thought through.
Many conventionally trained
managers and business owners hit
a roadblock here, as the newness
of the situation and the ambi-
guity bothers and stops them in
their tracks. It would be logical to
consult a few people, to see if their
past posed a similar challenge.
But in my experience, in the real
world, most senior managers and
business owners are quite proud
of their success, ability and knowl-
edge, and find it difficult to ask.
The feudalistic structure in Indian
organizations gets employees to
assume that the boss-knows-it-
all and that makes it even more
difficult for the business leader to
admit his ignorance.
LEARNING FROM EXPERIENCE
The leadership trait that comes
handy in these situations is called
Learning Agility, popularized in
the West by leadership coaching
company Lominger (now part of
Korn/Ferry) and defined by them
as the willingness and ability to
learn from experience, and apply
that learning to perform success-
fully under new or first-time
conditions. At first glance, this
does not appear to be such a big
deal. After all, who would be not
willing to learn from experience?
In reality though, more often
than not, our formal education,
accumulated baggage of knowl-
edge, a sense of what is the right
way, and counter-intuitively, our
intuition, come in the way of devel-
oping and applying our learning
agility. The reasons why Western
businesses are seized with this
concept may be different from
ours, but the issue is no smaller
here. I find owners of many mid-
sized businesses make simple
but avoidable mistakes and quite
often repeatedly, just because
they havent allowed themselves
to develop this trait.
DEVELOPING A NEW CULTURE
Unlike in the West where learn-
ing agility is referred to primar-
ily in the context of the individual
manager and the leader, in India
we need to think of it in the
broader context of our organiza-
tion and its culture.
Since they have had to fight
to survive every day in the face
of adverse regulatory and the
general business environment,
our entrepreneurs and managers
have in the past developed adapt-
ability and flexibility, which is a
good thing.
But as a business grows beyond
its early stages, its no longer
enough to have a few people
quite often at the top have this
important ability.
How do you create a culture
that encourages employees to be
experimentative, to learn as they
go and to figure things out on the
fly? Also, how does one employees
experience of dealing with ambi-
guity and complexity help the
organization? How do employees
learn how to provoke themselves,
to be in a state of constant curios-
ity without feeling insecure? They
say that the most innovative solu-
tions are a result of someones
attempt to overcome our inade-
quacies. Are we willing to admit
our inadequacies first?
Naturally, as always, real
organizational transformation
starts with you as its leader and
your A Team. How often are you
willing to admit that there are
things you dont know, that seek-
ing and giving feedback does not
make you small, that authentic-
ity and honesty are very powerful
leadership and organizational
tools when it comes to assessing
your strengths?
In the previous issue, I
spoke about fragility in busi-
ness as inevitable in the VUCA
Volatile, Uncertain, Complex,
Ambiguousworld and intro-
duced agility as an essential
strength to confront fragility.
Learning agility lies at the core
of your business. And it starts with
the recognition that we dont know
most of what we need to know.
Dont Know
How often are we willing to admit to that?
GROWTH MANTRA
RAVI KIRAN
Co-founder and Managing partner, Friends of Ambition,
the business growth platform for Middle India
They say
most innova-
tive solutions
are a result
of someones
attempt to
overcome our
inadequacies.
I WAS WITNESS TO A VERY
absorbing round table discus-
sion amongst some of the bright-
est young producers/directors of
Bollywood. While the subjects
of the conversation were varied,
common across them was: the
streak of entrepreneurship, the
on-job learning they got from new
and old directors and the traits of
leadership they learnt on produc-
tion sets. From amongst multiple
relative linkages to general entre-
preneurship, some of the strik-
ing ones with their relevance and
contextualization to a budding
entrepreneur, are as follows:
Directors are the best actors
on the sets: Besides managing
production on the set and dealing
with hard-nosed superstars (and
their managers), other artistes
(and their coordinators), cine-
matographers, producers, etc.,
the director has to often play the
role of a super-actor himself, at
times almost becoming a posi-
tive manipulator. All this, with
an end-goal in mindto complete
the movie within a timeline,
budget and quality and to make it
into a success.
It is akin to an entrepreneur
managing his movie (venture)
and his star cast (team). The subtle
difference here being the extent
to which a leader needs to act,
i.e. openly share issues with the
team or keep the team away from
them depends on the maturity and
profile of the team.
To first visualize and write the
the last scene of a movie:
One of the directors described it
as the best tip he ever got from
his mentor, i.e. if you can visu-
alize and correctly describe the
concluding act of the movie, most
of the other acts would flow natu-
rally and with ease. They shared
their nervousness citing instances
where the end-point was not clear
at the start.
Paraphrasing it for the new
venture of an entrepreneur, this
translates into defining your
vision as the eventual goalpost (or
raison dtre for your venture), and
articulating the smaller action
points leading up to the achieve-
ment of the mission and vision.
If the end-point is crystal clear,
searching and pursuing the path
to reach it can only be smoother.
The debate on the `100-plus
crore movie club is relevant
and irrelevant at the same
time: As a layman reading half-
baked movie industry write-
ups, an ordinary moviegoer
tends to presuppose that joining
the `100-plus crore movie club
must be the aspiration of every
producer-director.
The round table discussion
added a logical perspective to this
media-created myth. The panel
clarified that they would approach
a movie just like a businessman or
an industry pursues its business
projects i.e. focus on the extent
of resources that are deployed
and the return generated on the
invested resources.
There was a rational point of
view that an absolute number
means nothing, unless seen in
the context of resources. Does it
not sound familiar like Return on
Investment (ROE) and Return on
Capital Employed (ROCE)?
In terms of a business matrix for
entrepreneurs looking for exter-
nal capital, it has an important
takeaway. The investing frater-
nity is very frequently confronted
by capital-seeking entrepreneurs
with a question about scalability
and profitability, which is distinct
from the absolute size of business
and that of profit.
Just like the aura around a
`100-plus crore movie club, a
discussion around the absolute
size of revenue lacks a relevant
context and background.
A scaled-up business with a
high absolute size, but perpetual
single-digit ROE due to the inher-
ent nature of the business and
business model might earn high
absolute profits.
However, it might have a
limited appeal to investors who
are looking for high returns. On
the other hand, such a business
might elicit serious interest from
annuity-seeking insurance or
pension firms.
Hence, there are no straight-
jacketed answers for the right
size or business model, but the key
is to find like-minded investors
with aligned objectives.
Cross Connections
Lessons from the world of cinema for business
BANKANOMICS
BHARAT BANKA
Founding CEO of a leading Private Equity rm
If the end-
point is crys-
tal clear,
searching and
pursuing the
path to reach
it can only be
smoother.
INSIGHTS
I RECENTLY CHANCED UPON A
Huffington Post blog of December
2013 while surfing the net. What
caught my eye was the head-
line, Nelson Mandela Taught
Us the True Meaning of Social
Entrepreneurship. The piece
explained: social entrepreneur-
ship is about applying practical
and sustainable approaches to
benefit society in general, espe-
cially the poor and marginalized.
Was Mandela a social entre-
preneur himself? Absolutely.
Social entrepreneurs are heroic
troublemakers. They disrupt the
status quo and transform society,
promoting systemic social change.
In a country like India, social
entrepreneurship represents
the enhancement of democracy,
where despite the peoples repre-
sentatives at the helm of affairs,
its the entrepreneurs among them
who need to innovate for the larger
good. They also have the onerous
task of addressing pockets across
the country where the reach of
government policies is either
minimal or non-existent. What
the social entrepreneur brings to
the national table are user-friendly
ideaslocalized, implementable,
suitable to and viable for the set of
people he caters to. In the process,
he motivates the common citi-
zen to action. This makes him a
harbinger of change too.
Then there is the power of tech-
nology. What happened in the 90s
in the US is fast catching up in
India nowsocial entrepreneurs
in the country are gaining ground
with open, freely accessible, yet
commercially viable internet.
At the same time, devices have
provided these entrepreneurs a
fillip, both in terms of zeroing-in
upon beneficiaries and in catering
to their needs.
MODELS OF CHANGE
It is pertinent to point out that
social entrepreneurs in the coun-
try are steadily moving from just
lending their innovative zeal
for products suitable for low-
income markets to addressing
deeper needs of the country, such
as customizing opportunities
for companies to harness rural
human resources.
The models of change exem-
plify what social entrepreneur-
ship can do to add to government
developmental schemes. For India,
where the gap between the popu-
lation and jobs, socio-economic
divide and utilization of skills are
yet to be plugged, social entre-
preneurship is a step in the right
direction. Its a platform where the
skilled, semi-skilled and unskilled
can join hands to create and inno-
vate to serve society.
MONEY CONCERNS
There are the likes of NSEF, Dell
Social Innovation Challenge,
Ashoka, Unltd India, Sankalp
Forum and others who are will-
ing to put in money in initiatives
that aim to solve social problems
and improve lives. Yet, startups
aspiring for social entrepreneur-
ship wonder if it is possible to
profit while working for a social
cause. Experts say making money
and doing good is never the easiest
of things.
To my mind, the best and the
oldest successful example of
social entrepreneurship in India
is Amul. Established in 1946, it
was originally founded to combat
unfair milk trade practices across
India. It was built from strength-
to-strength, having consolidated
local and marginalized farmers
into co-operatives independent of
trade cartels.
It is a brand today known for its
excellent value-for-money prod-
ucts and an income generator for
local farmers.
COLLABORATION RULES
For about a decade now, social
entrepreneurship in India has
become a force to reckon with.
Understandably, what sets this
breed of people apart is their
ability to not only innovate and
re-engineer, but also transform
the lives of people.
However, for greater impact,
there needs to be greater collabo-
ration with others with the same
goals and, with the government
and the private sector, so as to
influence continual change they
are capable of, with progressive
policies and sectoral norms. And
there has to be sustainability and
relevance that these entrepre-
neurs must carefully focus upon.
Heroic Troublemakers
They bridge the gap between government policies
and their implementation
AJAIS TAKE
AJAI CHOWDHRY
Co-Founder, HCL
Its a platform
where the
skilled, semi-
skilled and
unskilled can
join hands to
create and
innovate to
serve society.
I USUALLY DO CLOSE TO A
hundred speaking engagements
a year in India and outside. About
60 percent of them are invitations
from platforms that aggregate
aspiring and practicing entre-
preneurs. About 15 percent are
from engineering and business
schools that have entrepreneur-
ial events. The balance 25 percent
are from corporates who want me
to address their potential leaders
to think entrepreneurially.
In the first two categories, I am
usually one of the speakers. Many
times I get the opportunity to
listen to others who speak before
and after me.
Some move me by the compel-
ling stories that they tell. Some
inspire me to go back to the draw-
ing board and tweak my business.
Some leave a lasting impression as
they speak from their heart.
I also hear people who speak
casually, sarcastically and pomp-
ously. I have seen entrepreneurs
and others in the ecosystem walk
into their session unprepared and
deliver a lecture sans strength,
substance and structure.
I have sat through presenta-
tions by entrepreneurs where
they trivialize their journey
by deadpanning and it makes
me disconcerted.
I prefer entrepreneurs who are
full of themselves and their great-
ness and how they did no wrong
because at least theirs is a story
with a positive impact.
THREE REASONS
The Goncourt brothersFrench
writersapparently said that the
pictures hanging in the gallery
hear the most idiotic things. I have
come to the conclusion that in
most entrepreneur-related events,
this is equally true. Either most
people spout the same old trite or
they are doomsayers or know-it-
alls. So I go back to the basics and
ask: Why are mentors, entrepre-
neurs, VCs, angels, teachers, apex
body members invited to speak by
startup communities, MBA and
engineering students?
To my mind there are only
three reasons for that. Oneto
learn from our experience (eg.
When you decided to quit a cushy
corporate job to become an entre-
preneur, were you not worried
about failure?). Twoto ask us
those questions that are bugging
them (my personal favorite is, I
have a business idea in my head,
how do I get VC funding for it?!)
Threeto be reassured that they
are not being stupid in deciding to
become an entrepreneur (eg. My
parents are very upset that I sat
out of college placements. I hope
I didnt make a mistake.)The
underlying expectation of all the
three reasons is for us to inspire
them through our speech.

DEBUNKING MYTHS
So when we accept the invitation to
speak, we should remember this,
that in sharing our experience,
debunking myths about the entre-
preneurial journey and reassuring
our young entrepreneurs that it
is indeed a wonderful decision to
embark on this pilgrimage, we are
actually inspiring them to become
game-changers.
That is what we are expected to
do and should do. Inspiring them
has nothing to do with speak-
ing Queens English or dropping
names of VCs from the Silicon
Valley or pretending to be on
the phone with Guy Kawasaki
or bandying about a check
from Warren Buffett. It has noth-
ing to do with being a suited-
booted angrez young turk on a
business channel.
Inspiring is a combination of
actions. You coax and cajole, you
admonish, you challenge, you
bemoan, you tease and you laugh.
Laugh at them, laugh at yourself
and laugh at the whole world.
Beat your chest. Throw a hissy
fit. Bring out the argumentative
Indian in them. Excite them. Make
them restless. Make them feel like
Prometheusthat they have it
in them to steal fire from the fire
gods for the good of humankind.
Make them feel like Superman
(with underwear inside of course!)
Make them believe that their exis-
tence is for the sole purpose of
becoming entrepreneurs.
That is when you justify their
faith in inviting you. Some day
they will thank you for not pissing
in the wind.
By Invitation
What makes a good speech is what the listeners
take away from it
WOMEN IN CONTROL
NANDINI VAIDYANATHAN
Teaches entrepreneurship, mentors entrepreneurs (www.carmaconnect.in)
and has authored the bestseller Entrepedia
I prefer entre-
preneurs who
are full of
themselves
and their
greatness
and how they
did no wrong
because at
least theirs is
a story with
a positive
impact.
IN CONVERSATION
What startups dont
do is figure out who the
end-customer is
Jeff Hoffman is an accomplished entrepreneur and innovator in the fields of internet, e-com-
merce and entertainment. He also works with the White House, the Executive Office of the
President of the US, the US State Department and the US Department of Commerce to support
business and economic growth initiatives all over the world. Hoffman is currently a founder
and partner in ColorJar, an idea accelerator company that helps entrepreneurs and small busi-
ness owners launch and grow new business ventures. He engages with Shonali Advani on the
softer aspects of running a startup. Edited excerpts:
JEFF HOFFMAN
Founder and Partner, ColorJar
Now more than ever,
many young people have
a social conscience. They
care about making the
world a better place. I
think thats great.
Q: In your recent talk at Infosys campus,
you spoke extensively on ethics and
business. What in your view, in the
current environment, is an ethical way
to do business?
A: Ethics is about always doing the
right thing. It means making long-term
decisions. Lets take an example. Say the
customer is mad about a wrong delivery
even though it was his mistake. Some
people would say, let us not return the
money because it was the customers
mistake. That is a short-term decision.
The long-term decision says that you
can have your money back because we
want you to be our customer.
A great example is Zappos (US-based
online shoe retailer). They do this
amazing thing. If you dont know what
your shoe size is, they will ship you two
pairs. Why? Because they trust you as
a customer. A lot of people said that
they would lose all these shoes because
people wont return them. But that did
not happen at all. What the customer
said was, Ethically I feel so honored
that you trust me. I will ship the shoes
back. So instead of the company say-
ing, I am going to charge you for two
and refund the money, they took the
approach of I trust you and I want you
to be happy. And their business won.
Q: But when you are growing your
company and chasing top-line growth,
how do you keep the balance between
ethics and business?
A: Thats a good question. You need
all the stakeholders to be in it for the
long haul. People have to say that, We
are okay that it is painful and more
expensive in the short-term for us
so that we can maintain best ethical
balance instead of just taking the next
dollar. The answer is to commit to the
long-term.
Q: You were talking about how suc-
cessful people are driven by a purpose
and it should not be about just creating
wealth. How would you define that
specifically for entrepreneurs?
A: Everyone has to find their own
purpose. There is nothing wrong in
creating wealth. But if you are creating
wealth for wealths sake, then let me tell
you that those are not the people that
achieved great things. The people I met
who achieved amazing things said that
they were trying to achieve some goals.
Sure, it takes money to do it. Money was
part of the formula for these people but
it was not the only thing driving them.
Entrepreneurs have to stop and dig
deep. Ask yourself what do you really
care about. Its an introspection that
entrepreneurs need to do.
29 29 Intelligent Entrepreneur February 2014 29
Q: Do you see a lot of entrepreneurs
chasing money these days?
A: I am glad you asked that. I have trav-
eled to many different countries and so
I have a sample size of sorts. Now more
than ever, many young people have
a social conscience. They care about
making the world a better place. I think
thats great. People my age never had
that conversation.
Q: So when the purpose is not wealth,
how does one measure success?
A: By giving value to stakeholders. Its
bigger than you think because with
most people this phrase relates to
investors and shareholders. But what
it actually means is that the existence
of the company creates some positive
return for everyone involved, which
does not have to be money. For instance,
employees should say that we are really
glad we work here. In my company, we
also measure ourselves on our citizen-
ship. We ask if our company was a
positive contributor to society.
Q: You also said leadership is an
inverted pyramid. This is an interesting
theory. How do you inculcate this in the
companies you are engaged with?
A: There are many models. Theres this
book about servant-leadership model
where you lead by serving others which
I believe is a strong way to lead. Ill
share a funny story. One day when I was
walking into my office, our administra-
tive assistant dropped a whole bunch
of papers. I was walking by and so I got
down to help. Somebody walked by and
said, Id like to meet your CEO. She
said, Well, hes under the desk clean-
ing up trash! The person visiting said,
Why would your CEO do that? And
my employee said, because none of us
are too good to not help another person.
The attitude became our corporate cul-
ture. Like if the CEO can pick up trash,
then you sure can. I started to learn
slowly that the more I served them,
the more they wanted to make things
better, performed better. We developed
loyalty by leading by example.
Q: Youve run many startups and are
now mentoring companies at ColorJar.
Have you come up with any key findings
on why startups fail?
A: There are some prevalent reasons
why startups fail. The first one is prox-
imity to customers. Entrepreneurs have
an idea, but what startups dont do is
figure out who the end-customer is and
involve him early on. A lot of times the
people in the company are not end-users
of the product and often get caught
up in their own idea. It is important to
engage with actual customers and not
listen to only your voice. Its later in the
process that when people dont buy the
product that entrepreneurs start to ask
all the questions. The second one is a
value equation. You need to produce
and deliver a product or service that
people need at a price point that the
world is willing to pay for. They dont
do that research until its too late. So
startups die because it is a product not
matched to a market or there is no value
equation to it.
Inheriting a business,
the MD of Jakson Power
Solutions outlines the
challenges and opportunities
he took to stay ahead of
the curve
SAMEER GUPTA
OLD CAST,
NEW
HUES

A
M
I
T

K
U
M
A
R
J
akson Power Solutions is as old as
India has been free from British rule.
My grandfather Jai Kishan Gupta set
it up initially as a trading house. The
name for the firm was given as Jakson
because my grandfather thought it
sounded right in terms of a British word
for a business! Much later, we entered
the power sector as a distributor for
electrical products.
The scope of our business widened in
1982, when we partnered with Kirloskar
Cummins and could procure engines
and other parts from them. For the first
time, we could assemble our own gener-
ator sets or gensets. In the late 1980s,
things took a sharp turn when consumers
had a wide choice for gensets due to
global competition.
Gaining wisdom
I stepped into the firm actively in 1989
after completing my Bachelors degree in
electronics. I started at the shop floor and
did a variety of tasks like helping in the
installation of gensets, drafting quota-
tions, managing inventory, etc. Though
we were a small company with revenues
POWER PACKED: Sameer Gupta
MY STORY
of about `15 crore, I soon realized that it
was time to reinvent ourselves.
With that plan in mind, I toured almost
all parts of the world that had genset
plants and got an insight into how other
companies were operating besides seeing
firsthand the next generation of technol-
ogy that was being used. I was thus in the
know of global standards and practices
in gensets.
Doing it different
Until 1991, we were merely a systems inte-
grator and would source all our raw mate-
rials from different vendors. I decided to
change that when I took over and decided
to manufacture all the components
in-house barring engines and alterna-
tors. This gave us a significant advantage
as we were able to control quality and cut
costs by about 15-20 percent on each of
the components. I wanted the company
to be a provider of complete solutions for
gensets. This meant the customer only
needed to tell us his requirements. From
manufacturing the genset to delivering to
installing and integrating it to the main
power line, we provided all the support
and services. To do this, we had to spruce
and invest a lot on design and engineer-
ing capabilities but it helped us achieve
our goal of becoming a one-stop shop for
the customer.
The silent era
Globally, all gensets operated silently
except Indian generators which, in addi-
tion to noise, also continued to emit a
lot of pollution. I realized the future
belonged to silent gensets and decided
to manufacture them. We had the first
product ready by 1998 and sold it to the
American School in Mumbai. As it was
around 50 percent more expensive than
a conventional generator, but we found
hardly any takers for it.
Things, however, changed rapidly in
2003, when the Central Pollution Control
Board (CPCB) came out with norms stat-
ing that till a particular rating, a genset
had to be silent. By then we already had
our products in the market that were
compliant with these norms and we thus
had a big first mover advantage.
Diversication, expansion
About two years back, we saw a big dip of
almost 10 percent in our revenues due to
the failing economy coupled with global
erosion in the gensets industry. Our top
line was affected by about `90 crore. I
realized we had to diversify if we wanted
to get back on the growth path. The
genset business is at best a `6,000 crore
market in India and it is clear that beyond
a point, we cannot grow in size.
Our strategy is to hold on to our market
share in the genset business, grow it by
nominal amounts every year and look for
opportunities in the power sector which
has a bigger market size. We decided to
get into solar power generation and the
idea was not to depend on only one line
of business.
Solar power, to our estimate, is a
`25,000-`30,000 crore business a year
and even if we have a much lesser share
in this market, we felt we could grow the
company much faster.
We decided to get into the fray as
an independent power producer and
in February 2012 commissioned a 20
MW solar park at a capex of `200 crore
in Rajasthan. We are very happy with
the outcome and should be announcing
another 10 MW soon. Our intention is to
get to 100 MW of solar generation in the
next three years.
We have also launched a solar inverter
substation in association with Schneider
Electric as a plug and play for EPC players
in this field and have come out with retail
products like solar generators and solar
water purifiers. I think both these prod-
ucts will find acceptance globally.
While diversification is beneficial, we
have not sidelined our core business. We
have set up an integrated manufactur-
ing plant in Daman for special enclosure
INDIAS POWER PRODUCTION
SECTOR % MW
State Sector (40.77) 86,343.35
Central Sector (29.73) 62,963.63
Private Sector (29.49) 62,459.24
TOTAL 2,11,766.22
INDIA POWER MIX:
FUEL % MW
Thermal (66.91) 141713.68
Coal (57.42) 121,610.88
Gas (8.92) 18,903.05
Oil (0.56) 1,199.75
Hydro (Renewable)
(18.61) 39,416.40
Nuclear (2.25) 4,780.00
RES** (MNRE)
(12.20) 25,856.14
TOTAL 2,11,766.22
Renewable Energy Sources(RES)
include SHP, BG, BP, U&I and Wind
Energy
SHP= Small Hydro Project ,
BG= Biomass Gasifier ,
BP= Biomass Power,
U & I=Urban & Industrial Waste Power
Our strategy is to hold
on to our market share
in the genset busi-
ness, grow it by nominal
amounts every year and
look for opportunities in
the power sector.
gensets for niche markets like defense,
etc. We hope to double our current reve-
nues of `1,350 crore in the next 3-4 years.
With installed capacity of about 15,000
gensets a year across our three plants, we
are prepared and set for the next five years
of growth.
(As told to Pranbihanga Borpuzari)
F
or generations now, rural
Assamese women have been
involved in the cottage industry
of weaving clothes for their fami-
lies and for subsistence. However, most
of them would give up working at the
age of 40 because of weakening eyesight.
Then, their daughters and daughters-in-
law would take over, recounts Dr. Parveez
Ubed, an ophthalmologist based in Assam.
Ubed, who belongs to the city of Jorhat
in Assam, noticed this trend while work-
ing in hospitals in the state after being
trained in ophthalmology at Guwahati
Medical College.
It was to this effect that in June 2011,
Ubed decided to set up ERC Eye Care, a
chain of rural eye-care centers in Assam,
not long after a stint at an NGO offer-
ing ophthalmology services. The NGOs
services were provided at a very low cost
or for free. The standard of services was
just about average but the patients werent
treated with dignity because they werent
paying much or none at all. They couldnt
ask any questions to the doctors and there
was no accountability, he says.
Though NGO-run hospitals conduct
camps in rural areas in Assam and the rest
of the North East, the long waiting period
coupled with the few camps that put off
patients. There were other problems too.
Eye treatments required patients to have
an attendant, which translated to high
costs of travel, food etc. This was prohib-
itive for patients, says Ubed. This is why
patients wouldnt come back to the cities
for follow-ups with the doctors.
Sabitri Puri is a case in point. The
24-year-old from Borholla village in the
district of Jorhat was given a prescrip-
tion for a new pair of glasses on account of
her change in vision and had to travel to
the city for it. We spent over a thousand
rupees on that trip. When I had to go back
to the city for my new glasses, I did not go
because of the expenses involved. Instead,
I stopped wearing glasses, she says. In
2013, the second ERC Eye Care center
came up in Borholla, a kilometer from her
house and Puri says that she was able to
get a check-up and get new spectacles.
Rural focus
With ERC, Ubed had the rural patient in
the crosshairs from the beginning. The
business model was to set up centers in
areas where accessibility and affordability
was a problem. At the same time, he did
not want ERC to be associated as an eye
hospital for the poor.
Ubed was confident that each of
the centers could break even quickly if
he managed to keep his costs low and
encourage people to understand the need
for quality eye care. The company oper-
ates on a hub-and-spoke model, which
is common in the case of the diagnostics
industry but has not yet been tried and
tested in the eye care space.
Only one other company, Gurgaon-
based venture Eye-Q set up by ophthal-
mologist Dr. Ajay Sharma and former
head of the surgical business at Bausch
& Lomb, Rajat Goel, follows this model
but it is mostly focused on North and
West India.
Saurabh Lahoti, Director, Finance
Services India at social innovation accel-
erator and fund Ennovent says that the
eye care industry is capex heavy but ERC
has managed to create a model where
the investment required is reduced. He
points out that an ophthalmologist is an
Visi n
An ophthalmologist brings dedicated, private eye care services to Indias rural Northeast
SHRUTI CHAKRABORTY
32
We are looking to be
neither a premium nor
a free hospital. We are
focused on inclusivity.
Dr. Parveez Ubed
Founder, ERC Eye Care
SOCIAL ENTREPRENEUR
Mission
33 33 Intelligent Entrepreneur February 2014 33 33 33
expensive facility, which increases the
cost of running an eye-care center. ERC is
offering optometrists at the vision centers
as they are a relatively low cost resource.
They can connect with an ophthalmolo-
gist through phone or Skype for severe
cases or patients can travel to the hub
hospital in case they require surgeries,
says Lahoti.
Optometrists are different from
ophthalmologists as they are not physi-
cians but mainly eye care specialists who
cannot perform surgeries but can diag-
nose, prescribe medicines and look into
pre and post operative care.
In December 2013, the company raised
funds from Ennovent, Ankur Capital,
along with Ennovent Circle member,
Sadeesh Raghavan, and Beyond Capital
Fund. Ubed himself has invested about
`5 lakh in the business and most of the
companys profits have been reinvested in
the expansion.
The foresight
Lahoti of Ennovent throws some light
on the challenges he sees for ERC.
Acceptability is a challenge. Many people
dont take eye care very seriously in the
rural areas. The company is at an early
stage. Demographic and region specific
challenges are there too, beside political
instability in the region, he says.
To overcome the challenge of accept-
ability amongst the rural population,
ERC has adopted a model similar to that
of ASHA workers from the governments
primary health care program, wherein
local women are recruited, trained and
paid for their services . They give three
to four hours of their time and are able to
conduct the basic screening of patients,
says Ubed.
In November 2012, ERC set up its
first vision center 35 kilometers from
Jorhat and now has four vision centers
in the same district. On an average,
each of ERCs vision centers reaches out
to 60,000-1 lakh people. These centers
charge a monthly registration fee of `50
as against `200 charged by private prac-
titioners, says Ubed. The company will be
opening its first few vision centers in the
neighboring district of Sivasagar this year
and will also set up its first hub hospital
this year between Sivasagar and Jorhat.
There will be one hub for every six vision
care centers, says Ubed. This forms a
cluster. ERC is going to focus only in the
North East for the next four to five years.
In 2015, Ubed is targeting four clusters
there. In Assam and the rest of the North
East, there is almost no competition. We
arent operating in the cities or towns
where there are other players. The aim is
to try and open vision centers in areas 35
kilometers or beyond from any city.
ERC is providing spectacles to the rural
population at a standardized lower cost
unlike the arbitrary prices other players in
the cities charge, says Ubed, and will also
start offering surgeries soon. These will
be at a starting price of `2,000, though
there will be packages of up to `25,000
depending on the lens and other factors.
We are a for-profit hospital. We make
a profit on all our services. All our vision
centers so far have been breaking even
except the first one in Johat district. We are
looking to be neither a premium nor a free
hospital. We are focused on inclusivity,
adds Ubed.

M
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K
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N
According to the WORLD HEALTH
ORGANIZATION, 18.8 PERCENT
of Indians suffering from cata-
racts belong to the state of Assam.
EYE SORE
FAR-SIGHTED:Dr Parveez Ubed
COVER STORY
Wally Olins, one of the worlds foremost branding
and corporate identity gurus, had once told us
that of all the Indian brands, only onethe Tata
Groupwas easily recognizable by people though
all the echelons of the global economy. It was a
statement that first made one a wee bit proud and
then a fair bit dismayed. A nation whose traders
and merchants had walked the sands of time to
far-off continents with their wares had no other
home-grown global brands to talk of.
The game is changing however. The world is flat, as
Thomas Friedman has told us repeatedly, and you no
longer need to be a mega-giant with a war chest of a
few hundred billion dollars to be recognized as a global
brand. In particular, we are now seeing a wave of
emerging companies, many but not all within the realm
of technology, whose ambitions have little to do with
their local markets. They consider the accountant in New
Delhi as much as his customer as the surfer in Miami.
If you look carefully, there are examples all around
usDropbox and Uber from the US, Skype from Estonia,
Spotify from Sweden, and Rovio from Finland.
Pretty soon, and that is our wager, a clutch of Indian
companies too will join this lot and carve a name for
themselves across the world. Using Indias vast reserves
of talent, the experience of having worked in one of the
most chaotic markets, an appetite for risk that comes from
perpetually living in a tough environment and a surge in
availability of capital, these firms are ready to take their
game global.
Scratch that. They already have
GOING
GLOBAL
GOING
BIG
TEAM ENTREPRENEUR
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H
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A

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IT
is one of the hottest consumer internet start-
ups to come out of India. But India is evidently
not hot enough for it. Four years in the Indian market,
and restaurant discovery startup Zomato has already
bulldozed its way into multiple geographies across the
world. That is, of course, not before it has dominated the
(some say it has 70 percent of it) home market.
It was in 2012 that the men and women at Zom-
ato first decided that India was not enough and that
theirs was a business that could penetrate and eventu-
ally dominate other markets. Today, in a period of 17
months, Zomato is present in 10 countries.
The expansion has been almost freneticthe com-
pany has been hiring overseas talent as well as sending
its early employees to target countries, and working fu-
riously on packaging the product to suit local needs.
LOOK OUT!
Launched in 2008 by Pankaj Chaddah and Deepinder
Goyal, Zomato had first started in the National Capital
Region. However, it only recently went to its 13th city
by starting operations for Guwahati. Instead, the found-
ers have pivoted their company to look for opportunities
Might not be long before a few million people join
urban Indians in saying that when hunger strikes
AVANISH TIWARY
overseas. First up, Zomato launched its services in UAE
and Singapore in September 2012, around the same
time that it raised funding from Info Edge (India) Ltd.
(which owns 50 percent in it) and Sequoia Capital.
These were underserved markets and ripe for Zom-
atos picking. If you look at UAE or Turkey, they did
not have any such services, says Pankaj Chaddah, Co-
founder at Zomato. Since then, the company has ex-
panded to Indonesia, Brazil, New Zealand, Philippines,
South Africa, Sri Lanka, Turkey, and the UK. A quick
look at their career listings tells us that Portugal is next.
Most of these overseas ventures, according to people
at the company, have been successful in the immediate
goals set for them, given that not many of these markets
had anything like the product offering of Zomato
a portal that combines reviews, listings and menus to
help consumers make their choice.
BEST TREAD CAREFULLY
However, the rapid expansion has had its share of les-
sons for the firm. In Singapore, its first overseas market
with the UAE, it had to pull out because of the problems
it had to face in procuring menu from restaurants.
Gathering content in Singapore was quite a chal-
lenge as very few places have printed menus. Most
of them have their menu written on the walls, says
Albinder Dhindsa, Head of International Operations
at Zomato, adding that you could find 20 restaurants
within a 100-meter stretch in the city-state.
Since there are a lot of restaurants within a small
area, the culture to discover new places is muted, rea-
sons Dhindsa. So we decided to pull out all our efforts
there and put Singapore on the back burner.
The lessons from the previous market entered are
quickly deployed in the next market by Zomatos expan-
sion teams. Going with a set template earlier, the offer-
ings are now customized according to the citys eating
habit. For example, unlike for New Delhi, Londons page
does not have a separate filter for home-deliveries as
people dont order in food as much over there. Deepin-
der Goyal, Co-founder at Zomato, says that they take
care of the minutest of details with respect to consumer
habits. We were told that Sheeshas [hookahs] were the
hottest thing in Dubai and we put in a filter of that.
ON THE MONEY
Goyal says the India and UAE businesses are self-sus-
tainable now and within a month, the South Africa and
Philippines businesses will start earning profits too.
On a company level, we will be making loss for some
time [with the expansion and scaling up] and so we are
thinking of profitability country-wise.
Currently, 30-40 percent of Zomatos revenue comes
from the overseas business, which the founders say
will escalate to around 60 percent in a couple of years
1
2
3
4
5
6
7
8
9
10
1. UAE
2. Sri Lanka
3. UK
4. Philippines
5. South Africa
6. New Zealand
7. Turkey
8. Indonesia
9. Brazil
10. Qatar
From Sao Paulo to Auckland
CAN YOU
ZOMATO THAT?
COVER STORY
as they spread in more potential markets. Chaddah
points out that in the coming years, Indias pie in the
overall revenue will be even smaller.
Of all the markets, according to Goyal, UK is the
most difficult (and capital-intensive) market Zomato
has treaded into. UK is peculiar because there are no
local playersall the global players are in there fight-
ing for the market share and nobody has a significant
number. Everyone has 10-15 percent market share...
so we will have to fight for a little longer, Goyal says.
In order to further beef up its expansion muscle in
the UK, Zomato partnered with Toptable, a London-
based table reservation portal in August 2013 to be
its exclusive table booking partner. This is Zomatos
first ever partnership to provide an add-on service and
Chaddah says that the company will be open to more
such partnerships in the global market.
THE RIGHT MIX
On the capital side, the investments in November from
Sequoia and Info Edge`227 crorehave given the
company enough financial muscle for international
expansion. People, says Goyal, will be the key fac-
tor going forward. He says that the team has a list
of 22 countries to be present in for which they are
constantly in hunt of people.
Mohit Bhatnagar, Managing Director at Se-
quoia Capital, says that Zomato is already lever-
aging Sequoias global network. For example,
in just a few weeks, Sequoia bubbled up a coun-
try head for Brazil, he says, adding that at-
tracting world class people to a far away Indian
startup can be hard.
There is a void in most global markets to
help consumers find fantastic options to eat out. It
makes imminent sense to fill this need, Bhatnagar
says. The US is the only market where we have not
jumped the gun on. If we can find good people, we will
enter that country, says Goyal. In the US, we have to
figure out the product a little more, make changes to
the website. Gaining market share there is very tough
as Yelp [a popular review site] is very strong.
However, it is not all Go West. Zomato has inter-
ests in other emerging geographies, but internet and
mobile internet penetration are important factors in
those decisions. Even though Zomato is present in
South Africa, the north of Africa has been off its radar
due to low internet penetration.
Dhindsa says that they are looking at emerging
countries similar to Indiafor example, Brazil, In-
donesia and Turkeywhere people are crazy about
surfing on their smartphones. There are countries
like UK, where internet penetration is very high, but
people are not addicted to smartphones as we are. In-
dians take on trends much faster.
WAITING ON
AMERICA:
Deepinder Goyal
GOING
GLOBAL
GOING
BIG
O
ne cannot think of anyone who might not want a
PayPal Mafia in India. Where men and women
from one great company branch out to form tens of even
greater companies themselves.
It is early days, but Zoho Corp., one of the best prod-
uct companies to come out of Indias technology sector
is in the race for that moniker. One of its key employees
at one time, Girish Mathrubootham, is now building a
global startup of his own that is fast gaining a name for
itself in India and more importantly, abroad.
Having spent over a decade in Chennai-based Zoho
building software products for global markets, Mathru-
bootham knew that he had spent long enough to spot
key changing trends in the area of customer support
helpdesks. In 2011, he quit as the Vice President of Prod-
uct Management at ManageEngine division of Zoho to
build what is today known as Freshdesk Inc., which of-
fers an online customer support helpdesk software to
its customers.
Mathrubootham, CEO at the Chennai-based Startup,
says that there are other such products in the market but
Freshdesks USP is that it offers a 360-degree approach,
where it tracks social media as well.
NOT A SALESMAN
The idea was first worked upon and transformed into
Freshdesk in October 2010, says Mathrubootham, who
founded it with his Zoho colleague Shan Krishnasamy,
Chief Technology Officer and Co-Founder at Freshdesk.
The product was officially launched in June 2011 and
since then, the company has rapidly scaled internation-
ally winning the support of investors and stakeholders
alike. From six paying customers then, Freshdesk has
today grown to 15,000 customers across 120 countries.
On top of that, it has been further given some extra
punching power thanks to a whopping $13 million in
venture capital funding over Series A, B and C rounds
from Accel Partners and Tiger Global, the last round
coming in November 2013.
Indian origins it may have, but Freshdesk set out to
be a global company from Day Zero. Its first client was
from Australia and India is just one of its many markets.
Our business model is not to have a bag carrying sales-
man meeting clients. It is all done online. So it does not
A FRESH CHALLENGE
One of Indias hottest SaaS startups is biting its way into the vast global pie of customer service and support
SHONALI ADVANI
matter to us if the client is in Brussels or Bengaluru, the
CEO points out.
Freshdesks offering is simple but efficient and ex-
pansive. Over phone calls and online demos, interested
parties get a 30-day free trial, during which Freshdesk
helps with evaluation before a company opts to buy a
plan or not. The software is sold through monthly sub-
scription packages starting at $15 and going up to $49.
On his product, Mathrubootham says that as a com-
pany in the customer support space, they have realized
quickly that in todays world, a key change to note was
that customers talk to other customers about companies
rather than with them.
In todays digital era of immediacy, reviews trump
traditional sales spiel. With Freshdesks 360-degree
The New Social Customer...
Are more likely to try new
things based on friends
suggestions on social media
80%
Expect a reply within 24 hours
when they connect with a brand
online for service
72%
Like brands on
Facebook because they
are a loyal customer
49%
Source: CMO Council 2011 Variance in the
Social Brand Experience Report
Expect to interact with other
customers and share experiences
when they like Facebook
61%
...And why Freshdesk matters
COVER STORY
approach, customer support agents, the CEO says, can
now spot problems and respond quickly before they es-
calate. Its software is configured to use the application-
programming interface (API) of social media networks
like Facebook and Twitter to pull in any string or direct
message that has information relevant to them.
This way, the competitors of a client can be watched
too. So if someone is unhappy with your competition,
you can use that information to make them better of-
fers, Mathrubootham explains.
Freshdesk has also introduced features to make the
job fun for employees of its clients by adding game me-
chanics into the product.
GLOBAL BET
This knackof innovating on product features that are
appealing to its customer basesets it apart from its
rivals working in the same space, says Shekhar Kirani,
Partner at Accel India, which has put in $6 million over
three rounds in the firm.
Kirani says that Freshdesk has done an excellent job
in creating a highly user-friendly product and executed
well in all aspects of company building.
Their product, on-premise installed software, is a
multi-channel helpdesk solution that is targeting small
and medium enterprises (SMEs)its sweet spot being
companies with five-50 peoplein customer support,
explains Kirani, pointing out that many other startups,
especially e-commerce companies, are their clients too.
Freshdesk has also signed up a channel network of
over 70 partners in different countries for a reseller pro-
gram. All our marketing is done online. We generate
leads through SEO, Google Adwords, and Banner Ads,
says Mathrubootham.
According to him, the US, UK, Australia, and Canada
are the companys big-ticket markets. Netherlands and
Poland, the back-office hub for Europe, come in next.
In the early days, our non-English speaking markets
were not working well for us. Even though they were big
markets, we had to cut spending in countries like France
and Germany, he says.
Learning, the team at Freshdesk moved to work more
on the product until it was fully localized and translated
in local languages. Now we will attack difficult mar-
kets such as China and Latin America through our chan-
nel strategy, because language is a hindrance there,
Mathrubootham says.
Re-emphasizing the firms global nature, Mathru-
bootham tell us that they have invested in local lan-
guage websites and SEOs for an international play and
easy customer acquisition.
We support 25 languages today, he says. Now we
are working in multi-currency support, Mathruboo-
tham says, adding that for now, Freshdesk will go deep-
er into existing geographies. There is work to be done.
360-DEGREE AMBITION:
Girish Mathrubootham (L)
and
Shan Krishnasamy

P

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H
W
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I
GOING
GLOBAL
GOING
BIG
THE
thing about talking of Indian emerging
companies that are serious global play-
ers is that one is easily lulled into thinking that they are
all about technologyeither offering it or being driven
by it. Its a lazy mistake, considering Indias agrarian
sector was probably Indias first and is its largest export-
er. And some are still finding new opportunities there.
The people behind Mumbai-based INI Farms are one
such lot and their export is the pomegranate or anar.
A non-indigenous fruit (its origins are in modern-day
Iran), the pomegranate has long been cited in our cul-
ture as a symbol of fertility, prosperity, and abundance.
INI Farms, by their account, is surely getting the taste
of prosperity. Started in 2009, the company today has
1,200 acres of land under cultivation in Maharashtra,
Gujarat and Madhya Pradesh. The company produces
2,500 tonnes of pomegranates today and is looking to
expand that to 10,000 tonnes in the next two years.
In FY13, the company got 90 percent of its revenues
from the international market and 10 percent from the
Indian market. Focused on the export market right from
the start, INI Farms now exports pomegranates to Eu-
rope, the CIS and the Middle East in the face of global
rivals from South Africa, South America and Spain.
THE NEVER-ENDING PROJECT
The roots of INI Farms lie in a consulting firm in 2003
that was set up by Pankaj and Purnima Khandelwal, a
husband-wife duo, to assist global companies with India
entry, agri-rural consulting and infrastructure services.
It was during this period that INI Consulting started
consulting on a project that made the duo eager about
getting into the agriculture business, says Khandelwal,
Managing Director at INI Farms.
After working on it for a few years and understand-
ing the sector, the founders launched INI Farms in Sep-
tember 2009.
Agriculture is a huge industry. So we had to pick one
field we wanted to build a business in and horticulture
has some high value commodities. From a financial per-
spective, it made more sense, Khandelwal says.
THE FARM
GOES FOREIGN
INI Farms is taking the Indian anar to markets all over the world
SHRUTI CHAKRABORTY
The choice to go with pomegranate was based on two
considerations primarily. We wanted to try and do
business around the year. Other fruits like Mango are
seasonal. The second consideration was shelf life of the
produce after harvesting, Khandelwal says.
Pomegranate has a shelf life of up to three months
if stored in the right conditions, the founders tell us.
Another factor that helped them decide was that pome-
granate could be exported in various formsfruit, arils
and juice. We could add value and products every few
years and expand the business, Khandelwal says.
Importantly, there was practically no large orga-
nized player in the space. And the moment coincided
with a change in perception in the western world about
Indian produce. It also helped that logistics were im-
proving in India, Purnima, CEO at INI Farms, says.
Because the first crop of produce takes three years,
the company first started with sourcing the fruits from
farmers already growing pomegranates in India after
checking that the quality of the produce was up to stan-
dard. In the years that followed, the company began
farming the fruit themselves and getting it through the
contract farming model. While the company outsources
the logistics, the post harvest infrastructure is main-
tained in-house at centers in Maharashtra.
To ensure quality and consistency, it was impor-
tant for us to be involved in the back-end. Particularly
because we were focusing on the international market,
which has a stringent set of standards, she says.
QUALITY AND SAFETY
Ronnie Screwvala, Founder & Advisor, Investment
Strategy at Unilazer Ventures, which invested in INI
UAE
Bangladesh
Netherland
UK
Saudi Arabia
Russia
Thailand
Nepal
Kuwait
Oman
Other
Countries
Source: APEDA, Govt of India
43%
16%
7%
7%
6%
4%
2%
2%
2%
1%
10%
Who is
eating the
Indian
Pomegranate?
COVER STORY
Farms in 2012, marks this move as pivotal to why the
firm has moved as fast as it has in international markets.
The key difference between operating in the in-
ternational and Indian markets is the focus on food
safety and environment protection. Being able to sup-
ply in extremely tough markets like Europe has ensured
that the product quality is of highest standards and
meets toughest environmental and safety norms, says
Screwvala. Prior to raising funds from Unilazer, INI had
also raised funds from Mumbai based impact investing
fund Aavishkaar in 2011 and an angel round before that
from Ashish Gupta, co-founder at Helion Ventures, and
Pawan Vaish, co-founder at IBM Daksh.
The way Indian agriculture isthere is a fair
amount of fragmentation. INIs initial challenge was
to take products from an unorganized back-end to an
extremely organized front-end. The quality of farming
and imparting training and knowledge was important,
says Ajay Maniar, Principal at Aavishkaar Venture Man-
agement Services.
Khandelwal says that initially, the investments were
directed towards expanding the firms capacity. In the
last six months, we have focused on building the inter-
national markets further...developing sales and a strong
supply chain, Khandelwal says.
According to Khandelwal, INI plans to expand its ex-
port market and focus on South East Asia and Far East in
the coming months. More importantly, it is also looking
at expanding its new offering of bananas, which it has
been producing and selling since late 2013.
Over the next two years, the company is targeting a
turnover of `100 crore. We are not looking at launch-
ing any new products for the next two years and will fo-
cus more on scaling up our activities and attain a leader-
ship position in each of the markets we are dealing in,
Khandelwal says.
THE `FARMERS:
Purnima and Pankaj
Khandelwal
GOING
GLOBAL
GOING
BIG

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anagement experts will tell you that the first and
foremost task of any business leader is to take de-
cisions. Small decisions, big decisions, urgent decisions,
panic decisions, painful decisions, logical decisions
all make up the game that entrepreneurs have to play in
order to not fail their companies and their people.
For Girish Ramdas and Vijay Radhakrishnan, Found-
ers at Magzter, one of the worlds largest digital maga-
zine aggregators, the decision to move to New York, the
symbolic birthplace of magazine publishing, started
from being a logical one to being a no-brainer.
Started out of Chennai, Magzter was growing at a
rapid clip when in 2010-11, the duo decided that how-
ever lucrative emerging markets were, there would be
no better location than the Big Apple for their business.
Building a global digital company sitting in India is
quite difficult and that too when our potential clients
all the publishers are sitting in the US. To make our busi-
ness more viable, we needed to have a presence in the
US, says Ramdas, Co-Founder and CEO at Magzter.
THINKING GLOBAL
For the uninitiated and digitally ignorant, Magzter is a
digital newsstand of magazines from where readers can
choose and subscribe to a magazines digital version,
and download and read them on their handheld mobile
devices like smartphones and tablets.
According to the founders, they wanted to grow on
a global level from the very beginning and not just re-
main a local player. Even though smartphones and
other such mobile devices have proliferated in India,
Ramdas says, people in India dont usually subscribe
to magazines and prefer buying single copies instead.
This makes the Indian subscription market small com-
pared to European countries.
According to the International Data Centre, the rate
of growth of global sales of tablets will increase from
11.8 percent in 2013 to 16.5 percent by 2017, and for
smartphones, it will increase from 59.5 percent to 70.5
percent. This will offer publishers a growing alternative
to sell their magazines and reach new audiences.
The trend of reading on mobile devices has brought
in new users. About 70 percent of digital magazine
buyers are new readers of magazines. In the US, 10-15
THE GLOBAL NEWSSTAND
Buoyed on by the growing number of tablets and smartphones, Magzter has surged to become one
of the worlds biggest digital magazine aggregators
AVANISH TIWARY
percent of the physical magazine readers have moved
to digital, whereas in India this number is just two to
three percent, says Radhakrishnan, Co-Founder and
President at Magzter.
Radhakrishnan says that peoples buying behavior
for content changes as they switch to smartphones from
desktops or laptops. While reading content on tablet,
people tend to subscribe to it, but during online surfing,
people just browse and read content for free. We are
here to connect them with the publisher, he adds.
75%
TABLETS
2.9
30.3
10.0 1.7
23%
SMARTPHONES
FREQUENCY
READS PER MONTH
READING SESSION USAGE
FEBRUARY 2013
ENGAGEMENT
PAGES/READ
Tablets dominates
both Pages per
Read and Time
per Month
Similar Read per
Month for both tablet
and smartphone
2%
E-READER &
GAME
CONSOLE
Magzter's Digital Reader
Source: Adobe
DIGITAL
MAGAZINE
MARKET
SIZE
$2.9 BILLION
INCREASING
TO $8.4
BILLION BY
2016
DIGITAL BOOK
MARKET
SIZE
$8.2 BILLION
RISING TO
$20.7 BILLION
BY 2016
COVER STORY
WHY IT WORKS
According to people in the sector, Magzter has piqued
many international publishers interest with its offer
to manage everything for them on its digital platform
without charging anything extra.
The firm works on revenue sharing with publishers,
for whom it takes care of all the marketing, digitizing
and technology aspects.
In December 2013, Magzter added books to its cata-
logue and said that it will work with book publishers to
digitize and sell them across all platforms. Ramdas says
that they are confident of being able to add half a mil-
lion books within two to three months.
Magzter is also planning to work towards expanding
its services to ad-selling. Currently, the ad that is in the
print copy goes into the digital copy. However, publish-
ers dont get anything extra for advertisements through
digital circulation of the magazine, he says, adding
that they plan to bring new clients who will be ready to
put their advertisements on just the digital versions.
Digital-only advertisements have seen a recent
growth and interest from brands, advertisers and pub-
lishers alike, according to Holger E Metzger, Managing
Director, TMRC Impact, an advertising agency, which
has offices in Shanghai and Gurgaon.
The increase in cyber-population and thus an ever-
growing consumer segment has shifted consumption
habits to online. Correspondingly, brands who retain
a keen eye on online trends have shifted increasing
amounts of their budgets to online publications because
their reach is gaining critical scope, says Metzger.
Varying with brands and sectors, digital advertis-
ing spend has increased, with a few segments, Metzger
says, going up by 40 percent.
In November 2013, Magzter raised $10 million from
Singapore Press Holdings and its existing investor Ka-
laari Capital, which will be used to expand its services
in the BRIC region and developing technology.
Rajesh Raju, Managing Director at Kalaari Capital,
which invested $3 million in Magzter in early 2012,
notes on Magzters global ambitions that international
customers have always been the real targets of Indian
consumer technology companies. India may or may not
be ready with the transformation that has been happen-
ing with tablets and smartphones. If you want to make
a large company in this space, you have to be global.
For Magzter, US is currently the biggest market where
the company says it has a 50 percent market share when
it comes to publisher acquisition. The company has also
bet big in the Asia Pacific region and plans to expand
there at a fast clip. It is already available in Indonesia,
Singapore and Malaysia. Magzter will also be launch-
ing in Brazil, Russia and China this year. It will also be
launching in Japan, Eastern Europe, Latin America and
Canada over the next 18 months.
MEN OF MAGAZINES:
Girish Ramdas (L) and
Vijay Radhakrishnan
GOING
GLOBAL
GOING
BIG

A
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K
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P
eople starting up in India...we tend to under-
estimate ourselves a lot, because we feel like
we are not being pitched against the best in the world.
But when you are kept amongst some other brilliant
minds, you realize that you are not different from
them, you just get lesser opportunities, says Sampad
Swain, Co-founder and CEO at Instamojo.
Swain says he realized that during his stint at the
500 Startups Accelerators Fall 2012 batch in the US.
We are no different from anyone sitting in Silicon Val-
ley, he says. A serial entrepreneur, Swain knows a bit
about building technology companies, so his words
come from a position of experience. Swain built and
then sold his previous company WanaMo.com in 2010
CLICK SHIFT
Instamojo wants to tap every individual between Mumbai and LA who has something to sell online
SHRUTI CHAKRABORTY
which was rebranded to DealsandYou.com. After that
came a period of looking inwards at the ecosystem as
he started making video newsletters by interviewing
entrepreneurs around the country. It did not start as
a serious business but the interest it attracted made
Swain think in that direction.
It was a private newsletter initially. I would then
upload the videos on YouTube a week later. But I want-
ed to monetize the effort, Swain says.
This is what led to Swain setting up Instamojo in
2011 along with co-founders Akash Gehani and Har-
shad Sharma. The idea was to really just help me
monetize my newsletter. There was no platform at that
time for selling digital goods, Swain says.

J
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COVER STORY
TAP, TAP, SELL:
(left to right) Sampad
Swain, Aditya Sengupta*,
Harshad Sharma,
Akash Gehani
*Vice President, Instamojo
The three possible ways to sell digital products on-
line at that time, Swain found, were through a market-
place that aggregated demand for the products, a store
builder who could create an online store for the prod-
uct (he found these difficult to manage and maintain)
and the third option was a payment gateway.
None of them however worked for an individual,
Swain points out. I wanted anyone to start selling on-
line without even trying very hard, he adds.
What Instamojo the product does is allow users to
sell digital products online including music files, PDFs,
photos, reports, etc. on its platform. Whenever a user
uploads a digital product to sell through Instamojo, the
user gets a link that he or she can distribute to those
interested in the products, Swain shares.
SILICON SUMMER
In early 2012, the company raised angel investment
from Rajan Anand, Head at Google India, and angel
investor Sunil Kalra, while the platform was still being
readied. In September that year, the firm joined the
500 Startups Accelerator.
Our ambitions grew at that time. Before that, we
were looking at building a business in India. But then
realized that geography should not be a reason for us
to restrict ourselves...we could build a global busi-
ness, Swain says, which prompted him to open an of-
fice in Los Angeles, California.
In May 2013, the company officially launched the
platform. Having started out in India, the companys
customer base is still mostly local, with about 15 per-
cent of its customers coming from the US. However,
the international share is growing fast.
Our customers are the sellers. Buyers are every-
where. But the sellers are currently mostly in India.
Users from 123 countries have registered on Instamojo
and people from 166 countries have bought from the
sellers on our platform, Swain says.
According to Swain, the company currently has
over 10,000 customers in India. Sellers have sold prod-
ucts for as low as `9 and as high as `60,000.
On his product, Swain says that from his earlier e-
commerce experience he had learnt that distribution
was difficult. E-commerce companies have to worry
about how to get people to visit their website repeat-
edly. The economics dont really work out when you
spend a lot on marketing, he says.
This gave Swain the idea to not take the responsibil-
ity of marketing upon him when he set up Instamojo.
With Instamojo, users share the link and bring in the
customers on their own.
We take a cut of five percent when a sale is made.
We provide the infrastructure in terms of payment
gateway, a digital delivery platform etc. in return for
that. The user or creator of the digital product keeps
95 percent, Swain explains. The platform also allows
users to give discounts to buyers.
TO THE BIG TIME
A few months before the launch, the company had
again raised a seed round of funding from early stage
venture fund Blume Ventures; 500 Startups; Anand;
Shailesh Rao; Vice President of Twitter; and Bhara-
tram Thothadri, Vice President and General Man-
ager at American Express. The company is currently
looking to raise a Series A round of funding, according
to Swain.
Karthik Reddy of Blume Ventures, says that In-
stamojos idea has evolved along the way and he sees
the company as a global playerbut says that staying
ahead of competition should be a priority.
Gumroad came up in the US a few months after In-
stamojo, which is a website along the same lines. Even-
tually local players in different countries will come up
and Instamojo has to find a way to stay ahead when it
looks more strongly at the global market, he says.
There are also challenges associated to being a
global player that is essentially facilitating payments,
according to Reddy. It is not easy to take a payments
business across borders. There are regulations in every
country and different currencies; the company needs
to figure out how to manage that very well.
While the company does eventually plan to look at
the global market strongly, the way to go currently,
Reddy believes, is through partnerships. The amount
of capital and bandwidth required to be a global player
is very high and being an early stage investor, we dont
infuse enough capital for that kind of expansion. But
going forward, as the company grows and establishes
itself, there will be a big scaling up opportunity.
So where are Instamojo-ers global
buyers from?
7%
USA
3%
UK
3%
Singapore
3%
UAE
2%
Canada
GOING
GLOBAL
GOING
BIG
Once an anti-establishment entity, leather goods maker Hidesign has now become
one of Indias most important home-grown brands under its founder Dilip Kapur
Shonali Advani
The
Accidental
Entrepreneur
SECOND LEAD
L
ets just say that Hidesign does
things a little different to regu-
lar manufacturing companies.
And that starts right at the base.
If you were to visit the companys first
factory, built in 1990, you would be taken
aback as to how far away it is from the
normal impression of a leather making
company. Custom built and designed by
well-known low cost ecological building
expert Ray Meeker, the facility stands
apart in its appealsolid raw brick
walls fired from local earth, minimal
use of paint, zero asbestos and a land-
scape embellished with ponds, streams
and waterfalls.
That non-conformist method of
construction carries the mark of
Hidesigns founder, Dilip Kapur, who at
65 is as unlikely a businessman as you
can findunpretentious, non-conform-
ist and free-spirited. A small-built man
of medium height with an impish smile,
Kapur however terms his leadership style
as disorganized and casual, one who
does not respect hierarchies and norms
enough. It is perhaps this frank and true-
to-himself demeanor that has let Kapur
use his non-conformist style to build a
`150 crore business from a creative bent
that has its roots in 1978 and a small
cottage in Pondicherry.
At the cusp of completing his PhD in
International Affairs from the University
of Denver in Colorado, US, Kapur took
up a nine-month stint with American
leather house Poor Richards, where he
first discovered the rudimentary facets
of piecing a bag together. The owner
made me realize how much I enjoyed it
[the process of making leather bags],
recalls Kapur, who eventually moved
back to India to live in the Sri Aurobindo
Ashram in 1978. As he spent time help-
ing the Aurobindo Ashram set up the
first Auroville shop and bakery, Kapur
started designing bags, one a day, in his
free time. People around me bought it.
A friend ended up owning seven of my
bags, which she modeled for the online
catalogue of Welthungerhilfe [a German
development agency], he remembers.
The organization eventually ordered
200 bags of each of the seven styles.
Before Kapur knew it, he was supplying
to Australia and the US, and by the early
80s, to the UK.
Our bags were well received in alter-
native stores, not fashion stores selling
smooth, shiny leather bags. The anti-
slick, freaks, hippies and anti-estab-
lishment sorts bought our bags. They
loved it, Kapur says, adding that this
was a culture he related to then. I
did not like the slick [leather] stuff.
But as the anti-establishment movement
calmed down and the flower revolution
all but disappeared, Kapurs rebellion
to conformist culture too subsided. His
hippy customers were now going main-
stream and it was through one such
customer that Hidesign found itself on the
shelves of department chain John Lewis
in UK. Kapur could no longer fool himself
that his anti-capitalist hobby was now a
full-fledged business, one that could
no longer function haphazardly from
make-shift facilities. By then, Hidesign
was supplying 1,000 bags a month to UK
alone. But I was a bad businessman. I
did not know how to read a profit and
loss account. I got cheated several times
by my accountants as I was interested in
the product side of the business, he tells
us about those times.
18,000-
22,000
PRODUCTION CAPACITY OF BAGS PER
MONTH
04
FACTORIES: (HIMACHAL PRADESH - 1,
PONDICHERRY - 3)
.
25,000
WALLETS A MONTH
60-200
RETAIL STORE FOOTFALLS
(DEPENDING ON THE MALL)
THE WORKSHOP
The transformation
Hidesign, derived from two words hide
and design, is today one of Indias most
well-known makers and retailers of
leather bags and accessories with 70
exclusive boutique outlets in 16 states
and 39 shop-in-shops across 129 multi-
brand outlets.
Its product metamorphosis is now
complete having gone from the earlier
alternative, rough, natural textures to the
feminine and slicker finishes that Kapur
once abhorred.
Its not as edgy as it used to be, but
more mainstream. I dont like it that
much but Ive become less edgy too. I
am more accepting of things and not as
narrow. I understand corporate culture,
Im not anti-business. In fact, I find busi-
nessmen interesting now, admits Kapur,
who holds the position of Founder and
President. A marker in that change
is Kapurs alignment with the Future
Group in 2009 for a joint venture under
which the two launched Holi, a range of
womens leather bags and accessories
designed with Indian aesthetics.
Kapur tells us that with the opening
up of his own attitude, he has been think-
ing about growing Hidesign with more
vigor. We have been slowly profession-
alizing in the last five years, he says,
revealing that he is intent on leaving a
legacy. Year 2014 will be the most impor-
tant year going forward for Hidesign as
the company is now chasing a higher and
wider brand identity. Since the middle
of 2013, the company has taken some
important steps towards this aim.
The company recently launched its
own range of sunglasses, the first non-
leather accessory and the start of its
brand extension plans, which will see the
company introduce footwear for men and
women, stationery and scarves by the
first quarter of this year.
In the coming months Hidesign is
going to expand its retail footprint in
cities like New Delhi, Raipur, Kolkata,
Vadodara, Amritsar and Mohali. By end
2014, Hidesign aims to have over a 100
exclusive boutiques pan-India.
We now want people to see us as a
brand and not a bag company. A brand
has something to do with lifestyle, says
Kapur, who gave us a sneak preview of
some shoes. The mens range is casual,
semi-formal, while in the womens
range we see a mix of spunky and styl-
ish leather-lined designs.
For the womens range, which will be
priced between `4,000 to `5,000, Kapur
has partnered with an unnamed Chinese
manufacturer. These guys are incred-
ible, he says. Its the same company
that makes shoes for all luxury brands.
For the mens range, slated to be priced
around `7,000, Kapur has gone with
a local maker. The company has also
finally embraced the online world after
years of being falsely known as only a
offline retailer. Only when we went
with Jabong, Flipkart and Myntra in
early 2013 did we realize the power of
e-commerce. Weve been selling on our
own site since 2009, but did not realize its
significance. We have been stupid, says
Kapur. Today, the firm sells 5,000 pieces
across all three portals, every month.
54%
HANDBAGS
17%
MENS BAGS
5%
TRAVEL BAG S
3%
MENS BELT
8%
LADIES WALLETS
13%
MENS WALLETS
CONTRIBUTION
BY VALUE
OF TOTAL
TOPLINE
NOT JUST
ABOUT A BAD
From a bag company,
Hidesign is converting itself
into a lifestyle rm with
footwear and non-leather
accessories like sunglasses,
stationery and scarves
SECOND LEAD
Ganesh Subramanian, COO, Myntra reaf-
firms the good sense behind Hidesigns
decision to sell with multi-brand online
retailers. He says, Brands like Hidesign
fall in the premium category on Myntra
due to their positioning and price points.
We have seen the brand grow over 300
percent since it was first launched in July
2013. It sells more than two times its clos-
est player in the premium segment and
has a more mature and loyal fan follow-
ing online.
The LV connection
On the long-term future of the company,
Kapur says that he wants to give Hidesign
a good shakeup as he pencils out the next
course. We want to become better orga-
nized as a company. I want a good COO. I
want the operations off my back, so I can
concentrate on the creative side.
People really matter, he says, more so
in India because as a people, we are less
process and systems driven. Working
and handling people is an important and
difficult thing you do as an entrepreneur.
Whether you succeed or not depends
on the people you have, not on you,
states Kapur.
Kapur credits the top brass at French
luxury brand Louis Vuitton (LV), which
picked up a stake in Hidesign in 2007, for
changing his thinking.
They offered 20 percent. We lowered
it to 5 percent because I did not need their
money. I told them I want your help.
Theyve been very true to their word,
shares Kapur, clarifying that there is zero
connection between LV selling in India
and Hidesign. Ive always said the only
people I want to work with are those
who can teach me. I dont want to work
with those who can grow me or give me
money. A clincher to this deal, he tells us,
was LVs fascination with an all-women
factory where each bag is handcrafted
by four workers together as LV too hand-
crafts its own bags.
On the advice and mentoring he got
from LV, Kapur says the crucial one was
to increase his focus on India first and
then elsewhere. Your own market must
be your strongest, they reportedly said.
Kapur admits they were late to enter
India, only in 2000 following expansion
to Russia and South Africa. They started
with tourist destinations like Pondicherry,
Cochin, Goa before expanding to metros
like Bengaluru and Mumbai.
We did not think our products would
sell or that there was a market. Men were
wearing safari suits. Who would carry my
bags with that? he laughs. Today, Kapur
has to keep his designs fresh in India
with two collections, annually. Kapur
himself designs 30 bags a season and lead
designers in Italy and LondonAlberto
Ciaschini and Fabian Lintottdesign
about 80 bags a year each.
By the time this issue of Entrepreneur
is out, Hidesign would have launched
its Icon collection, a first time initiative
to showcase and resell 12 of its designs
from the 70s. Louis Vuitton told us that
it is important to go back to our heritage
and talk about it, Kapur says. You are
not just floating in time. Everything is
in continuumyou have a past, present
and future. The future is also connected
to the past, and great strong brands are
built on a legacy, he recalls them saying.
New doors, new goals
The alignment with the luxury behemoth
has also opened doors for Hidesign vis--
vis on its sourcing and technical needs.
China has got gradations from excel-
lent to crap. The excellent would not
look at an Indian company. The sunglass
people drove us nuts, till I got the Louis
Vuitton people to talk to the owner of
the company to give us better relation-
ship and service, Kapur exclaims. The
quality systems Hidesign has incorpo-
rated recently are also courtesy LV and
their insights. Every single lot from their
tannery has a quality report now. If there
is a problem, you can trace it backwards
and find out where the fault is, he says.
Internationally, they want to move up
the value chain. In department stores,
we want to position Hidesign with mens
fashion apparel brands. Right now were
placed with luggage items on the last
floor. Also, we want to target high fash-
ion boutiques, says Vikas Kapur, Director
International Markets.
Vikas is one of Kapurs four children
and the only one currently involved in the
business, handling international markets
and the B2B vertical. Kapur says that in
line with professionalization, he can
safely say that succession may not neces-
sarily mean handing it down to his kin.
The professionalization will get
another boost soon as Hidesign readies to
bring in a logistics person from LV. The
nitty-gritty of business is what I want to
learn, he adds.
Hidesigns numbers, he admits, can be
way better than they are now (not disclos-
able) and that the financial aspects of
business are still his weak point.
He says that in the long-term he wants
to make Hidesign a clean company with
the right attributes to be a solid global
brand. There will be no place for chalaak
culture. We want integrity, which is the
most important thing to us, Kapur says.
So what is he looking for in his people
then, we ask, for building the culture of
the forward-moving Hidesign? A spark
in the eye, he says. I dont want people
who think they are very cool. Coolness is
one of the biggest diseases in India right
nowit drives me mad. I want people
who are steady and can straddle differ-
ent cultures.
Just like he did.
INTERNATIONAL
MARKET
Distribution network: 10
distributors in 23 countries
Visible in: 2,000 stores
Working and handling people is an important and difficult
thing you do as an entrepreneur. Whether you succeed or not
depends on the people you have, not on you.
Dilip Kapur, Founder and President, Hidesign
T
he last time there was talk of
an industry attracting money
like it was Christmas, we all
were looking at e-commerce.
But away from the razzmatazz of the
digital and technology world, an agrar-
ian business is kicking into high gear.
Indias dairy industry is booming far
away from the laymans sight. It is grow-
ing at a compounded annual growth
rate of 15-17 percent and is touted to
grow to $140 billion by 2020, a report
from Investor Relations Society (IRS)
from October 2012 said.
Milk is the countrys biggest agricul-
tural produce contributing 22 percent
to the agricultural GDP. In 1998, India
became the worlds leading producer of
milk, accounting for over 15 percent of
the global output, the report said. Milk
production alone is expected to cross
200 million tonnes by 2016 from the
current 125 million tonnes.
Late starter
One is surprised to know that Indias
private dairy sector is only about
two decades olduntil 1991, private
companies were not allowed to operate
in the dairy sector, which was controlled
by the government and cooperatives.
Post the deregulation in 1991, a
brave few decided to enter the market
against the cooperatives. Devendra
Shah, Chairman of Mumbai-based
Parag Milk Foods, which makes the Go
and Gowardhan brands of dairy prod-
ucts, was one of those few.
Previously selling cattle feed to dairy
farmers, Shah entered the business
because of a problem.
In the few years before 1991, dairy
farmers used to suffer when coopera-
tives and government milk dairies
declared milk holidays. Once or twice
a week, they would refuse to take milk
from the farmers and there was surplus
milk. This had been affecting my cattle
feed business as well, he says.
This prompted Shah to set up his
own dairy, Parag Milk Foods, in 1992
with an initial capacity of 20,000 liters.
For the first few years, Shah focused
on the milk business and supplying
milk pouches to the Western region,
mainly Maharashtra. But before Shah,
another group of dairy technologists
had decided to step into the industry in
Andhra Pradesh. Creamline Dairy, the
producers of Jersey brand of milk and
milk products sells its products mostly in
Andhra Pradesh, parts of Maharashtra
and southern Indian states.
K Bhasker Reddy, Managing Director
of Creamline Dairy, tells us that they had
started with a small processing plant
of 1,500 liters per day. At that time,
procuring the milk was the biggest chal-
lenge. Getting suppliers and custom-
ers to trust a new brand and company
needed work.
Delhi-based Kwality Dairy is one of
the prominent players from North India,
which was set up at about the same time
as Parag Milk Foods.
Former Andhra Pradesh Chief
Minister Chandrababu Naidus venture
Heritage Foods Ltd. also came up at the
same time in Andhra Pradesh. Hatsun
Agro Products Ltd., based in Chennai,
has been around longer with its Arun
The Indian dairy sector is growing at
a rapid clip and attracting investors
from home and abroad
SHRUTI CHAKRABORTY
IN FOCUS
brand of ice creams. In 1993, the
company set up Hatsun Dairy.
Local flavors
Each of these companies has created a
market for itself in its home state and
in the neighboring states. However, a
common negative factor between all of
them is that even after 20 years, none of
them has really managed to establish a
national brand.
Parag is one of the companies that is
really pushing to build a national brand
with a range of new products. After a
few years of selling packaged milk,
Shah had realized that there was only so
much one could do by selling milk alone.
I had realized that the liquid milk
pouch market in our region was satu-
rated. So, we began converting the addi-
tional milk into milk powder and ghee
by the latter half of the 90s, he says.
This gave us an additional revenue
stream and we even began exporting the
milk powder.
In the meantime, Shah also antici-
pated that India will see a growing
demand for cheese and in 1999, the
company began manufacturing the milk
product. By the early 2000s, Parag had
become the largest exporter of skimmed
milk powder when the government
decided to nip this stream of income
with a ban on the export of milk powder.
We were almost entirely dependent
on the international market for our milk
powder business, Shah says. In the
period from 2002-2005, the company
then shifted its focus from bulk sales
to an FMCG play with cheese and other
dairy products.
There was a market gap. Besides
Amul, there was no other player for
butter or cheese for consumers,
Shah says.
Shahs experience of doing busi-
ness on the B2B model has held him
in good stead. Parag is a supplier to
pizza chains like Dominos, Pizza Hut
and Papa Johns besides its consumer
products business. Today, with a range
of value added products (VAPs), only
20 percent of the companys business
comes from fresh milk. The rest comes
from the VAPs for which Parag has a
nationwide presenceit has expanded
as far as Jammu and Kashmir and the
North East with its UHT Milk (Ultra
High Temperature processing milk that
is packaged and can be preserved for a
longer time).
VAPs
According to the IRS report, the VAPs
business in dairy is growing at a CAGR
of 24 percent, though other dairies are
not keen on the Parag way just yet.
Reddy of Creamline Dairy says,
While we have introduced a number
of VAPs, 75 percent of our business still
comes from the liquid milk business.
Reddy had also seen the trend that
Shah had noticed long ago. In the
coming few years, Creamline too is look-
ing at shifting this ratio to a 65 percent
from liquid milk and the rest from the
VAPs business.
BK Arpan, Senior Consultant, Food
and Beverages of the IMARC Group,
Foreign players will have to depend on Indian dairies
for a number of things. So we expect a lot of mergers and
acquisitions to take place.
K. Bhasker Reddy, Managing Director, Creamline Dairy

H
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N
I
a management strategy and market
research organization, says that in
the overall Indian dairy industry,
milk is still the main business for most
dairy companies.
The demand for milk is much higher
than the demand for VAPs. While that
demand is growing, in 2012, 60 percent
of the overall dairy market in India in
terms of volumes was based on the fresh
milk business, he says.
But here is the catchmargins in the
fresh milk business are significantly
lower than in the VAPs business, Girish
Nadkarni of IDFC Alternatives, an inves-
tor in Parag Milk Foods tells us. Retail
prices of milk in India are very low
whereas the production cost is rather
high. So just being in the milk business
doesnt give a company very big margins
when compared to the VAPs, Arpan of
IMARC says.
Deal a dozen
In 2008, Parags potential was recog-
nized when Motilal Oswal Private Equity
invested `60 crore in the company. In
2012, IDFC Alternatives invested `155
crore partially buying out Motilal
Oswals stake in the company.
In 2013, the company also raised $17
million from the International Finance
Corporation. The Motilal Oswal deal
was the kicker that Indias dairy indus-
try needed. From then on, deals have
rained in the growing sector. In 2010,
Carlyle Group invested `110 crore in
Tirumala Milk Products. A release from
Carlyle in January this year confirmed
that France based Lactalis had acquired
a 100 percent stake in Tirumala.
Also in 2012, Cargill Ventures
invested $20 million in Dodla Dairy
and Ambit Pragma invested an undis-
closed amount in Neo Anurena Tristar
Food Products Pvt. Ltd.
In October 2013, Hatsun Agro had
announced the acquisition of dairy
products manufacturer Jyothi Dairy,
where it was to invest `65 crore to buy
the stake and make fresh investment
thereafter.
Earlier that year in February, Nestle
entered into an agreement to acquire
a 26 percent stake in dairy prod-
ucts player Indocon Agro and Allied
Activities Pvt. Ltd. for an undisclosed
amount. In August, it was reported
that Prabhat Dairy received `140 crore
from Rabobank Group-supported India
Agribusiness Fund and French develop-
ment finance institution, Proparco.
According to Rabobanks report
on Indias dairy industry released in
HOW ARE
INDIA'S DAIRIES
DOING?
`3692
CRORE
KWALITY DAIRY IN 2012-13
`1,000
CRORE
PARAG MILK FOODS IN 2012-13
`800
CRORE
CREAMLINE IN 2012-13
`1606
CRORE
HERITAGE IN 2012-13
`2165
CRORE
HATSUN IN 2012-13
BIGGER BUSINESS: Devendra Shah
Source: CRISIL Research, 2012
IN FOCUS

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P
H
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O
September 2013, the deals are going to
keep on coming.
The time has come for global players
to start engaging with one of the largest
volume dairy markets in the world. The
Indian dairy market is complex, partic-
ularly for foreign players and past fail-
ures indicate that getting the strategy
and timing of entry right is challeng-
ing, it said.
Rabobank expects this trend will
gain momentum over the next four to
five years driven by increasing consump-
tion of VAPs and the formalization of the
value chain, the report said.
Who wins?
As international players come into the
market, Reddy of Creamline says that
there will be an advantage as far as
technology is concerned. There will
be newer products in the Indian market
and local players will have to step up
their game. Having said that, Reddy
feels that foreign players are not some-
thing Indian companies need to worry
about. These foreign players will
have to depend on Indian dairies for a
number of things. So we expect a lot of
mergers and acquisitions to take place.
Sri Kumar Misra, MD and CEO of
Milk Mantra, an Orissa-based startup
in the dairy industry, says that there is
a much wider product portfolio abroad.
They can bring in expertise on increas-
ing shelf life of products. But on the
supply side, the Indian players will have
a stronghold.
According to Shah of Parag foods,
the ultimate beneficiary would be the
Indian consumer. I dont see any chal-
lenges coming from more international
players immediately. In four or five
years, the dairy industry in India will
look different, he says.
Nadkarni of IDFC gives a thor-
ough outlook on how the sector may
evolve. There will be consolidation
and international standards of qual-
ity and hygiene will come in. But it
will be a long haul for foreign players,
he predicts.
He points out how international
players like Danone have spent a lot of
money on advertising.
It is difficult for them to under-
stand the Indian psyche. MNCs have
their own intelligence from operating in
foreign markets but most of that doesnt
apply to India. Besides procurement
and distribution, they will have to
depend on Indian players for getting
an understanding of the Indian custom-
ers, says Nadkarni.
FARM-MILK-FARM
Driven by rising incomes and
population growth, NEARLY
17 MILLION more rural house-
holds bought milk and milk prod-
ucts in 2009-10 as compared to
2004-05, taking the proportion
of rural households purchas-
ing milk and milk products to 80
PERCENT IN 2009-10, almost
5 PERCENTAGE POINTS
HIGHER THAN 2004-05
Rural per capita (annual)
consumption of milk in 2009-10
WAS 49.4 LITERS versus 64.3
LITERS in urban areas. Rural per
capita consumption of milk, eggs
and proteins continues to remain
lower than its urban counterpart
Even if the share of rural house-
holds purchasing milk remains
at the 2009-10 level, another 17
MILLION MORE rural house-
holds would purchase milk and
MILK PRODUCTS BY 2014-15
THE UPSTART: Sri Kumar Misra
Source: CRISIL Research, 2012

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f we used a pyrometer to measure
the evolution of the Indian startup
ecosystem, it probably would
have cracked by now. At a macro
level, the entrepreneurial landscape
is evolving rapidlystartup activ-
ity is on an all-time high, there is
more angel and seed money than
ever before, there is greater social
acceptability of entrepreneurship and
there is a surge in efforts by institu-
tions like NASSCOM and TiE (even
the government!).
A natural outcome of these forces
has seen a number of accelerators
starting in Indiabuoyed on by west-
ern success stories like Y Combinator,
500 Startups, TechStars and AngelPad.
To be precise, there has been a four-
fold increase from a handful of five-
six accelerators that existed a couple
of years ago in the country.
Sameer Guglani, Founder of The
Morpheus, one of Indias earliest accel-
erators (set up in January 2008), says
that awareness about accelerators is
high now in the big cities.
It was at zero percent when we
started. There is a clear category now
one recognized by media, investors and
startups alike, Guglani says.
Pankaj Jain, India Venture Partner,
500 Startups, says that the rise of
accelerators in India has been driven
by opportunity and the availability of
capital. There has been an increase
in the amount of risk-capital available
in India and those with access to that
capital have been figuring out ways
to deploy it in a structured fashion,
says Jain.
500 Startups is a US-based accelera-
tor set up in Mountain View mid-2010.
The accelerator claims that 25-30
percent of its portfolio companies are
from international marketsIndia
being one of them since late last year.
We believe that an accelera-
tor is about the development of
Indias startup ecosystem is seeing a spurt in the number of accelerators, which are
helping shape and nurture its entrepreneurial landscape
SHONALI ADVANI
Awareness about accel-
erators was at zero percent
when we started. There is
a clear category nowone
recognized by media, inves-
tors and startups alike.
Sameer Guglani
Founder, The Morpheus
The
Hatcheries
IN FOCUS
entrepreneurs. There is an academic
part of entrepreneurship and we
wanted to bring it back to basics and
teach people the fundamentals of doing
business, says Lalit Ahuja, Founder,
Kyron, a Bengaluru-based accelerator
launched in December 2012.
Rajesh Sawhney, Founder of GSF
Accelerator, part of the GSF platform
set up in September 2012, tells us that
they see themselves as a feeder to
venture capital (VC) ecosystem. We
take small stakes in our companies
and prepare them for the big play. We
enjoy a great relationship with the VC
community and see them as our friends
in building great companies.
For some like TLabs, owned by
Times Internet, the digital arm of
media giant The Times Group, setting
up a tech-focused accelerator was
a clear opportunity to build technol-
ogy in-house.
The DNA of Times Internet is tech-
nology. We consume a lot of technol-
ogy and we can now build it in-house.
Also, we wanted to support innovative
technology startups. We cant hire all
technology talent, but we can help with
distribution and be their first custom-
ers, says Abhishek Gupta, General
Manager, TLabs.
Boomtown
To be precise, when we talk of accel-
erators, we are talking of technology
or technology-led businesses.
According to some, the current situ-
ation is not different from the 90s when
NIITs cropped up by the dozen with
everyone wanting to be a program-
mertoday being an entrepreneur is
far easier as the barriers to entry are
much lower.
The numbers speak for themselves.
On an average, the better crop of accel-
erators receive 1,000 applications
annually with Bengaluru, Mumbai,
and the National Capital Region (NCR)
topping the list.
Most candidates are in the age
bracket of 23-28 years. Of these
applicants however, approximately
only 20 startups make the cut and
graduate annually.
Speaking with other accelerators
in India, I have found that they are
quite impressed with increasing qual-
ity of applications and performance of
the companies after graduating, says
Jain. However, experts want everyone
to exercise caution as not everyone can
weather the uncertainty entrepreneur-
ship eventually brings.
You can go running in like a fool,
or be taught how to walk the walk.
That s where accelerators have a
big rolethey map out new terri-
tory youre going to, says Larry
Glaeser, CEO, Whatif Innovations and
ex-co-founder of Kyron, on the pent
up demand.
Typically, an accelerator runs two
batches a year, each for three-four
months. They invest a small amount
for an exchange of equity and offer
basic infrastructural requirements and
services which a company needs.
More importantly, they open doors
and dialogue with industry profes-
sionals, domain experts, investors
and potential customerssome of who
play the role of mentors and advisors to
these startups.
What you get
While some like The Morpheus and
Mumbai-based VentureNursery take
in applicants at the idea stage, others
like TLabs and Kyron require a basic
prototype and some progress.
Anant Kochhar, Founder of Yippster
Technologies, a micropayments player,
went through the TLabs program
in August 2013, three months after
launching the company.
Validation of the idea apart, Kochhar
and his Co-Founder Tashina Singh had
milestones they wanted to achieve and
so opted to go through an accelera-
tor, tying up with telecommunication
companies and getting customers.
A primary reason for that was
because we wanted some kind of backing
behind us. TLabs is exceptional because
it has Times Internet behind it and
We wanted to support
innovative technology start-
ups. We cant hire all tech-
nology talent, but we can
help with distribution and
be their first customers.
Abhishek Gupta
General Manager, TLabs
everyone in the industry knows them,
Kochhar mentions. Yippster today
is live with Airtel and the other
four top telcos have signed up, we
are told. From zero revenues it
has got three merchants on board
as customers. Singh says that for a busi-
ness like theirs, TLabs was critical as it
let them interact with other businesses.
My biggest takeaway was to
manage the anxiet y of running
my own startup, Kochhar adds
reflective of the benefits of a peer-to-
peer environment.
Times has a distribution advantage
as compared to others. We can show-
case our startups in a way no other
accelerator can, Gupta boasts.
TLabs has finished four batches
translating to 23 companies who
have graduated since the first in
February 2012.
Of these, two have shut, two
acquired, and nine have just graduated
as of end 2013. With the balance 10,
60-70 percent have been seed funded
with `50 lakh to `2 crore.
One size fits all?
Whether an entrepreneur decides to
go through the rigor of an accelerator
program or not is a question of indi-
vidual preference, say people in the
industry. However, the question entre-
preneurs really need to ask themselves,
they say, is if it is worth their while?
Sometimes accelerators are expen-
sive. Youre giving away seven to ten
percent of your company. There has
to be a return on investment and
that is an appraisal you need to do,
Glaeser states.
Those running accelerators feel that
the intangible benefits overshadow
everything else.
For one, it accelerates an entre-
preneurs thinking and time taken
to do thi ngs. Startups are al l
about agilit y, notes Gupta, who
believes accelerators help in creat-
ing discipline, while Ahuja calls it a
sanitation check.
However, as Ravi Kiran, Co-Founder,
VentureNursery, points out, an acceler-
ation program does not guarantee either
business success or capital, but it can
clear thinking.
We have seen startups refine
their idea, understand customers
better, learn to focus and tweak their
business model because of inputs
received from our advisors during
the program, says Kiran.
VentureNursery, set up in March
2012, has completed three batches
so far. A total of ten companies have
graduated so far.
Guglani who has worked with 82
companies over 10 batches at The
Morpheus feels though the ecosystem
offers plenty of resources todayaccel-
erators give entrepreneurs a tailor-
made network, otherwise tedious
to build.
At Kyron, two batches have gradu-
ated so far, of which 50 percent got
funded in pre-Series A rounds.
According to Sawhney, 24 companies
have graduated from GSF. From their
first batch of 13 companies, 10 have
raised additional rounds of financing.
We believe that an accel-
erator is about the develop-
ment of entrepreneurs. We
wanted to bring it back to
basics of entrepreneurship
and teach people the funda-
mentals of doing business.
Lalit Ahuja
Founder, Kyron
31%
OF INDIAN ENTREPRENEURS READY
TO GIVE AWAY 2-5% EQUITY FOR
MENTORSHIP
17%
ARE READY TO PART WITH 5-10%
EQUITY FOR MENTORSHIP AND THE
BALANCE ARE READY TO GIVE 0.1-2%
63%
ARE READY TO PART WITH 2% EQUITY
FOR CUSTOMER CONNECTS
52%
ARE WILLING TO GIVE 2-5% EQUITY
FOR INVESTOR CONNECTS
BALANCING ACT
Source: NextBigWhat Insighrts
IN FOCUS
We have exited from two companies:
Playcez is sold to IndiaMART and Little
Eye Labs to Facebook. From the second
batch of 11, five are in advanced talks
with investors to close seed or Series
A round of funding.
No stars
As rosy as these statistics appear, the
reality is that the 20 odd accelerators
operating today have not been around
long enough to develop a brand like Y
Combinator in the US or to show value
created. Therefore, it is early to say if
investors prefer investing in startups
that have undergone a program or not.
The upside for investors, however,
is that they get a filtered pool of
companies to select from before
doing their own due diligence, akin to
what IITs and IIMs of India do for the
corporate world.
Hal f t hei r work i s done,
Gupta says.
In our experience, VCs are primar-
ily committed to their investors and
look for good deals irrespective of
where they come from. That said, many
VCs are quite engaged with accelera-
tors and incubators, not just to invest
immediately, but to identify a future
opportunity early. They cant afford to
miss an opportunity, says Kiran.
Some VCs, Kiran goes on to say, have
complained that accelerators are not
producing startups ready for them and
that perhaps their argument is valid
from their perspective.
Almost all who we spoke with agree
that quality accelerators are sparse,
given how fast and wide the ecosystem
is growing.
The ratio is skewed towards ones
that are not. The people behind it have
to be of high quality. If I have to show
people the path to walk, I should have
walked it myself. Many accelerators
have quietly shut, Guglani reveals.
Money cannot bring satisfaction in
this business as there is no money to
make for six-seven years, he says.
We have not made any money
other than a few exits from the five
companies that we acquired. We have
not sold other stakes, Guglani shares.
The Indian accelerator model is yet
to pivot, Ahuja says. Right now its a
spray and pray model, Glaeser adds.
Pivoting now
A few like The Morpheus and Kyron
are addressing this by reworking
their models. Guglani says that The
Morpheus is morphing from an accel-
erator to a facilitator and shifting focus
away from new batches to help existing
companies more.
About 50-60 percent of our time
will be with portfolio startups. We
saw a more urgent problem to solve,
Guglani says, adding that two five-
year-old firms are also struggling
with issues.
January 2014 onward, Kyron intro-
duced a 16-month format spread over
three phases. In the first six months,
a large number of companies will
be taken in and given all tools and
resources to bootstrap and bring an
idea to life. Ten of these will go to
the next phase of four months for
intense acceleration.
After graduation, those who need
a bit more push, will put in another
six months and we will focus on key
problems areas. We will encour-
age bad choices to fail, Ahuja says.
This, he adds, ensures a low failure
rate, because they are cherry picking
companies. Alongside, its structur-
ing the mentoring system, matching
one mentor to one startup, unlike the
current model where a startup interacts
with many.
A mentor stays on with a team and
will be responsible for its success. We
are bringing in accountability at the
mentor level, Ahuja explains.
Additionally, industry profession-
als will come in as experts, and Kyron
intends on paying them a consultancy
fee to ensure commitment and continu-
ous engagement.
Entrepreneurs say mentors dont
have much time or dont show up,
Ahuja reveals.
Many VCs are quite
engaged with accelerators
and incubators, not just to
invest immediately, but to
identify a future opportu-
nity early. They cant afford
to miss an opportunity.
Ravi Kiran,
Co-Founder, VentureNursery
SPECIAL FEATURE
Theres a recognizable stable of qualities
and traits that are associated with the most
successful entrepreneurs. Weve put together
seven of these crucial attributes, along with
examples of people who have put them to use.
Perhaps youll see a bit of yourself here
JOE ROBINSON
SPECIAL FEATURE

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Do You Have What It Takes?
58 58 58 Intelligent Entrepreneur February 2014
Do You Have What It Takes?
E
nter entrepreneurial traits
into Google, and the menu of
frequent searches will complete
the query with of Steve Jobs
and of Bill Gates, among others.
These are the forces of nature that spring
to mind for most of us when we think
of entrepreneursiconic figures who
seemed to burst from the womb with
enterprise in their DNA.
They inspire, but they also intim-
idate. What if you werent born with
Jobs creative genius or Gates iron
will? Theres good news for the rest
of us: Entrepreneurs can be guided to
success by harnessing crucial attributes.
Scholars, business experts and venture
capitalists say entrepreneurs can emerge
at any stage of life and from any realm,
and they come in all personality types
and with any grade point average.
Contrary to conventional wisdom,
you dont have to be Type Athat is an
overachieving, hyper-organized work-
aholicor an extrovert to launch a
successful business. Type As dont
take the risks to be entrepreneurs,
says Elana Fine, managing director of
the University of Marylands Dingman
Center for Entrepreneurship, adding
that the same goes for straight-A
students. Very often its C students who
become entrepreneurs.
However, the best entrepreneurs do
share a collection of characteristics, from
tenacity to the ability to tolerate risk, that
are crucial to a successful venture. An
analysis of 23 research studies published
under the title The Big Five Personality
Dimensions and Entrepreneurial Status
found that entrepreneurs have different
personality traits than corporate manag-
ers, scoring far higher on traits such as
openness to experience (curiosity, inno-
vation) and conscientiousness (self-
discipline, motivation) and considerably
lower on neuroticism, which allows
them to better tolerate stress.
For a long time researchers focused
on innate psychological traits, such as
a need for achievement and a propen-
sity for risk-taking, in the belief that
SPECIAL FEATURE
entrepreneurs were an alien breed
from birth. But the data didnt produce
a strong connection to venture perfor-
mance. Today the emphasis is more on
practical and cognitive traits that help
entrepreneurs negotiate the risk-taking
gauntletqualities that can be taught.
One of the better road maps comes
from a University of Maryland study
that examined traits based on how they
contributed to new venture growth over
a six-year period. The authors, J. Robert
Baum and Edwin A. Locke, focused on
the characteristics needed to endure
extreme uncertainty, resource short-
ages and rapid change, and to translate a
vision and big ambitions into a real busi-
ness. Heres a look at key traits cited by
this study and other experts in the field.
Tenacity
Starting a business is an ultra mara-
thon. You have to be able to live with
uncertainty and push through a cruci-
ble of obstacles for years on end.
Entrepreneurs who can avoid saying
`Uncle! have a better chance of finding
their market and outlasting their inev-
itable mistakes. This trait is known by
many namesperseverance, persis-
tence, determination, commitment,
resiliencebut its really just old-fash-
ioned stick-to-it-iveness.
Tenacity is No. 1, says Mike
Colwell, who runs Plains Angels, an
Iowa angel investor forum, and the
accelerator Business Innovation Zone
for the Greater Des Moines Partnership.
So much of entrepreneurship is dealing
with repeated failure. It happens many
times each week.
When failure happens, you have to
start all over again. Jett McCandless was
a partner in a fast-growing freight logis-
tics operation. But the rapid expansion
triggered mistakes, including an invoic-
ing glitch that left the company with-
out enough cash reserves. The business
had to be sold for a fraction of its value.
McCandless didnt agree to the terms
and was fired. He lost the company
house and car and wound up moving
into his girlfriends apartment. It was a
very tough time, he recalls. I came very
close to going bankrupt.
He went on 25 job interviews and got
offers for logistics positions paying
$200,000 and up. But McCandless, who
grew up in Section 8 public housing,
wondered, Should I take a comfortable,
secure job, or could I build something
better? I was afraid that failure could
define the rest of my life, and I wasnt
going to let that happen, he says.
So rather than accept one of those big
offers, he started over, founding a new
company, CarrierDirect, in Chicago.
Hamstrung by the non-compete contract
with his previous firm, he created a
wholly new space in the logistics field.
Instead of matching shippers with truck-
ers, he switched to consulting, providing
marketing and sales for logistics compa-
nies. In two years CarrierDirect grew to
$35 million in revenue. Im glad I didnt
take one of those corporate jobs, he says.
Passion
Its commonly assumed that success-
ful entrepreneurs are driven by money.
But most will tell you they are fueled by
a passion for their product or service, by
the opportunity to solve a problem and
make life easier, better, cheaper.
Most entrepreneurs I know believe
they will change the world, says Jay
Friedlander, a professor of sustain-
able business who works with entrepre-
neurs at the College of the Atlantic and at
Babson College. Theres an excitement
and belief in what theyre doing that gets
them through the hard times.
Passion based on your companys
specific mission is an intrinsic drive
that provides the internal reward that
can sustain you between paydays. John
Roulac is passionate about hemp, which
has a host of industrial and food uses
and can be grown without herbicide,
making it a keystone crop for sustain-
able agriculture.
With a mission of providing a new
market for Canadian hemp farm-
ers, Roulac launched his company,
Nutiva, in 1999 with a hemp food bar.
But he quickly ran into interference
from US Customs officials who associ-
ated hemp, part of the cannabis family,
with marijuana. Initially, they tried to
harass us, Roulac recalls. They would
say our products couldnt leave the ware-
house; then they could. It was very hard
to stay in business.
Two years later the Justice
Department published a rule that put
hemp products in the same illegal cate-
gory as heroin. It was either, go out of
business, keep going or go to jail, he
says. It could be bankruptcy or humil-
iation. Roulac had more than $100,000
invested in the business by this point. A
lot of people told him to quit. Instead, he
decided to go on the offensive and sued
the Drug Enforcement Administration.
With support from the natural-products
industry, particularly soap company Dr.
Bronners, he won the suit two years
later. Roulacs belief in the power of his
mission had prevailed.
I believed that I was on the side
of truth and that there was a govern-
ment agency trying to prevent some-
thing good happening for the country,
he explains. I feel at a core level that
this is my destiny to help create a better
food system. Today Nutiva sells a vari-
ety of organic products, from hemp
protein shakes to virgin coconut oil.
Roulacs advice when things get tough:
Dig deeper.
Tolerance of ambiguity
This classic trait is the definition of risk-
takingthe ability to withstand the
fear of uncertainty and potential fail-
ure. It all boils down to being able to
successfully manage fear, notes Michael
Sherrod, entrepreneur-in-residence at
the Neeley School of Business at Texas
Christian University. He sees the abil-
ity to control fear as the most important
trait of all. Fear of humiliation, fear of
missing payroll, running out of cash,
bankruptcy, the list goes on.
Jill Blashack Strahan knows the fear
factor. The founder and CEO of Tastefully
Simple, a direct-sales company for gifts
and easy-to-make meals, remembers
the calls to her bank when she was three
months overdue on her mortgage. That
fear that I would lose my house almost
controlled me, says Blashack Strahan,
who also had to overcome the deaths
of her brother and then her husband
shortly afterward. The night after the
JOE ROBINSON is author of Work to Live and the
Email Overload Survival Kit
funeral of my husband, I thought maybe
I should give up, get a job and be a mom.
This is where the ultimate entrepre-
neurial test takes place, on the mental
battlefield. You can go with the fear and
quit, or push through it. I said no; this
idea is going to work, Blashack Strahan
says. We have the power to control our
thoughts. When we commit mentally,
our action follows.
She made a conscious decision to
push through the fear. Her company had
sales in 2012 of $98 million. While many
would feel powerless in the face of such
adversity, the entrepreneur looks at the
situation and knows he has some control
over the outcome, says Jonathan Alpert,
a psychotherapist and author of Be
Fearless: Change Your Life in 28 Days.
Vision
One of the defining traits of entrepre-
neurship is the ability to spot an oppor-
tunity and imagine something where
others havent. Entrepreneurs have
a curiosity that identifies overlooked
niches and puts them at the forefront of
innovation and emerging fields. They
imagine another world and have the
ability to communicate that vision effec-
tively to investors, customers and staff.
Many people would be satisfied with
a couple of successful businesses, but
Eldad Matityahu saw beyond his two
thriving frozen-yogurt stores. Hed been
reading about the fiber-optic space and
decided he wanted in on the technology
sector that surrounded him in Silicon
Valley. So he sold his yogurt shops and
his Harley and got into a field he knew
nothing about. He took a job with a fiber
optic company to learn the business and
discovered his niche there.
Customers told him they were frus-
trated that they couldnt have access to
see who was on their networksimpor-
tant for security. I realized there was no
solution on the market addressing this
pain point, Matityahu says. I took the
time to figure out why.
The products Matityahu created
made activity on the network easily visi-
ble and also protected the system. He
bootstrapped his company, Net Optics,
with $100,000the proceeds from his
two yogurt stores and Harley (along
with a small investment from family
members) turning down venture capi-
talists along the way. In October 2013,
he sold the company for $190 million.
Entrepreneurs often face naysay-
ers, because we see the future before
the future plays out, Matityahu says.
You have to be several steps ahead of
the market.
Self-belief
Self-confidence is a key entrepreneur-
ial trait. You have to be crazy-sure your
product is something the world needs
and that you can deliver it to overcome
the naysayers, who will always deride
what the majority has yet to validate.
Researchers define this trait as task
specific confidence. Its a belief that
turns the risk proposition around
youve conducted enough research and
have enough confidence that you can
get the job done, that you ameliorate the
risk. You have to have a lot of self-confi-
dence. Be willing to take a risk, but be
conservative, says Jason Apfel, founder
of FragranceNet.com, an e-commerce
site or beauty products.
Apfel didnt know anything about
the beauty world when he started the
company, but he believed he could create
a solid website to sell such products. I
thought selling a commodity online at
the most competitive price would work,
he says. His company has outlasted
well-funded competitors and sees $145
million in annual sales.
Flexibility
Business survival, like that of the species,
depends on adaptation. Your final prod-
uct or service likely wont look anything
like what you started with. Flexibility
that allows you to respond to changing
tastes and market conditions is essen-
tial. You have to have a willingness to
be honest with yourself and say, This
isnt working. You have to be able to
pivot, says Colwell of Plains Angels.
While still a student at Babson
College, Matt Lauzon wanted to digitize
the process of designing personalized
jewelry. After raising $500,000 from
Highland Capital Partners, he launched
a custom jewelry design platform for
retailers in 2008; however, a year later
there was no payoff in sight. In theory,
it was a perfect match, but in practice we
found that we simply couldnt change
the jewelers focus on selling the expen-
sive inventory they had sitting in their
display cases, Lauzon recalls.
He reached out to his jeweler custom-
ers to solicit feedback. One of them
actually said, You have built something
so amazing, with so much potential, you
should let people use it directly, he says.
Lauzon decided to do exactly that,
and with additional rounds of financing,
relaunched the Boston-based company
as Gemvara.com, selling the custom
jewelry experience directly to consum-
ers. He wont disclose sales, but he
has raised $51 million to date, includ-
ing additional millions from Highland
Capital, which backed his initial concept.
He has even hired away executives from
the jewelry worlds biggest retail force,
Tiffany & Co.
Rule-breaking
Entrepreneurs exist to defy conven-
tional wisdom. A survey last year by Ross
Levine of the University of California,
Berkeley, and Yona Rubinstein of the
London School of Economics found that
among incorporated entrepreneurs, a
combination of `smarts and ``aggres-
sive, illicit, risk-taking activities is a
characteristic mix. This often shows up
in youth as rebellious behavior, such as
pot-smoking. That description would
certainly hold true for some of the most
famous entrepreneurs of recent years.
In fact, simply starting a busi-
ness breaks the rules, as only about 13
percent of Americans are engaged in
entrepreneurship, according to a Babson
College report. Doing what the majority
isnt doing is the nature of entrepreneur-
ship, which is where the supply of inner
resources comes in.
Are these traits in you? Theres only
one way to find out.
Entrepreneur Inc. All rights reserved
IN CONVERSATION
Tying in the self-interest
is the most sustainable
way of doing CSR in India
Gaurav Gupta, Partner and Regional Director, Asia, Dalberg, a strategic advisory firm, talks to
Shruti Chakraborty about the work the organization does in India and how he sees things changing
with companies starting to spend the mandatory two percent on CSR
GAURAV GUPTA
Regional Director , Dalberg
Earlier, CSR was being
executed in a whimsical
manner in India Inc.
Q: Gaurav, you started the India opera-
tions for Dalberg in 2009. And the firm
has been around for more than a decade
globally in the social development
sector. Can you tell us a bit on how
Dalberg views India from a social
development angle?
A: India is interesting because it is a
very different economy to the tradi-
tional developing economy. For the gen-
eral day-to-day development challenges
in Africa, there is a whole aid economy
is presentwe have the UNICEFs and
IFCs of the world coming in with a lot
of money. That doesnt happen as much
in India.
India, on the other hand, has a
relatively strong home-grown market
and is therefore a very different market
for us. Here, we have focused on some
interesting areas. We have done a lot
of work in healthcare, where we have
looked at helping policy makers think
about how they look at the sector.
We have looked at nutrition and
diabetes for companies in the pharma-
ceuticals and food sectors. We have had
to look at different things in that sense
over here.
Q: But much like African economies,
India too has a huge Bottom of the
Pyramid (BoP) segment.
A: The Indian bottom of the pyramid
market is a large market but people
often dont understand how to crack it
and companies turn to someone like
Dalberg because our focus is on working
with the poor.
We work with businesses that want
to make a social impact or those that
want to understand how they can
make their products more effective for
customers at the bottom of the pyramid.
We have worked with electronics
manufacturers to help make solar light
for BoP customers and understand how
to develop a price at which to distribute
their product amongst other projects.
Essentially, whats different about
Dalberg is that its an organization
that says we are a for-profit but we
only work on issues that impact the
poor. We say we are for-profit but not
profit maximizing.
Q: Let me ask you about the most
pertinent topic in the developmental
sector right now. What is your opinion
of the CSR mandate? How do you think
companies can approach it best so as to
help both society and themselves make
the most of it?
A: It is a brave move to make it manda-
tory for companies to spend this two
percent of their profits on CSR. We are
seeing CSR as an interesting way of
making social investments that have
business value.
But should businesses think of things
that benefit them while fulfilling the
CSR mandate too? Yes. Absolutely. We
want businesses to tie these things
much more closely to their agenda.
Otherwise it becomes whimsical.
The more strategically you think
about CSR, the more you can start to
think of creating a business impact
while creating a social impact.
Companies should try and focus on
areas that leverage their strengths and
JOSHUA NAVALKAR
de-risk some of the issues that
they create.
Q: Because there will be a lot of grants
flowing into sectors that social
enterprises have been building busi-
nesses in, what do you think will be the
impact of the CSR mandate on the
social enterprises?
A: It has been seen that if a guy selling
solar lanterns to BoP customers has to
compete with an NGO backed by grant
funding which is just giving them away
for free, it just destroys the market for
the first guy.
It doesnt actually allow the enter-
prise model to work. A crowding out
effect happens.
What happens when this huge
balloon of money comes into this
space? It could possibly destroy the
market for a lot of social enterprises.
Social enterprises are a part of what is
covered under the CSR mandate. But
the accounting of it is totally unclear. If
you give money to an enterprise, not as
an investment but as a grant, it anyway
changes the model from being an
enterprise model.
Having said that, many of the sectors
that the social enterprises operate in
today cannot thrive on the for-profit
model alone.
IN CONVERSATION
Regulations and
compliance bodies are
actually what cause the
corruption; they dont
solve any problems.
Q: When corporates get involved with
the social sector, do you think the
impact will be sustainable and entirely
positive? Or do you think that at some
point the business interest will prevail?
A: We have several companies in Japan
whose main work or business interest is
in social welfare. One firm we worked
with was involved in electrification
and another in developing low-cost
toilets. There is a very clear social angle.
There was a real business angle even
in a disabilities program we worked
on. Businesses want to know how they
can reach 95 percent of the population
because most of them currently serve
only five percent of Indias population.
Its not at the program level that they
are thought of separately...its how they
are funded.
For a pharmaceutical company for
instance, the CSR and business develop-
ment heads came together to work out a
budget. We are increasingly seeing CSR
as an innovation lab rather than as a
straight out charity.
Major electronics manufacturers
have the technology to light up areas
with low-cost methods and they are
using their CSR arms to test their prod-
ucts in these markets. Earlier, CSR was
being executed in a whimsical manner
in India Inc. One day the CEO wants to
support blind people, the money goes
to a blind peoples foundation. A new
CEO has different priorities, the money
goes in another direction. This process
is inefficient.
Businesses need to realize that a
social impact is important and it can
lead to a business impact. The more you
think like that the more sustainable this
will be.
A large drinks manufacturer focus-
ing on schools is silly. These companies
use a huge amount of ground water
and run some of the most sophisticated
logistics. There are so many issues in
India which could be resolved with bet-
ter logisticsclearly those companies
should be working on those kinds of
issues. When you disconnect the self-
interest, its not sustainable. The only
way otherwise to do it sustainably is to
create a third party foundation. Tying in
the self-interest is the most sustainable
way of doing CSR in India.
Q: There are a lot issues around execu-
tion. There isnt going to be anyone
regulating the execution according to
the law. So what makes us confident
that companies will adhere?
A: I am a highly critical person of
regulations and involvement of govern-
ment in general, but I have to say, there
is something clever about this.
Firstly, regulations and compliance
bodies are actually what cause the cor-
ruption; they dont solve any problems.
I think what they have said is, Here are
some guidelines and you have to publish
what you do. They have left it to civil
society to say, Youre earning billions of
dollars by taking gas out of the ground
and thats what you have done on the
social side? Look at all these other
companies doing CSR.
If you build a private temple for your
family using the two percent, you will
have to declare that. It is then up to
us; also there will be many NGOs who
will look to scrutinize what some of the
bigger companies do.
I am not saying its perfect. But its
not a bad idea. Also, three board mem-
bers have to be a part of this. Its their
signature that goes on this report. They
are already starting to think about the
how, which is what the whole conversa-
tion needs to be about.
Q: Besides working with major compa-
nies on cracking the BoP market and
on CSR, what kind of work has Dalberg
done with social enterprises in India?
A: We do a lot of work with social
enterprises. Social enterprises often
cant afford our kind of fees but we are a
mission-driven organization; if we find
an interesting business and an exciting
problem to solve, we find a way to work
together. We have worked with a lot of
exciting social ventures in India like
Husk Power Systems. We executed their
expansion strategy.
We have also worked with NGOs
like the low-cost schools organization
Shikshana, where we worked on a
management reporting system that
could help them track their impact and
expand. We have also worked with
entrepreneurs providing access to clean
water, and mini-grid operators.
Autosmart.indd 202 17-06-2013 17:09:00
66
Gray Matters
F
irst of all, we have to come up
with a better word for whatever
this is. Brain-picking sounds like
a medieval surgeons treatment
for foot cramps. It sounds misguided
and painful. Probably lethal. And its
a strangely off-putting term for what
is almost always a delightful experi-
ence, both for the picker and the pickee.
(Which are also off-putting terms and
which I wont be using again.)
How to pick a brain: The first rule of
brain-picking: It shouldnt require your
mentor to actually think. You should ask
only for something that is pre-made and
ready to be handed over: basic knowl-
edge. What the service does not include
is recommendations. Brain-picking is
meant to be a passive exercise on the
experts part. If youre asking for recom-
mendations, then you are forcing your
subject to work. Offering a recommen-
dation involves analysis and decision-
making. Decisions are hard. Decisions
are work. Dont ask your subject if you
should switch careers. Ask about the
career youre considering switching to.
Dont ask your subject if you should go
work for so-and-so. Ask your subject
what kind of person so-and-so is to work
for. Dont ask your subject if you may go
to the restroom. Ask your subject if he
or she knows where the restrooms are.
(You really shouldve taken care of this
before the meeting.) Ask questions that
are easy to answer but that you just dont
know the answer to.
Keep it short. Request about 15
minutes of their time. Youll probably
get 30, but ask for 15. Says Alex Iskold,
founder and CEO of GetGlue, a social
network for TV, movie and sports fans,
If someone asks me for something
thats in my area of expertise, and if its
someone I know or someone referred
to me by someone I know, and its 10,
15 minutes, half an hour, I think thats
reasonable and totally fine, and if I have
the time, Im happy to be helpful. Its all
about time.
Before making the request, ask your-
self why this person would want to help
you. The answers should be: because it
will be easy, because you want to do what
they do at some point in your career,
because it allows them to do a gener-
ous thing and because whatever mutual
connection you share is an important
one (you went to the same school, you
work in the same building, you were at
the same conference, you both seem to
enjoy doing inventory). The point is to
give them a reason to help you.
I tend to prioritize people in college
who are trying to become their own
entrepreneurs. Its a personal prefer-
ence; these are people that inspire me,
says Chantel Waterbury, founder and
CEO of Chloe+Isabel,a New York-based
jewelry company. And if someone needs
branding advice or design or product-
development advice, I always take those
calls, because I know its an area in which
I can add a lot of value.
What brain-picking means to the
mentor: The main force at work with
brain-picking could be described as the
ecstasy of consultancyan unacknowl-
edged but crucial factor in business. The
one being consulted gets to yammer on
in relatively simple terms about some-
thing involving their area of expertise.
Questions should begin with
phrases like:
Could you tell me about How did
you When you were in my posi-
tion
Questions should not begin with
phrases like:
Can I have Can you help meWill
you excuse me while I tweet that
Im hanging out with you
Question should never, under
any circumstances, contain the
following:
If youll allow me to tell you the
story of my career. It all started
What, you think youre better than
me or something? Now for the
lightning round Can I just have a
damn job, dude?
How to ASK QUESTIONS
SUCCESS STRATEGY
The Esquire Guy wants to pick your brain
ROSS McCAMMON
KEY TECHNICAL
MATTERS
Never ask for more than 15
minutes of a persons time.
Youll probably end up with 30,
but never ask for more than 15
When making a brain-picking
request, frame it in terms of
your subject: Id like to ask you
about your career. Not Id like
to ask you about my career
Be as accommodating as possi-
ble: Im available next week.
Not Im available Thursday.
And denitely not I can
squeeze you in from 8 to 8:15
Be courteous: I would be grate-
ful for your time. Not You
gotta help me out here
And certainly not: YOU GOTTA
HELP ME OUT HERE!
Theres no need to praise the
person. Your request to pick
their brain is praise enough
Never ask a mentor to help you
make a decision. Consultants
make decisions. Which is why
consultants get paid. Mentors
give feedback
Be grateful but not obsequious.
Youre not beneath the other
person. Youre just a little less
experienced in a certain cate-
gory of business
Remember that theyre getting
something out of it, too: attery.
And possibly a free coffee or
something. But mainly, attery
Remember to listen more than
you talk
And never interrupt
But dont just sit there
Really. Dont just sit there
[PAUSE]
For the love of god, ask a
question!
DON THE TABLET APP. Chris Philpots animated look at brain-picking
67
ROSS MCCAMMON is an articles editor at
Esquire magazine.
Which is easy and fun. (There is nothing
more satisfying than being the smart-
est person in the room, especially if
the room has only two people.) Says
Waterbury: There are people I reach
out to who are extremely seasoned
and working in their industry for 40,
50 years, and I feel sometimes like its
a one-way street, and I apologize, and
theyve said to me, I do this because it
invigorates me. I have to remind myself
that they are in fact getting something
from it, and Im not just taking.
The ecstasy of consultancy is really
just a social reward, as the psychol-
ogists put it. Social rewards are
powerful things.
We know that when you share your
experience with someone else, then
you activate the default network in the
brain, which is associated with a sense of
social connection, empathy and positive
reward, says Anthony I. Jack, assistant
professor of cognitive science, philoso-
phy and psychology at Case Western
Reserve University. When your brain
is being picked, he adds, this network
comes up, and the analytic/critical
thinking network gets suppressed, and
youre engaged.
Brain-picking is a form of intersub-
jectivity, the shared exploration by
two people of each others experiential
world. Youre getting social capital, but
youre sharing social capital, too.
The reason this kind of reward is so
powerfuland the reason why brain-
picking has become an important part
of businessis that youre allowing
another person to personally invest in
your success, if only temporarily. This
is an honor. And its uniquely flatter-
ing. Requests for consultancy could be
considered the most important measure
of success. Thats a powerful gift youre
giving someone. Brain-picking is an
even trade.
C
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What to Delegate
SUCCESS STRATEGY
68 Intelligent Entrepreneur February 2014 68
Eight
types of
tasks you
should
hand off
today
PAULA ANDRUSS
69
What to Delegate
W
hen Matthew Levey
launched his all-natural
beef-jerky company in 2010,
he and his two Co-Founders
rode their bikes to as many New York City
grocery stores as they could to conduct
in-store demos and sign up new accounts.
After signing up 60 stores in the first
month, the three realized that the strat-
egy was neither sustainable nor scalable.
We knew we needed to do demos to
create awareness and promote our brand,
says Levey, who runs Brooklyn-based
Field Trip Beef Jerky with Tom Donigan
and Scott Fiesinger. But we also knew we
couldnt spend five hours a day passing
out samples and still grow our business.
The entrepreneurs hired a sampling
team to market their products in stores,
a move that has helped their business
expand steadily. Today, Field Trip prod-
ucts are sold in more than 5,000 retail
locations nationwide.
Even though it was a very important
part of our business, delegating that job
to someone else freed up our time so we
could focus on growth and building our
bottom line, Levey says.
While multitasking may be necessary
in the earliest days of a venture, its impor-
tant to know when to let go of non-essen-
tial tasks so you can focus on the areas
that are necessary to build your business.
Here are eight types of tasks you should be
delegating in order to propel your startup
forward in the most efficient way.
1. Tasks that keep you from
growing your business
When Levey and his team realized that
the hours they spent on a bike en route
to product samplings were not enabling
them to scale to a nationwide platform,
they hired a demo team. Getting custom-
ers to trial something is important, but
we also realized it wasnt a good use of
our time, because it wasnt conducive
to our long-term growth, he
says. Independent contrac-
tors were brought on to
handle sampling and inform
customers about the products
nutritional facts; that freed
Field Trips founders to pursue
new accounts, which today
include several major grocery chains, as
well as JetBlue Airways, Vitamin World
and Costco.
2. Activities that will help
speed up cash flow
As a small company represented in huge
grocery stores with more than 50,000
SKUs, Field Trip found that its relatively
modest invoices often would get over-
looked. Checks for $100 get lost against
the $10,000 checks pretty easily, so we
were hounding the stores just to get paid,
Levey explains. The founders discovered
that hiring distributors not only got them
paid faster, it also enabled them to get paid
with a few large checks rather than many
small ones. The company now employs
more than 25 distributors. By delegat-
ing that work to distributors, our accounts
receivable have significantly improved,
as has the timing of our working capital,
he says. Were getting our money
faster, and were also getting checks
that were previously going unpaid
because we didnt have time to
follow up on them.
3. Areas that are out of
your wheelhouse
Ryan Fleming, Co-Founder
of Long Beach, California-based
RemindGrams.com, delegates tasks that
would require too much time for him to
learn and master. That is one of the factors
to which he credits the success of his 24/7
concierge service, which keeps a virtual
eye on the well-being of loved ones.
Fleming has turned to services such
as Elance and Fiverr to outsource web
design, creation of video and web content,
SEO, social media activities and PR. The
SEO stuff is well over my head, but when
you have someone who can help you
understand how the Google algorithm
works, its a game changer, Fleming says,
adding that he attributes many of his
companys 400-plus users to the success
of the keyword RemindGrams. It would
take me about five years to create [anima-
tion] online, so delegating out those types
of digital assets is a no-brainer for me. It
definitely pays for itself.
4. Tasks that are already
streamlined
Hard work goes into developing processes
that allow employees to increase their effi-
ciency while still meeting in-house qual-
ity metrics. But once those processes are
in place, theres no reason to be the person
who implements them on a day-to-day
LETTING GO: (from left) Tom Donigan, Matthew Levey and Scott Fiesinger

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SUCCESS STRATEGY
basis. After launching Venice, California-
based online inventory and order manage-
ment software Lettuce in 2012, CEO Raad
Mobrem saw his staff expand from two
people who did everything to 13 within
three months.
While exciting, the period was fraught
with organizational headaches and grow-
ing pains. So he divided the company into
sales, marketing, customer support and
product. In each of those areas, processes
were put in place so managers could easily
delegate tasks when needed. When
something needs to be done, we can
walk an employee through our current
processes and say, Heres what we like
to do, and this is how we do it. Its a clear
path of where were going and how we do
things, Mobrem says, noting that Lettuce
now has 15 employees and thousands of
users. As a result, we went from chaos
to really well-delegated processes and
tasks that everyone is able to complete in
a timely manner.
5. Tasks in areas with often-
changing regulations
Brian Fox, President and Founder
of Brentwood, Tennessee-based
Confirmation.com, is a CPA who tries to
stay up to date on the latest changes in the
field. But he says he wouldnt even think
about doing the accounting for his elec-
tronic audit confirmation services firm,
even in the leanest of the startup days.
The rules change so often that if youre
not in it day to day, youll miss something
from a tax standpoint or an accounting
application standpoint, he says. You need
somebody who does that as their full-time
job. Fox outsources his legal, accounting
and insurance needs to outside agencies
that are current on specific regulations.
Waverly Deutsch, professor of entrepre-
neurship at the University of Chicago
Booth School of Business, says delegat-
ing to a specialist is a good call when the
cost of making a mistake might be high.
When youre dealing with a government
agency like the IRS, EPA or immigration,
you dont have any power, and the risk of
doing it wrongand facing stiff conse-
quencesis enormous. Those are areas
where you definitely should delegate to
an expert, she says.
6. Projects that impede
development
While Fox enjoys the product develop-
ment side of his business, he has trou-
ble presenting his thoughts in enough
detail for a technology team to take over.
Instead, he hands off that part of the
process to avoid becoming a bottleneck
within his own operation. I was hold-
ing up our development, so we brought
in a product person that I could share the
idea with, but then they could do all the
legwork, he explains. Today the company
has a team that takes ideas for new prod-
ucts, enhancements and modifications
and writes detailed specs so the technol-
ogy team can create them.
7. Anything you want your
team to learn
Bob MarshCEO of Detroit-based Level-
Eleven, which creates motivational soft-
ware for sales teamssays one of the
best ways to get employees to internal-
ize something he wants them to learn is
to let them complete the task themselves.
While he could simply tell his sales team
how hed like them to do a specific task, he
finds that its more effective to ask some-
one to take the lead on the activity so they
can get the team together and come up
with best practices. It helps people inter-
nalize it, because theyve made their own
thoughts and decisions on it, Marsh says.
8. The stuff you simply
hate to do
Many treps agree that handing off the
tasks they cant stand helps them main-
tain their drive and enthusiasm, which is
critical to their companys success. After
all, thats why they work for themselves. I
really believe you should do the things you
enjoy and have fun doing, and delegate
the rest, says Fox of Confirmation.com.
Thats what excites you when you wake
in the morning, and what youre think-
ing about when you wake in the middle of
the night with a brand-new idea. Youre
thinking about how to grow the business.
Thats what gets you excited, thats what
gets you motivated, and thats what helps
you succeed.
IN THE STORE OR OUT
THE DOOR?
You know you should delegate.
But should you keep those
tasks in-house or outsource
them? Waverly Deutsch, profes-
sor of entrepreneurship at the
University of Chicago Booth
School of Business, suggests
asking the following questions
to decide whether to assign a
task to an employee or to an
external service provider:
Which will save me more
money? Outsourcing back-
ofce activities can be more
affordable for small compa-
nies that dont need full-time
resources dedicated to those
tasks. For example, if you dont
require full-time legal counsel,
it will be more cost effective to
pay only for the hours you need
from an outside lawyer. (The
same goes for an accountant
or insurance agent.) Once you
have enough volume, though, it
becomes more cost-effective to
pay somebody to do it in-house,
Deutsch says.
How integral is it to my value
proposition? Key activities that
are close to the core of the busi-
ness are the ones you should
most strongly consider keeping
in-house.
How much control do I want to
keep or give up? Outsourcing
to overseas tech advisors and
developers is appealingly
affordable, but, as Deutsch
points out, it also requires
dedicated management. That
kind of delegating actually can
hurt you, because you end up
with something architected by
someone you dont know, and
you arent sure whos going to
maintain it or what its going to
look like in the long haul, she
cautions. To make it
work, you still need to be
involved and spend time with
those developers.
T
he founder of Symphony
Ltd knows a thing about hot
and cold times. In 2002, the
company lay crippled with
losses of `31 crore and a total income of
only `28 crore. The blow was such that
the Ahmedabad-based firm had to regis-
ter itself with the Board for Industrial and
Financial Reconstruction (BIFR). Those
were the coldest of times. Today, the same
company is one of the largest air cooler
companies in India and perhaps the
world. Achal Bakeri, 54, the Chairman
and Managing Director of Symphony,
tells us that the story of the company is
one of the prime examples of how choppy
an entrepreneurial existence can be.
Bakeri, who studied architecture in
the US, came back to India in the late 80s
to help out with the then family business
of real estate. In the summer of 1987, my
family was shifting to a new house and
the heat was unbearable. Thats when my
father asked me to build a sophisticated
cooler, which looked exactly like an air
conditioner, says Bakeri.
That thought drove Bakeri to work on
an initiative on air coolers. Joining my
father was the main plan, building the
cooler was just an exciting project. I never
thought that I would build a company out
of it, he adds.
Bakeri was fortunate, in the sense
that he had access to infrastructure, capi-
tal and resources. He tells us that he first
developed 10 coolers that looked exactly
like window ACs. He priced them at
`4,300 as against those locally available
at only `2,000 and put out a full-page
Cool Runnings
The story of Symphony is of how one company made a formidable comeback
from the lowest of lowswhen no one gave them a chance
ASHNA AMBRE

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LEGACY
advertisement in the local papers to
create visibility for his new product. The
response to the coolers was boisterous.
Boom years
I knew I had built something unique and
had the confidence that it would defi-
nitely sell. So, I decided to scale it up,
says Bakeri who started the company
under the name Symphony Comfort
Systems. In 1988-90, he invested `30 lakh
in plastic injection moulds but eventually
outsourced the making of the plastic body
to various vendors, while carrying out
only the assembly functions in his facil-
ity. Bakeri recollects that the road was
not easy as coolers are not easy to build
and there were a lot of technology and
service-related glitches that were even-
tually taken care of. When we started
out, the market was highly unorga-
nized. There was also a cash-only model
in place and I ensured that a credit and
invoice based system was put in place,
he recollects.
In addition to this, dealers who sold
a number of electronic products in their
stores were skeptical about selling the
high-priced coolers. Hence, Bakeri spent
a lot on advertising to create consumer
awareness and visibility, which ulti-
mately led to demand creation.
By 1990, we were looking at strength-
ening and expanding our distribution
networks. We were supplying coolers to
Gujarat and a few neighboring states,
says Bakeri.
The Bakeri family also had a
strong presence in the textile busi-
ness and Bakeri leveraged on its
distribution channels and used it for his
cooler business.
By the end of 1990, the company had
sold over 21,000 coolers and registered a
turnover of over `11 crore. Over the next
few years, various models and different
sizes of coolers were created to cater to
consumer demands. The company sold
over a lakh coolers in 1994. After a period
of reasonable success, Symphony went
public the same year.
Expert advice?
We were doing really well, our competi-
tors were diversifying into other products.
Analysts advised us to do the same and
the next eight years turned out to be not
like we had expected, says Bakeri.
Buoyed on by analysts and experts,
the company diversified into producing
water heaters and washing machines
products that could use the same distri-
bution networks as the coolers. However,
these products failed in the market that
was already populated by multinational
names by then and the company incurred
searing losseswhich finally pushed it to
bankruptcy in 2002.
Bakeri admits to making mistakes
back then. He says that he launched
advanced technology water heaters and
water purifiers when the market was not
ready to accept the idea. Being ahead of
our times proved to be a constraint in our
case. All that was playing in in my mind
was how to make a comeback.
According to Bakeri, the BIFR assumed
that the company wouldn't survive and
would eventually fade away. But he and
his team chalked out a strategy to get out
of the situation as soon as possible. First,
they stopped producing all the other
products and decided to concentrate
only on coolersthe part of the business
that continued to do well. The company
has got back on track as it moved from a
multiple products-single geography strat-
egy to a single product-multiple geogra-
phies strategy and it has worked well,
says Rajan Vasa, a senior advisor with
KPMG India.
Back for good
Since 2004, the company has been export-
ing coolers to Latin America, South-East
Asia, the Middle East and other parts of
the world. Over the last five years, it has
established a strong global marketing
network in 60 nations. Export revenue
in FY13 stood at `35 crore and has been
growing at 35 percent.
Through a recent global acquisition
of a US-based air-cooling giant IMPCO,
Bakeri is now also going to focus on the
Indian industrial & commercial (I&C)
air-cooling business, which Bakeri claims
is a virgin market with a huge potential.
These industrial air-cooling machines
are being imported from the American
wholly owned subsidiary, which had
patented a cooling technology called
evaporative cooling.
Savan Godiawala, Senior Director
at Deloitte India, says that with techno-
logical advancements, manufacturing
companies are bound by environmental
and safety regulations to install cooling
mechanismswhich will only grow the
market for companies like Symphony.
KPMGs Vasa also points out that as a
company, Symphony has a clear focus on
its product. They have innovative tech-
nology and well-designed products both,
which are a key differentiator, he adds.
In the second quarter of FY14,
Symphony registered revenues and profit
of over `77 crore and `14 crore respec-
tively. Bakeri says the companys prod-
ucts are available in almost 4,500 towns
in India through a retail network of
over 16,400 plus dealers and that it has
installed industrial and ducted air cool-
ers in about 100 sites that include schools,
factories, malls etc.
Network expansion is one of the key
focus areas and Bakeri plans to further
expand the network. In the next two to
three years, we will focus on expanding
reach in semi urban and rural markets,
he adds.
Market size of air coolers
in India is estimated to
be around ` 1,000-1,200
crore growing at a steady
pace of 15-20% annually
Air-cooler penetration in
India is a mere 5%
The size of the expensive
air conditioner market
is estimated at 3.2
million units
Source: Symphony annual report FY13
GOOD SPELL
I
t started as a small project in a
hostel room of IIT Kharagpur in
late 2008. The basic premise was
to figure how reduce the strain of
flue gases on the environment. That
one day that project would be one of
the more important cleantech compa-
nies to come out of India was not some-
thing that Aniruddha Sharma, 26, and
Prateek Bumb, 27 ever imagined.
Sharma was a student of Statistics
while Bumb was a mining engineer in
training. But both had a passion for
environmental conservation. In casual
conversations, they often discussed
the enormous amount of CO2 released
from steel, sugarcane, power plants and
many such facilities. We often asked
ourselves what kind of technology can
solve this problem, adds Bumb. This
lead them to start the project, which has
since grown to Mumbai-based Carbon
Clean Solutions, a firm that special-
izes in treating pollutant gases, separat-
ing carbon-dioxide (CO2) from them,
and recycling it for commercial use on
a large scale, says Bumb, now CTO at
Carbon Clean.
Right formula
Working on the project, they devised
formulas to separate CO2 from the
mixture of gases emanating from chim-
neys. They decided to use these formu-
las for other industrial purposes. Gases
that the chimney emitted were green-
house gases that have maximum levels
of CO2, which is the prime cause of
pollution, points out Sharma, CEO,
Carbon Clean.
They were looking to create a chem-
ical solvent that could scrub CO2 from
the other gases and as a result separate
it to make it available for other uses. In
basic terms, the process would allow for
recycling and reuse of CO2.
The company uses third generation
technology for CO2 capturing process.
This technology is less capital inten-
sive, economical and energy efficient
as compared to the first and second
generation technology that involve the
use of mono ethanolamine [MEA], says
Dr. Avinash Patkar, an industry expert in
the clean energy sector.
The idea seemed feasible enough
for the two to receive an initial round
of seed funding of over `25 lakh in
2009 from present day Directors of
Carbon Clean, Martin Haemmig and
Palaniswamy Rajan, to prepare a solvent
and start initial testing. The entrepre-
neurs narrowed down to six chemical
solvents from the 30 that could be used
in various industrial applications.
Angels, tie-ups
After graduating in 2010, they relocated
to Mumbai to start their own laboratory
to research, develop and create better
solvents, aided by angel funding the
same year from a set of investors from
India, the US, UK and Singapore.
They identified three areas of special-
ization to create a better product than
existing providers of similar solvents.
First, it needed to be energy- efficient so
that the energy released during the CO2
scrubbing process would be 40 percent
less. Second, the chemical solvent
needed to be less corrosive in nature to
last longer and cost effective. Lastly, the
THE SPECIFICS
Revenues: `6 crore by FY-14
Employees: 8
Ofces: Mumbai, London,
Atlanta
Carbon Cleans founders have leveraged technology and pricing to
build a business that cuts the cost of capturing CO2 by half
ASHNA AMBRE
A CARBON FREE
FUTURE
INNOVATORS INC
solvent had to be environmentally non-
threatening and safe to use. To give a
fillip to their innovation sans financial
constraints, the duo collaborated with
TNO, a Dutch research and innovation-
based company in June 2011. This gave
them access to a supervised pilot plant
where they tested and improved the
product for a whole year to match it to
international standards.
Hard work pays off
Real acclaim came when the entre-
preneurs won an international inno-
vation competition in London in
November 2012, where this process
was critically evaluated on various
parameters. They received a grant of
`33 crore by the British Government that
gave them access to a pilot plant in UK
for their own use. It was only after this
that they decided to commercialize the
solvent with installations. The company
started operations in India in 2012-end
with its first client, Solvay chemicals, a
chemical producing company.
The firm operates three plants now
Tirupati, Rotterdam in the Netherlands,
Sheffield in UK.
Its revenue model is flexible in nature
depending upon the contract, agreement
of use and involvement of Carbon Clean.
However, the duration of the contract
is over a long period of time (10 to
15 years). In future, the duo are looking
at entering into the space of conversion
of biogas to natural gas. For now, they
are trying to raise capital of `5 million in
the span of next five months.
Carbon Clean works
closely with clients and
looks into the initial
setup, operations and
safety parameters until a
user is fully comfortable
with the process.
aniruddha sharma
Co-Founder and CEO, Carbon Clean
FOR NATURE Aniruddha Sharma (left) and Prateek Bumb
NACHIKET GUJAR
www.entrepreneurindia.in INNOVATORS INC
77 77 Intelligent Entrepreneur September 2013
Not 2.0
Smells like entrepreneurship. Somewhat
SCRIPT BY ANKUSH CHIBBER ART BY CHAITANYA DINESH SURPUR
WORK LITE
Whats wrong?
Why dont you
ask the founder again?
So you
called him?
I did and
he put me on to the
Co-founder.
I just
cant seem to understand
this companys exact
revenue model. Some numbers
do not add up.
Yeah...He put me on to
the CFO.
Superso
he could
help you out?
He put me on to
their VC firm.
"This company
is growing more
than 100% year
on year"
the End
you know what
they say...
Oh
TECH DEPARTMENT www.entrepreneurindia.in
NEW MOVES
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and more stylish than ever to get up off that thing.
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be inconspicuous. Placing it on your iPhones screen activates a Bluetooth link between the
devices to transmit the data.
AIRO
`9,000
SPECS: The Airo monitors nutrition, stress exercise and sleep, additionally analyzing details
like caloric intake and daily exertion.
(for preorder; device will ship in fall 2014)
BASIS B1 BAND
`12,250
SPECS: The stylish smartwatchs activity-and sleep-tracker sensors continuously capture
metrics like motion, heart-rate patterns, perspiration and skin temperature.
FITBARK
`6,000
Specs: Dont work out alone. This bone-shape, waterproof device tracks your dogs move-
ments; the platform also pulls data from a number of human activity monitors to compare
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79 79
TECH DEPARTMENT
SPEECH THERAPIST
The Nessie makes any speaker
sound like a pro
JOHN PATRICK PULLEN
YOULL NEVER SEE THE MAGIC
behind the Nessie, but youll
certainly hear it. This elegant,
high-quality USB audio device
by blue microphones delivers
studio-level sound at an accessi-
ble price ($99.95) for podcasters
and Skype power users. Packed
into the mics adjustable head
are a studio-grade filter, which
softens the harsh pop of lips
or drums, and a shock mount
that eliminates vibrations and
rumbling. Meanwhile, the base
offers handy hardware controls
that allow users to mute the mic
or adjust the volume without
having to reach for a mouse to
navigate recording software.
But Nessies best feature may be
its zero-latency headphone jack:
by plugging in a pair of earbuds,
users can eliminate the echoes
and other feedback that plague
many built-in microphones.
The result is crystal-clear voice
audio that may have you saying
goodbye to your phone forever.
SKYPE SAVVY
As CEO of Cambridge,
Massachusetts-based Rogue
Amoeba, Paul Kafasis spends a lot
of time on Skype, both chatting
and developing audio software that
podcasters and sound engineers use
to create crisp, high
quality recordings.
Here are his tips for a
beautiful connection.
1. Set yourself up with a high-qual-
ity microphone
2. Use headphones to listen to the
call. This avoids creating a nasty
feedback loop.
3. Turn off everything else that
connects to the internet, since
bandwidth-hungry applications
(e-mail, web browsers, streaming
music, etc.) can reduce
call quality.
4. Hang up and try again if your call
doesnt sound right. More often
than not, this clears up connec-
tion issues.
Entrepreneur Inc.
All rights reserved
TECH DEPARTMENT www.entrepreneurindia.in

B
E
N

A
L
S
O
P
O
ne of the strangest things
about being a startup founder
is that Im running a multimil-
lion dollar company but earn-
ing a salary far below my market value.
My company may be worth a lot, but the
vast majority of my personal net worth
is tied up in an illiquid asset (company
stock), which is no help to me as a mom
with two small kids, a mortgage, medical
bills and day-to-day expenses.
Five years in and easily $500,000
below what should have been my accu-
mulated earnings since 2009, Im left
scratching my head. I hear murmurings
that some founders sell personal shares
long before an exit. Should I do the same?
Should you if youre in this boat?
A quick survey of other startup found-
ers revealed that they believe its OK to
sell a tiny percentage of stock (in the
single digits) once a companys valuation
reaches $10 million.
What you want to avoid is the obvi-
ous cash grab. People grimaced when
Foursquare founders Dennis Crowley
and Naveen Selvadurai took home $4.6
million23 percentof their $20
million Series B funding in 2010. Most of
the founders I spoke with agree that you
should try to sell to inside investors first.
It gives you a cleaner cap table, and you
can tell a better story around it; i.e., the
insiders wanted to help you stay focused
on the long term, says Jon Crawford
of e-commerce platform Storenvy. He
points out that if the people closest to you
are pushing for a bigger slice of your stock
holdings, its a testament to just how valu-
able they think your company is.
Karl Jacob, startup founder and angel
investor since the 1990s, has witnessed
CEOs sleeping in their cars because they
cant make their rent. Thats not good
for anyone, including the investors,
who need a CEO working long hours in
top mental and physical form, he says.
To ensure that you dont end up in this
scenario, Jacob advises startup found-
ers to pay close attention to their stock-
holder agreements upfront to make sure
they can sell a small percentage without
restriction. Im not sure if Ill take the
plunge and sell some of my stock to ease
my cash crunch.
AMANDA STEINBERG, is CEO of Dailyworth
Why founders sell off their company shares
AMANDA STEINBERG
What about Me?

H
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C
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J
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S
Figuring out how much your
company s worth is an art and a
science.
The art: The story you pitch to inves-
tors matters. Spend time researching
and crafting a pitch that represents the
companys long-term greatest reve-
nue or exit potential, not its current
situation.
The science: While not an exact calcu-
lation, look at the valuations of compa-
rable companies based on income and
market presence. If youre an early-
stage startup with no prots, base your
valuation on traction metrics such as
how many new customers you have,
how many come back and conversion
ratios, then apply them to a total future
market opportunity.
Thomas Mitchell, executive director,
Grace Hightower & Coffees of Rwanda,
New York City
As we are a New York City company,
transportation to and from events,
product deliveries and other day-to-day
trips required [traveling] via subway,
taxi or rental cars and vans. It wasnt
unheard of for us to spend $50
to $100 on cabs each day
to make deliveries
around Manhattan.
But then we started
using the car-share
service Zipcar, renting a
car or van for $10 to $15 per
hour to make our rounds through-
out the city. We estimate that,
compared to the combination
of cabs, messenger services,
vehicle rentals and even the
subway, our savings add up to more
than $6,000 a year.
As told to Grant Davis
HOW I SAVED ...$6,000
THE VALUATION GAME
MONEY www.entrepreneurindia.in
A
re congratulations in order? Or
perhaps youre just thinking
positivelyI like it! If youre in
the enviable position of having
an excess of cash on hand, you have the
power to take advantage of opportunities
to invest in your business. But before we
get to that fun topic, let me answer the
question in the title of this article.
Conventional wisdom holds that a
business should have liquid assets (cash
in bank accounts and very liquid invest-
ments) equal to three to six months of
operating expenses. Thats a nice rule of
thumb, but I like to separate cash into a
monthly operating account and a contin-
gency fund. Put simply, the operating
account should carry a sufficient balance
to cover the lowest cash inflow month
of the year for your business. (Seasonal
businesses should have enough cushion
to last through both their busy and slow
seasons.) Its your contingency fund that
should equal three to six months of oper-
ating cash.
JOE WORTH is Vice President of Operations and
Partner at B2B CFO.
Heres how to calculate both
Analyze the last 12 months of costs,
broken down into production costs
(otherwise known as cost of goods
sold in manufacturing or distribu-
tion businesses or cost of sales in
service businesses), and overhead
costs that are spent every month,
regardless of sales volume.
Take your current assets (bank
balances, outstanding accounts
receivable, inventory value) and
subtract your annual liabilities
(taxes due, accounts payable, loans
payable in the short term), then
divide by 365 to come up with your
daily operating capital. Multiply
this by the number of days to arrive
at a contingency amount youre
comfortable with.
Still not sure whats comfortable for
you? Run cash-flow forecast scenar-
ios covering various possibilities: aver-
age expected operations, a worst-case
scenario, and a best-case/high-growth
scenario. For your worst-case scenario,
consider what would happen if you lost
your best customer or top salesperson, if
there were a fire or natural disaster, etc.
(When I was with a coal-mining machin-
ery and services company, we lost $1
million in cash in six weeks when the
coal miners union went on strike, and
all of our customers stopped buying.
To survive we had to take draconian
measures with our own suppliers.)
Figure out a contingency number
that wont starve your current opera-
tion but will keep the business alive in
case something goes south. Park this
amount in a separate bank account or a
short-term investment such as a money-
market fund, and use it to secure a line
of credit with your bank. Now, for your
second question. If you find yourself in
the wonderful position of having more
than enough dough on hand to cover
both current operations and your contin-
gency fund, use the extra cash to grow
your business. Upgrade your equipment
to boost capacity or efficiency, bring
on additional sales staff or consider an
acquisition. Whatever you do, dont sit on
your money. To reach this point, youve
been doing something right, and youd
be a fool not to take advantage of your
businesss time in the spotlight.
MONEY
MONEY
Q & A
How much cash on hand is too much?
What can be done with it?
JOE WORTH
M
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66

Bonus Baby
Contingency fund? Check. Expanded operations? Check. Still have money left
over? This is when you start budgeting for the next three to ve years. Think
about where you want to be by that time and what itll take to get there. And if
you still believe you have cash to spare, only then should you pull it out of the
business for yourself. Just make sure to consult with your CPA and nancial
planner to determine the best way to distribute and invest the funds.
GO
PLAY!
Gameon gets you the gear. You
just get to the ground
PG 94
THE FIRM
Funding: Round 1
Ingersol Jayakumar started One.vu, a
social media platform, almost a year
ago. Now, hes looking for his first round
of funding.
Jayakumar: My question is on
valuation. How is valuation done for a
startup? How is it compared to the US
market if a company is based in India?
Sandeep Murthy, Partner,
Sherpalo Ventures: Understand
what you are looking for from the market
and you will be able to ascribe a different
value to each person based on what you
are getting from that person. It comes
back to, okay, what do I need to get to the
next milestone?
Lets say, you decide, I need a million
dollars to hit my next milestone.
An overview on how to look for funds at various stages of a business
PAYASWINI UPADHYAY
GATHERING FUNDS
TO BOOST THE BUSINESS
Rules of the Start-Up Game is a series by
CNBC-TV18s showThe Firm. In this fth part
of the series, three entrepreneurs with compa-
nies at different stages of funding needs meet
with three advisors who guide them on the
fundamentals of funding.
EPISODE 5
MONEY MATTERS: (left to right) Sudipta Routh, Alok Kejriwal, Sandeep Murthy, Ingersol Jayakumar, Vikram Vora, Bijaei Jayaraj
Generally speaking, your dilution will be
the same in the beginning whether you
take $200,000, $500,000 or $1 million.
Within this range, you are going to end
up diluting about 20-25 percent. That
implies a different thing where valua-
tion is concerned. When you take US
$200,000, your valuation is done in a
particular way, while if you take US $1
million, your valuation is different. But I
did not decide the valuation and then tell
you how much money I am going to give
you. It went the other way at this stage.
Alok Kejriwal, CEO & Co-Founder,
Games2win & Serial Entrepreneur
Over a series of rounds, it all equals out.
What I believe is, you may be hit badly in
the first one because you found the guy
who understood your vision but didnt
give you exactly how much you wanted,
but in the second round it will even out.
If you are doing well and continue to do
well for 5-7 years, eventually your cap
table will have flattened out to such an
extent that it will be pretty much the best
of what cap tables look like; unless you
were some real genius who got robbed
in which case you can start another
company and do it even better.
Jayakumar: My next question deals
with the balance of rights between an
investor and an investee company or a
founder at the very first stage of fund-
ing. Can I put in a timeline to a Right
of First Refusal (ROFR) or how limit-
ing should a non-compete be? Would an
investor have a right to determine direc-
tors compensation in my company? Can
an investor reorganize a company with-
out the CEOs argument? At the heart of
it, where does the balance of rights lie?
Murthy: What are you looking for
out of this relationship? We are getting
married. There will be items that you
will not agree upon and issues that you
might not align with. We are in it to build
the business. So if you come back and
say, Listen I am going to raise `5 crores
and I am going to take `1 crore salary
a year, we have got a bit of a problem.
There are things that you will be shocked
at when we start to invest moneyI will
ask you to sign an employment agree-
ment with your company. Then there
will a clause in there that says termi-
nation and you will say What does
this mean?
You asked about directors compen-
sation. Look, we are building a busi-
ness, so that is not as contentious. It is
not protecting; it is a statement. Here is
what I believe I need to live. I need `12
lakh a year to live. I need `20 lakh a year
to live. Let us talk about it. What are your
expenses? What are the realities of that?
No one wants you to starve. You need to
build the business.
Kejriwal: A lot of VCs will ask you to
pledge your shares back and earn them
back. So you actually have an earn-out
of your own shares. As a first time entre-
preneur, you will be shocked but there
are so many realities. You might just not
be the right guy to build the company or
you might just run away tomorrow.
Murthy: I will give you an example.
We do ask you to vest your shares. Let
us imagine it was not just you; you are
three co-founders. You have known each
others for 3-5 months. You all start to
work together. Suddenly, you start going
down the path and you realize that this
one guy is not as good as we thought. It
is a bit of a problem. Forget us protect-
ing ourselves; these clauses protect you
because suddenly you will realize this
guy is not the right person for me. If you
did not have anything like this he would
take 33 percent of whatever you guys
had at the beginning, walk out the door
and the day you build value for it, cash
out and go away.
Kejriwal: Let me add just a small

J
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N
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V
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K
A
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BEEN THERE, DONE THAT: (left to right)Alok Kejriwal,Sandeep Murthy, Ingersol Jayakumar
THE FIRM
sentence more. We have a company
where the Chief Technology Officer
(CTO) got a fabulous job offer from
Google, which he never thought he
would get. He actually ditched his own
company and walked out. The remnant
unvested shares could be used as a carrot
to get another quality CTO into that
company without diluting anybody else.
Murthy: You want limiting ROFRI
do not think you can. Part of the bene-
fit of putting in money is that there are
some standards that exist. If I put in
this much, then I can say I have got in
early, I have helped to build this, I would
like the option to come in later. If you
want to limit my time on that then I
am not getting what I would like out of
the relationship.
Jayakumar: The time limit is, for exam-
ple, if we go for a second round and the
ROFR goes with the investor, do I have to
discuss with them, show them the data
and they take a call if to go for it or not?
Murthy: Usually they have a pro-rata
right, not a ROFR. It is bad for the inves-
tor as well to have a ROFR. So even when
you take a strategic investor, one of the
concerns you will have is if that guy has
a ROFR, he does not exercise it; that is
a signal to the market. So typically what
you say is, I would like a pro-rata. If I
have a pro-right rate that means if you
are going to raise $10 million, I own 20
percent of the company then I have the
right to put in $2 million of that. So I can
continue to participate at the same level.
Sudipta Routh, Private Equity
Partner, Luthra & Luthra
That is the understanding that the ROFR
ultimately will drive the valuation down.
If you look at ROFR and compare it with
Right of First Offer (ROFO)if you
have a situation where the transaction
costs are really high, the ROFR in that
investors hand is worth a humongous
amount. No one is going to come to you.
So you have no incentive to go out in the
market to look for a strategic investor as
well. If you do not like the ROFR and it is
still there despite the rights issue which
you are talking about, then you can start
making a case for a ROFO. One of the
arguments is informational asymmetry,
because the investor does not have the
same amount of information in there,
and that affects the ROFR much more,
and that is why he wants the Return on
Revenue (ROR). If you are able to satisfy
that informational asymmetry and there
is a two-way street in that informa-
tion, I think automatically he will drop
the RoR. He understands it drives valu-
ations down.
Funding: Round 2
Vikram Vora is the CEO of Mydentist, a
dental services chain.He is in his second
round of funding. The first round came
in from seed funds.
Vora: In a position where a person is
going for a new round and has two offers
in hand, how much would it make sense
to go into what some people may call a
reverse auction kind of a scenario?
Kejriwal: If it happens; you are really
good. What would really matter again
is not who gives you the best price but
who is the best person to take the money
from? Sometimes ignorance drives
prices up and that money can hit you
hard; I call it vampire capital. Have you
done diligence on the two VCs? Have you
spoken to 20 entrepreneurs who have got
funded by that guy? So is the guy who is
putting the bigger offer the nicer guy? If
he is, then take the offer. However, with
regard to reverse auction, one would just
say you are lucky you are getting a better
price. But I would go back to the guy who
has a lower price whom you probably like
morethat is my gut feeland explain
that I am a little short on the value; do
you think we could match it?
Vora: What is the venture capitalist
(VC) opinion about sharing details of
term sheets of other VCs to bargain for a
better valuation?
Murthy: Lets look at it the other way. I
didnt find three companies that look like
you and try to bid on the three. We said,
look we align, we want to go do this and
let us put this in context. You are talking
about Series B or Series A after your seed
round, whichever way we look at this.
Now, if you turn around and say I found
these two guys, they both are really cool,
they both are very nicehere is what
we are going to do. You guys have till
Tuesday 10 oclock to submit your offer
and I will pick one. We will both not give
an offer because thats not the relation-
ship that we are trying to build here. You
NITTY GRITTY: Sudipta Routh SECOND ROUND OF FUNDING: Vikram Vora
PAYASWINI UPADHYAY is Correspondent,
CNBC-TV18
might find that in the later stagepublic
markets, but not at Series B.
Routh: For situations like this, there
is no requirement for legal protection
because the only time something like
that is going to happen is if the entre-
preneur has discovered cold fusion or
room temperature super conductivity.
Otherwise, if you tread that path, it is
dangerous because you will be known in
the market for what you did.
Vora: Can the clause for a prospec-
tive Bridge Round from the VC be
included in case of a critical scenario
and, can a promoter demand an addi-
tional payout in case of an exit that was
better than what the VC may have origi-
nally expected?
Murthy: I like them both. The first one
is hardwe are buying equity, we are in
it with you. So the minute I invest in a
company, the first thing you start think-
ing about is, What is the pitch for the next
round? I am not saying how I am going
to put the next round in. Fundamentally,
we are aware of the fact that we are in
it together, what you bring is the opera-
tional expertise, what we bring is money.
There is an unsaid notion that if you
are making progress, if you are getting
close to that next round there is prob-
ably going to be a willingness to bridge
it to that next round because we have
already put in some money and so we
dont want to throw it away. But every-
body in the world just told you this is the
worst idea out there and then you come
saying, can you give me another million
dollars so that we can continue; it doesnt
seem likely.
Vora: How long can an investee
company or a founder defend his
CEO position?
Kejriwal: There are three ways you
could possibly lose confidence of the
board or the investor with you as a CEO.
The first is you are not building a great
company. The second which I have seen
very often is communication. The third
is just how you are selling that company
to the market. You could have sold it to
your set of investors but then once you
go out there and meet people, a lot of
people sometimes are great COOs but
not CEOs. One has to understand that
difference. If you go international and
are not able to speak at public fora, if
you cant really sell yourself as a guy
who can build something different, then
you ought to step down or take a differ-
ent position.
Routh: You have earn-outs. Decide on
earn-outs. If you are kicked out, termi-
nated with cause or without cause, draw
up a matrix of earn-outs. That is some-
thing we are starting to see now. You
have it in multiples, if you had a great
2 x EBITDA, your earn-out is fantastic
and then you can make a life choice, do I
really want to stick with these guys who
think I am a Business Development guy
when I am actually the CEO. You might
want to ask that question yourself; that
earn-out is going to act as an incentive
and a disincentive for you and the VC.
So, it works both ways.
Then there is the world of equity kick-
ersit depends upon the performance
of the company and then you write your-
self into a little on your common stock
agreement. In your stock restriction
agreement you write in an equity kicker
where the performance of the company
will give you a kick in terms of remu-
neration. What happens here is, when
you look at the anti-dilution clauses, it is
always the down funding which triggers
those anti-dilution clauses.
Murthy: I will put it differently. If you
asked for an aggressive valuation and
then we are unwilling or unable to meet
that and we took a valuation that we
are more comfortable with. Now Series
B and Series Cthey would consider
situations where, lets say, you felt your
value is 60 million, they believe the
value is 40 million. So, if I hit 200 crores
this year, then I get 60 millionso that
is effectively the equity kicker. However,
the reality is that it benefits the whole
previous class; not just you but then you
have performance incentives. You can
take the employment contract and do
whatever you want with it. But remem-
ber, if you have other management team
members at that level now you got to
figure out how you are going to deal
with them.
Funding: Round 3
Bijaei Jayaraj is the Founder & CEO of
Loylty Rewardz Management. Jayaraj
is backed by Venture Fund VenturEast
since inception and completed Series
B funding by Venture Fund Canaan
Partners in October, 2011. Now, he is
looking to attract an investor for Series
C funding.
Jayaraj: By the time you get to a Series
Ctypically from what I have seen, all
of us give drag along, tag along anti-
dilution, liquidation preference. I think
all of them have different stages. At
a certain stage, shouldnt it naturally
evolve at Series Cdo investors come
to the room with an understanding that
it is not like Ground zero where we can
get everything?
Murthy: Lets talk about Series A. You
had nothingyou had a piece of paper,
the guy came and said you seem like a
smart guy, did a few reference calls and
said you are okay. In Series B, there is
some operating history, we will look at
liabilities; make sure there is nothing
there. Series C, you have been running a
business, you have got revenues, custom-
ers, and have all sort of other things in
play. All such things are positive but can
also create liabilities. So, suddenly when
you are thinking that rights are going
to go lower or less, the reality is the
exposure is greater. Exposure is greater
because I am (a) putting more money in
and (b) you have operated, you are exist-
ing, you have potential new liabilities I
dont even know. So, the great clause is
indemnification and you spend a lot of
time on indemnification. As a result, the
diligence will be tighter and the restric-
tions will be much stronger. So, I dont
think it is a fair view to believe that
expectations should reduce.
STARTUPS: INSIGHTS www.entrepreneurindia.in
OVER THE PAST FEW YEARS
weve seen a transition of vari-
ous social not-for-profit organiza-
tions towards the for-profit model
and thus add to the ever growing
number of social entrepreneurs.
For many, social entrepreneurs
are people who work at the bottom
of the pyramid. They are individu-
als who come up with innovative
solutions to solve societys most
pressing issues.
AT HOME
My exposure to people who work
towards the betterment of soci-
ety and empowering lives, came
at an early age when I would see
my motherthe quintessen-
tial fauji wife, being constantly
involved in the Army Wives
Welfare Association (AWWA). The
AWWA, as it is called, is responsi-
ble for the holistic development of
army wives and children across
the country.
Each station, each battalion
has its own AWWA Chapter with
specific goals. Each weekend my
mother would devote her time to
the Family Welfare Centre talking
to the wives of jawans and help-
ing them learn new skills, at times
solve domestic problems and
encourage them to help raise their
children with utmost care and
make use of all facilities provided
to them.
A couple of years later, I had an
opportunity to intern on a proj-
ect with an NGO in Delhi called
Pravah. This NGO works with
issues of social justice through
youth action, which left its mark
on me. With these experiences in
hand when I chose to become a
journalist, my family and friends
thought it was my way of wanting
to make a difference in the soci-
ety, to do my little best to change
the world.
But, to me you dont neces-
sarily have to be jhola-wielding
journalist, or a social worker or
even be categorized as a social
entrepreneur in order to make a
relevant change.
MATTER OF SEMANTICS
I wouldnt brand anyone who
knowing or unknowingly works
towards betterment of society, a
social worker or a social entrepre-
neur. Id rather call them agents
of change. And there is a reason
behind this. Lately, I have had the
privilege to travel to North East
India and meet up with some very
exciting entrepreneurs.
Their primary intention when
they started up was to work closer
to home, not be stuck in a 9-5
corporate job and most impor-
tantly, do something for them-
selves. They were just fortunate
that their idea ended up involving
the community and solving prob-
lems faced by many.
SELF-RELIANCE, THE KEY
I strongly believe our society
needs proactive change agents.
In the past, people working in
the social sector were those who
raised funds to support a cause.
But the idea of profit has led many
to transform their outlook towards
the social sector.
The idea is to help people but
most importantly make them
self-reliant.
So is Nelson Deb, a web
designer quit his job and came to
a little hamlet called Bokakhat
near Kaziranga Assam and
started a small sanitary napkin
unit, an agent of change? Id say
yes, because Deb, by developing
his own brand, has empowered
adolescents in his community
who had limited access to sani-
tary napkins. He is also creating
jobs and is helping women earn
a livelihood.
Or take the case of Nisha
Bora, who along with her father
started Elrhino, a company that
makes paper out of elephant and
rhino dung.
The father-daughter duo works
with villagers in Assam. In their
attempt to procure their basic raw
material for the firm, they have
helped people actively partici-
pate in conservation of wild-
life and also fight poaching. The
company also trains local youth
on innovative use of abundantly
available resources.
The thought is quite simple. It
not about being a sole entrepre-
neur taking all the effort. Instead,
it is about creating a revolution
that eventually creates many more
entrepreneurs and helps people
lead a better life.
Change Agents
Indias entrepreneurs are giving back to society in
more ways than it is apparent
THE FIREWALK
HARSHADA SAWANT
Associate Editor-CNBC Awaaz; host and producer-Awaaz Entrepreneur
The idea of
profit has
led many to
transform
their outlook
towards the
social sector.
The idea is to
help people
but most
importantly
make them
self-reliant.
BRING IN THE EXPERTS
Creatively-inclined folk have had a love-hate relationship with technology. But some startups
are trying to fix this
ASHNA AMBRE AND SHRUTI CHAKRABORTY
F
or years, creative profession-
al sf i l mmakers, arti sts,
designers and the likehave
struggled with challenges like
scaling businesses, becoming profitable,
etc. Thankfully, some startups have
understood this problem and designed
technology that can solve such problems
without fooling around with their audi-
ences artistic core.
Code and play
Gurpreet Singh, 37, Founder, Pixpa
Digital Pvt. Ltd., a Delhi-based
web designing platform, caught
the entrepreneurial bug in 1998,
while studying architecture at the
School of Planning and Architecture,
Delhi. While at college, he started
IdeazInc, a creative agency that devel-
oped design and digital solutions
for clients.
We wanted to create a platform
where artists could build their own
websites using easy tools and techniques
to showcase their work on the same plat-
form, says Singh. That thought gave
birth to Pixpa, a startup Singh launched
in the US in 2011 with ex-colleague Anuj
Sharma, a web designer at IdeazInc.
After the good response we got in the
US, we thought that it would be a good
idea to take this concept back to India,
says Singh. They launched Pixpa in
India in February 2012, with a seed capi-
tal of `1 crore, fully bootstrapped and
funded by IdeazInc. Pixpa lets artists
create their own designs and infrastruc-
ture sans coding or scripting. An easy-
to-use format allows artists to choose
labels, fonts, colors and create a gallery
using the web interface. The purpose
TECH FOR ART: (left to right) Gurpreet Singh and Anuj Sharma
PIXPA
Startup capital: `1 crore
Number of subscribers:3,000
Price: `3,000-12,000 per
annum
STARTUPS
AMIT KUMAR
is to give them a platform to showcase
their repository of work online, be it
photographs, videos, slide-shows, etc.
using multimedia tools.
Pricing is split across three levels:
starter, pro and plus, and users are
charged between `6,000 to `18,000
annually, depending on the subscrip-
tion model. Additionally, the site offers
search engine optimization, multiple
buying features, and hosting space
depending upon the subscription model
the user opts for.
Mustafa Quereshi, a professional
photographer and early customer tells
us that Pixpa provides efficient services
for low prices. In 2010, the website
creation culture was new and charges
quite steep. That is when I approached
Pixpa, he shares.
The two-year old startup has over
3,000 subscribers, of which only 10 to
15 percent are Indians. The market
abroad is really mature and there are
many companies that provide similar
solutions. However, in India, we do not
face any competition and so the target is
to tap the potential in Indian markets,
says Singh. The founders future plans
for Pixpa are multi-fold. They want to
add an e-commerce dimension to it.
Cutting it right
In 2011, after years of experience in the
garment industry, Mausmi Ambastha,
Founder and COO of Threadsol
Softwares Pvt. Ltd., a software solu-
tions provider for the garment indus-
try, spotted an opportunity to develop
a solution that optimizes the use of raw
materials. With friends from the soft-
ware and marketing fieldsManasij
Ganguli, Abhishek Srivastava, Bratish
Goswami and Madhumita Phukan all
in their early thirties who were looking
to make a leap into the entrepreneur-
ial worldshe set up Bengaluru-based
Threadsol Softwares.
The companys first product, intel-
loCut was introduced in early 2013. It
is a cloud-based intelligent material
planning and optimization software.
It measures, predicts and optimizes
material utilization and productivity
for sewn products, primarily focusing
on garments but also caters to foot-
wear, home furnishings, and automo-
tive manufacturing, the founding
team explains.
The software essentially comes in at
various stages of manufacturing and
improves the efficiency of processes like
buying, cutting and use of material at
manufacturing units, thereby reducing
wastage and increasing productivity.
The overall impact is not only on
productivity and profitability, but also
thereby on the environment, Phukan,
Co-Founder and Chief Marketing
Officer says.
Around 60 to 70 percent of the cost
that garment manufacturers incur
is just on fabric, explains Ganguli,
Co-founder, Threadsol. Even a two
percent saving on the cost of fabric
ends up giving manufacturers up to a 12
percent rise on profit margins, he adds.
intelloCut provides Software-as-
a-Service version to encourage Small
Medium Enterprises (SMEs). SMEs
want the same software tools available
to large enterprises but cannot afford
them because of the high cost of prod-
ucts. Keeping that in mind, intelloCut
offers an online module which can be
accessed via a web browser or web-
enabled phone, hosted on the cloud,
Goswami says.
SAVING FABRIC: Mausmi Ambastha
INTELLOCUT
Startup capital: `40 lakh
Team size: 10
Fabric saving: 2-5 percent
BMAXIMAGE
The price of the software depends on
the scale at which the manufacturing
takes place. On an average, customers
pay `6-8 lakh, the team informs.
Threadsol has partners in India, Sri
Lanka and Bangladesh, who help market
the product there. The company was set
up with a startup capital of `40 lakh and
broke even within six months of opera-
tions. It is looking to raise `1 crore as
investment to expand further globally.
Rajiv Jasuja, COO, Formal Clothing
Company, who recently began using
intelloCut says, We looked at the
powerful features and functionalities
of intelloCut and I am sure it will help
us in improving our bottom line.
Filming the future
Sharan Reddys grandfather, Varada
Reddy, owned Liberty theatre, a prom-
inent cinema house in Chennai which
faced challenges with modern tech-
nology posing stiff competition. Cut to
2010 when Reddy, 33, founded Indee TV
in San Francisco, US, as a platform that
allows filmmakers and film studios to
upload their films securely to be viewed
by judges at film festivals and other
interested parties. A similar service had
been introduced by Amazon that gave
Reddy some tough competition. But that
venture shut shop in 2012.
Reddy was working at Deloitte
Consulting where he was handling
Disney as an account in the US. Here
I got to see how things work at film
production houses, he recalls. This was
when Reddy came across a challenge
that filmmakers faced. Awards like
the Academy Awards and others have
large juries. Based on the number of jury
members, filmmakers were expected
to send that many DVDs, he explains.
This struck Reddy as an opportunity to
look into as most independent filmmak-
ers did not have the necessary funds to
send out many DVDs. I wanted to help
filmmakers with film distribution to not
only juries of awards but also the film-
loving audience, he says.
By 2012, Indee had 26 festivals using
its services. Film festivals required
entrants to upload their film on the plat-
form where jury members could watch
it. The platform allows users to send
films to recipients as a link in an e-mail
and watermark it too. The viewer can
watch the film until a pre-set date and
a certain number of times as specified
by the user. Our platform is secure and
prevents any form of copying or piracy,
Reddy shares.
Most customers for Indee TV are
independent film-makers, but US-based
film studios and distributors use its
service more, Reddy informs. It starts
at five dollars for a feature length film
and two dollars for promos, he adds.
Adam Global, Senior Coordinator,
Production & Operations at IM Global
says, We have been using Indee's plat-
form since July 2012. It has allowed us
to eliminate distribution of sensitive
DVDs and provided us with a way to
securely distribute streaming links in
a convenient way.
MAKING HIS PRESENCE FELT: Sharan Reddy
INDEE.TV
Startup Capital: Less than $250,000
Numbers of users: 3,500 filmmakers
and companies as of September 2013
Number of films promoted through
Indee: 5,100
P BHUVANESH
STARTUPS
KICKS
A Delhi-based sports startup wants you to get out and
playand leave the rest to it
AVANISH TIWARY
S
ports usually takes a back seat
once we get past our childhood.
For working professionals, it is
difficult to find time or team
mates to play any kind of outdoor sports,
says Zeba Zaidi, 38, CEO, GameOn India,
a sports portal that organizes various
sporting events for individuals and
corporate companies in Delhi-NCR.
Owned by Volano Entertainment
Pvt. Ltd, the two-year-old Delhi-based
sportal launched in December 2011 by
husband-wife duo Adnan Adeeb, and
Zeba Zaidi, organizes these events for
people by connecting them with other
enthusiasts and also takes care of sports
kit, venue, refreshments as well as
umpires or referees.
Zaidi says some of the biggest deter-
rents in playing a sport is that even
though you want to go out and play,
either no one is interested or you dont
have a place and the resources for it.
GameOn India, she says, simpli-
fies the process of organizing a sport
by giving their customers everything
required for it. The only thing one has
to do is to show up and play.
After moving to India from Dubai in
2010, Zaidi and her family did not have
many options for recreation apart from
shopping or watching a movie.
Having spent 10 years in London prior
to living in Dubai, Zaidi saw a lack of
enthusiasm in people for any kind of
sports in India. Unlike here, almost
everyone in the UK has a team and many
of the sporting events attract a huge
number of spectators, Zaidi says.
A junior-level national skater,
Zaidi then sought to popularize
the concept of amateur sports in
India, which she says is in a nascent
stage here, giving an upper hand to
the startup.
Getting on the field
Currently, GameOn India has six differ-
ent games in its kit and anyone can enroll
by registering themselves on its website.
The pricing for each sport is different
depending on how one registersas an
individual or as a team.
The price starts from as low as `500
for an individual player of badminton to
`20,000 for a cricket tournament. After
registering for a sport, the startup sends
out event details for which the players
have to show up and everything else is
taken care of.
GameOn India subsequently moved
its attention to target corporate enti-
ties in the fourth quarter of 2012. In
recent years, a lot of corporate firms have
woken up to the fact that sports is a good
way of breaking down hierarchy and to
introduce people within departments,
Zaidi points out.
The startup offers a customized annual
sports calendar for corporate clients with
a schedule of events. Throughout the
year, we engage their employees through
GAMES ORGANIZED
CRICKET, BADMINTON,
VOLLEYBALL, FOOTBALL,
BASKETBALL, TENNIS AND
RUNNING
JUST FOR
one or the other sporting activities,
Zaidi says. The company has to tell
us the number of events they want in
a year and the approximate number of
people who will participate, she adds.
Currently, it makes yearly calendars
for eight corporate clients and has over
1,000 individual customers, with more
than 200 events organized in a year.
For the recent Airtel Delhi Half
Marathon held in December 2013,
SWEAT IT OUT: Zeba Zaidi and Adnan Adeeb
STARTUPS
GameOn India trained 300 employees of
General Electric (GE) five to six months
prior to the event.
The company has also created a yearly
sports calendar for GE. We have been
working with them for one and a half
years as part of our employee health
initiative. They engage our employees
with different sports activities, says
a GE employee who does not wish to
be named.
Moneynot a spoil-sport
After bootstrapping for a year with
an initial investment of `50 lakh, in
August 2012, GameOn India raised `65
lakh from Shiven Malhotra, who runs
Strategic Investments by Design (SID),
an investment management firm based
in the San Francisco Bay Area. Malhotra,
a sports enthusiast himself, says that he
does not generally invest in sports-based
startups. However, he did so for GameOn
because he felt for the cause and its even-
tual purpose, he adds.
Being a sports enthusiast, I have
always wanted to do something to
encourage a sports culture in India.
Zaidi and Adnans concept was unique
as it talked about being social and fit
by getting people out in the field, says
Shiven Malhotra, Director, GameOn
India and Founder, SID.
Zaidi tell us the companys revenue in
2012-13 was `70 lakh, which is going to
be in excess of `2 crore in 2013-14.
In December 2012, Zaidi launched
an amateur sporting property, Devils
Circuit, a five kilometer obstacle run
race, which she says enjoys a cult status
in the West.
We started the Devils Circuit in
Ludhiana and in October 2013 took it
to Noida. There are 15 military kind
of obstacles in Devils Circuit, says
Zaidi. Through Devils Circuit, the
company earns its revenue from ticket
sales and advertisements or spon-
sorships. Currently, both the reve-
nue streams contribute equally to the
companys earnings.
This year, the firm plans to take
its Devils Circuit property to Pune,
Hyderabad and Bengaluru. The company
also plans to open a Bengaluru branch
to handle corporate clients in Hyderabad
and Chennai.
SWEAT IT OUT: Zeba Zaidi and Adnan Adeeb

A
M
I
T

K
U
M
A
R
Styling
Homes
An online platform connects interior designers
and customers, easing the process for both
ASHNA AMBRE
S
ometimes solving a personal
problem can seed a creative
business idea. Parikshat
Hemrajani, Founder of Dwll,
an online interior designing startup,
hit upon his business idea while on a
desperate hunt for designers to renovate
his house.
Noticing the lack of accessibility to
qualified interior designers in the market,
30-year-old Hemrajani started Mumbai-
based Chipmunk Design Technologies
in September 2012 along with Pankaj
Poddar, his 31-year-old batchmate
from Indian School of Business (ISB),
Hyderabad. Though both of them are
engineers with no background in inte-
rior designing, they created a platform,
www.Dwll.in for designers with a seed
capital of `6 lakhs from their personal
savings.
Talking of the prevailing trend,
Hemrajani says, In most households,
a local contractor does the renovation
and creates a new look based on stan-
dard templates that he has access to.
This practice is what they are hoping to
change with their online platform.
Choose your designer
Chipmunk Design Technologies attempts
to make the process simpler. A customer
who wants to design a home or office can
sign up on the Dwll website and punch in
details of the space, upload photographs,
dimensions, basic preferences and their
budget. A customer can either choose a
designer from the list on the website or
is allotted one.
A design professional is then sent to
get the measurements of the site based
on which a meeting is scheduled with the
interior designer to discuss customers
preferences and finer project details such
as wall textures, floor layout, and color
combinations. Post this, the customer
receives a customized-design box that
includes the blue print of the space to be
designed, floor layout, paint swatches,
fabric samples, furniture layout, abstract
of costing, mood board, technical draw-
ings and wall elevations drawn to scale.
This box also contains a shopping list
with items to be bought, where to source
them from along with suggestions of
contractors who can execute the proj-
ect. The customer has an option of either
asking the designer to execute it or can
have a local contractor complete the
project. The payment is made upfront
by the customer on completion of each
phase of the project. If unsatisfied at any
time, a new designer is assigned to the
customer. The startup generates revenue
through margins charged by designers
on contracts acquired through Dwll.
They have received customer queries
for 35 projects amounting to `4 crore in
India and Dubai. The average project
size is a little over `11 lakh per project.
Of these, 12 projects worth `1.5 crore
have been converted into contracts and
work is in different stages of comple-
tion. We have another 45 leads that we
are currently working on amounting
to `3.5 crore, claims Poddar unwill-
ing to disclose particulars about the
firms revenues.
"This is a perfect platform. I can
choose a designer and view the port-
folio on the site. The process is also
STARTUPS
and the company pays the remaining.
Nandini Hirianniah, Co-Founder of The
Morpheus, an accelerator for early stage
companies, where Dwll was incubated
September 2012 onward, says that Dwll
as a concept has potential. They are early
players in India who will educate poten-
tial customers and also harness early
adopters, she says. In a way, they have
a virgin opportunity to lay the path and
become leaders in India and eventually
make their product relevant to other
geographies, adds Hirianniah.
Fine print
Navigating the industry and its dynam-
ics has not been easy. The interior
design industry is really fragmented
and unstructured making it difficult
to find a reputable designer who is on
the same wavelength as the customer,
notes Poddar.
The process of listing designers on the
site is tedious too. Designers can't be
tracked through telephone directories as
they work in silos and on referral basis,
he points out. Poddar and Hemrajani
both also want to tap the potential in
tier II and III cities. These cities don't
have access to good designers and we
receive many pitches from them, says
Hemrajani. Hirianniah of Morpheus says
that in order to ensure that the founders
tap the right opportunities, their product
should become relevant and indispens-
able to the interior design community to
maintain a stronghold in the market and
become a leader.
quick and hassle-free," says Rakesh
Ranjan, Manager at consultancy firm
PricewaterhouseCoopers (PwC) and a
Dwll customer.
Double-edged benefits
We started with the first design project
early this year and have over 300 design-
ers working with us. We have uploaded
profiles of only 125 top designers on the
site based on their knowledge, experience
and qualifications, informs Poddar. The
platform, he adds, gives an opportunity
for interior designers to work as freelanc-
ers and provides a back end for designers
to manage their projects.
Dwll provides an opportunity to
designers to showcase their work and
connect with customers, says Chaitali
Parikh, a designer with the firm.
Dwll recently inked a partnership
with Bajaj Finserv through which clients
availing loans from the financial services
company get an interior design consul-
tancy package wherein a customer
pays only 50 percent for the service
DESIGNING SPACES
INTERIOR DESIGN, LANDSCAPE
ARCHITECTURE AND FURNI-
TURE DESIGN FIRMS ACCOUNT
FOR ROUGHLY 13% OF ALL THE
DESIGN COMPANIES IN INDIA
INTERIOR DESIGNERS, LAND-
SCAPE ARCHITECTS AND
FURNITURE DESIGNERS
CONSTITUTE 10.17% OF THE
TOTAL DESIGNERS IN INDIA
Source: CII
PICK YOUR CHOICE: Parikshat Hemrajani
(left) and Pankaj Poddar
MEXY XAVIER
RENT A LOOK
Now you can hire a party dress and get the killer look without paying the big bucks
ASHNA AMBRE
W
omen are often heard
complaining about how
they have nothing to wear
for an occasion. You might
just hear less of that if one startup we
met recently has its way.
Delhi-based Neeraj Sharma was stag-
gered by the pile of expensive clothes
her daughter set aside after wearing
them only twice or thrice and did not
have enough space to store them. That
is when I decided to come up with a solu-
tion because I realized that there would
be many others like me stuck with the
same problem, she says of her chance
encounter with entrepreneurship.
The business idea put paid to a
15-year career in the media and the
English Honors graduate launched
Wrapd in early 2008 as a sole proprietor-
ship. The startup rents out wedding and
party wear for both men and women.
It has a palette of ethnic and western
fashion that includes designer lehengas,
sarees, sherwanis and evening gowns.
Dipping into her personal savings
Sharma raised a seed capital of `8 lakh,
which helped her buy outfits at market
price to build an inventory. Renting
outfits is a common trend abroad. In
India it was frowned upon earlier. The
trend is changing now. People have real-
ized the economic and storage benefits
BORROW PLUMES: Neeraj Sharma
STARTUPS

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been easy, she admits. When I started,
wearing rented clothes, it was not the
thing to do and convincing people was
a huge task. I believed in the concept
and with time, mindsets are changing,
she says.
of renting outfits, points out Sharma,
Founder, Wrapd.
Hire a dress
The rental model is interesting.
Wedding jewelry has been rented
for a long time; so I think renting out
outfits for special occasions seems like
a good proposition. However, compa-
nies that enter this space will have to
look into a lot of aspects because it is
a niche market, says Amit Gugnani,
Senior Vice President, Fashion-Textile
and Apparel at Technopak Advisors, a
market research firm.
Wrapd has two stores in Delhi and
customers can visit any one of them to
book a garment. A security deposit equal
to thrice the rental amount is collected,
which is returned when the outfit is
given back. Outfits are also altered
by experienced tailors to custom fit a
customer, but for that it must be booked
in advance.
Rentals are for 48 hours spread over
three days. A customer can collect the
outfit a day before the occasion and
return it the next day. Additionally,
Wrapd offers complimentary designer
earrings with every lehenga or saree.
Besides these, bridal sets are available
too at a price.
Garments are dry-cleaned twice
once when it is returned and once
again before it is delivered to the
next customer.
We recommend collecting the outfit
from the stores to ensure a perfect fit,
but we also undertake deliveries at an
additional charge, says Sharma.
Customers are not required to pay
anything extra if an outfit is inad-
vertently stained or damaged. No
customer will deliberately spoil an
outfit. Generally, we find that people
take care of the garment and so most
damages are minor. However, if
the damage is substantial, we take
a call depending on the situation,
states Sharma.
The rental price of each garment is
determined at approximately 15 to 20
percent of its retail value. So, typically
the cost of renting an outfit can range
from `1,500 to `10,000. For instance,
if it is worth `10,000,
the rental would be
just `1,500.
Ayush Sharma, a
customer with Wrapd
is happy with the
experience. Options
available for men
are far better than
other providers in the
market. Also, outfits
at Wrapd are some-
times custom-made
and are priced reason-
ably too, he says.
Decked up
Current ly, Wrapd
holds an inventory
of 350 outfits across
both stores. Sharma
tells us that they
have size variants for
every style to avoid
too much alteration.
Some clothes are in
demand. We have to
alter our inventories
as per the fashion
trends, says Sharma.
The busy season for
the company is from
October to February
begi nni ng f r om
the festive period
of Dussehra. The
startup rents out
10 to 15 outfits per
day duri ng t hi s
s eas on. Dur i ng
October-December
2013, Wrapd rented
out garments 800
times. Gugnani of
Teknopak Advisors
feels rising dispos-
able incomes have led
to an increase in the
number of people will-
ing to spend on fashionable clothes and
accessories.
The company has generated revenues
of `14.5 lakh during October-December
2013. Sharma says they plan to add two
more stores in Delhi this year. It has not
TRADITION RULES
PRESENTLY VALUED AT $39 BILLION,
THE INDIAN APPAREL MARKET IS
EXPECTED TO GROW AT A CAGR OF 9.5%
TO REACH $60 BILLION BY 2017
ETHNIC WEAR COMPRISES 75% OF
THE TOTAL WOMENS WEAR MARKET
VALUED AT $10.82 BILLION
ETHNIC WEAR IS A DOMINANT
CONTRIBUTOR AND WILL CONTINUE TO
GROW AT AN OPTIMISTIC 9.3%
INDIA WILL WITNESS AN INCREASE OF
OVER 10 MILLION WOMEN WITHIN THE
WORKING MIDDLE CLASS ACROSS THE
TOP 115 URBAN INDIAN CITIES, THUS
PRESENTING A POTENTIAL OF
35 MILLION CONSUMERS BY 2020
Source: Technopak Advisors
ON THE ROAD
A few brave startups are making a place for themselves in Indias big-gun dominated travel
and tourism market by tapping into niche opportunities
SHRUTI CHAKRABORTY
D
eep Kalras MakeMyTrip based
in Gurgaon was founded in
year 2000 and is one of the
few startups of that time to
have survived the boom and the bust
over the decade. Looking back, one of
the prime reasons for the online travel
portal to weather the storms is the fact
that it had the first-mover advantage in
the segment.
The company went on to get listed and
successfully set up offices in different
parts of the world. Today, with others like
Cleartrip, Expedia, Travel Guru, Yatra,
etc., MakeMyTrip holds a large market
share in the internet travel planning
market in India. The moral of this success
story truly is to dig your heels deep into
sectoral gaps and hang in there till you
dont emerge a winner. A slew of startups
in the travel industry are doing just that.
Finding the crevice
Bengaluru-based Chitra Gurnani Daga,
and Abhishek Daga, both 28-years-old,
are avid trekkers. During one of the
treks, it started to rain and the company
organizing the trek was not prepared for
it, says Chitra Daga, CEO, Thrilliophilia,
talking of the lack of professionalism
with the existing players in the market
which led her and Abhishek Daga to
co-found the Bengaluru-based travel
website in 2009.
Bengaluru-based Ish Jindal, 23,
along with Saurabh Jain, 29, too found
a unique gap in the travel services which
they wanted to plug with their website,
Padhaaro in January 2012. Jindal,
Co-Founder, noticed that international
tourists in India rarely get an opportu-
nity to connect with the local people
EXPERIENTIAL BREAK: (left to right) Chitra Gurnani Daga and Abhishek Daga

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because of language barriers, mindsets
and cultural differences. Many locals
want foreign tourists to experience their
culture but the latter do not know whom
to trust, notes Jindal.
Down south, 42-year old Pradeep
Murthy launched Wayanad-based Muddy
Boots in 2009 with a focus on North
Kerala and Coorg and put in a seed capi-
tal of `1 lakh. I did my engineering in
Calicut and over the years would go trek-
king in North Kerala. At best, there were
only individual guides and no organized
professional operators were available,
he says. Also, he wanted to change the
notion in peoples mind that adventure
is risky and suited only to young blood.
Out of the box
A common observation among found-
ers of all the three travel and adventure
startups is that tourists look for out of the
ordinary experiences. Sameer Guglani,
Founder of The Morpheus, an acceler-
ator says, Companies have to look at
niche segments within the travel indus-
try now.
Daga and Abhisheks Thrilophillia
essentially checks the quality of services
provided by partners and keeps auditing
them. There is a checklist that has over a
100 things, Daga says. We curate activi-
ties that customers can choose, she adds.
After targeting individual customers for
six months, the co-founders realized this
model was a long haul.
For faster revenues and scale, in early
2010 they shifted their focus to corpo-
rate clients but continued to service indi-
viduals. Thrillophilia currently provides
about 1500 pan-Indian experiences
tagged as experiential holidays that
create value during a trip.
We even have military guides and
experienced members of the team help-
ing out to maintain the highest level of
professionalism, claims Abhishek. We
are priced slightly higher compared to
a few competitors but are reasonable
for the quality of service we provide,
Daga affirms.
Thrillophillia has executed outbound
trips for about 300 corporate clients so
far including Cisco, Google, and TCS
among others.
Similarly, the Padhaaro founders
decided to kill two birds with one stone
and designed their model in such a way
that both sides benefit from it.
Apart from creating a network of
locals who tourists can trust, they saw
they could also help the locals incentivize
their skill sets and talents in their inter-
actions with tourists.
Padhaaro, as it stands currently, has a
greeter model and a freemium model
for foreign tourists to interact with locals.
The greeter model is free for users and
is based on the idea of connecting inter-
national tourists to locals for an indig-
enous flavor of a particular locale. The
LOCAL FARE : (left to right) Ish Jindal and Saurabh Jain
TRAVEL
HIGHS
THE
TRAVEL
AND
TOURISM
SECTOR
WILL GROW
AT A CAGR OF
12 PER CENT FROM THE ESTI-
MATED `2.2 LAKH CRORE IN
THE YEAR 2013 TO `6.8 LAKH
CRORE BY 2023.
Source: KPMG, December 2013
BMAXIMAGE
freemium model is an expert-led model
wherein people with a unique skill-be it
a mehendi designer or a local folk music
artist, can interact with tourists. We
havent tied up with any businesses, only
with individuals, mentions Jindal.
Aulia Nastiti, a tourist from Indonesia
says, I only had friends in Delhi and Pune
and knew no one in the rest of the coun-
try. However, in each city, I always had
meaningful experiences. The Padhaaro
greeters who are residents of the city
warmheartedly accompanied us as we
wandered around the city.
Padhaaro has served 150 tourists
like Nastiti, and has greeters in 20 cities
across India.
Muddy Boots advantage point is in
creating activity plans that large tour
planners are often unable to do, Murthy
points out. The company focuses on
outdoor activities and provides options
of varying levels of challenge. It could be
a simple walk in the woods, an outdoor
camp or a trekking holiday, Murthy says.
Interestingly, Muddy Boots has
cornered the hospitality sector too in
the region and partners with resorts to
provide activity options for hotel guests,
besides working with families, schools
and corporates. A third angle to its model
is a partnership with tour operators in
the UK to design activity holidays for
foreign travelers.
Muddy Boots activities are priced
between `1,500 to `1,700 excluding
transport, per person per day. Murthy
tells us he is looking to expand to
Rajasthan soon.
Investors go on a trip
These models have garnered investor
attention. Thrillophilia raised invest-
ment in September 2013 to the tune
of $200,000 from Hyderabad Angels,
iLabs Venture Capital Fund, Navlok
Ventures and Centre for Innovation,
Incubation and Entrepreneurship at IIM
Ahmedabad. Padhaaro instead went
through the accelerator program at The
Morpheus and received `5 lakh from
them in September 2013 as well.
The main source of revenue for
Padhaaro is the freemium model, intro-
duced only a few months ago. The
company keeps 30 percent of the amount
charged by locals from tourists.
We are currently focusing on the
greeter model, says Jindal of Padhaaro
says. To ensure that greeters are reliable
and trustworthy, Padhaaro conducts an
interview and a senior greeter in a city
meets new greeters. It is important for
us to build a brand tourists can trust,
Jindal says.
Now a 30-member team, Thrillophilia
was set up with startup capital of `25
lakh. The company broke even in the first
20-24 months and profits thereafter have
been reinvested into the business. The
founders plan to expand to Bhutan, Sri
Lanka and Nepal in the near future.
Raghu Bhathina of Hyderabad Angels
says, There is an inherent need for
outdoor experiences, so the market is
definitely big.
The challenge says Bhathina is that
its mostly an offline business and many
of the companies Thrillophilia looks
to partner with may not be online.
An online and offline combination is
needed, he says.
Guglani too reiterates the pitfalls
of being in the travel trade. He says,
Differentiation is important and build-
ing a brand that customers trust at the
same time does not happen easily.
As far as marketing goes Guglani says,
You cant defeat a MakeMyTrip when it
comes to spending. So companies need
to focus on good quality content, do-it
-yourself travel planning solutions and
on community building.
BMAXIMAGE
FOR NATURE: Pradeep Murthy
STARTUPS
www.entrepreneurindia.in STARTUPS: INSIGHTS
AS WE HEAR SEVERAL SUCCESS
stories of companies and proj-
ect owners raising funding via
crowdfunding platforms in the US
and UK markets, this emerging
phenomenon still in its infancy in
India warrants a closer look.
IT IS NOT AN INVESTMENT, BUT
A SPONSORSHIP OR DONA-
TION: Crowdfunding at its core is
not investment by a group of indi-
viduals for financial returns, but
a sponsorship or donation into an
idea/cause/project that they are
keen to support.
ENABLES PROJECT OWNERS
TO REACH OUT TO A LARGE
NUMBER OF PEOPLE FOR
SMALL AMOUNTS OF MONEY:
Crowdfunding is a technology-
enabled fundraising where people
fund small projects in small
amounts. For example, if a busi-
ness wants to build a proof of
concept for `10 lakhs, it can either
look for a single sponsor or 1,000
people who put in `1,000 each.
CREATORS OFFER INNOVATIVE
NON-FINANCIAL RETURNS TO
THE SPONSORS: The key to a
successful crowdfunded raise is
the creativity around tangible and
intangible benefits offered to the
sponsors. For example, a company
looking to build a prototype can
offer promotional events passes,
beta product offers, first look
during investments, etc.
WHERE WILL IT WORK?
Crowdfunding will take longer
to take shape in India than other
markets like UK and the US as the
concept is still in its infancy here.
TWO FACTORS CRITICAL TO
A SUCCESSFUL FUND RAISE:
Raising smaller amounts lesser
that `10-15 lakhs and a targeted
reach out campaign.
SOME CATEGORIES HAVE
POTENTIAL TO TAKE OFF
FASTER THAN OTHERS: Creative
projects, proof of concept for prod-
ucts and technology, books on
niche topics, social campaigns,
sports and election funding.
CROWDFUNDING VS CROWD-
SOURCING: Crowdsourcing is
where platforms bring in a crowd
of external experts to brainstorm
and build a concept or a product.
Several large companies like Coca
Cola, General Mills and Unilever
are continuously looking for ways
to innovate new product design
and development by crowdsourc-
ing through external experts.
With crowdsourcing, a company
or a project owner can basically
fuse the roles between a customer,
employee, critic and partner to
create products that are built
through constant feedback from a
group of people.
CROWDFUNDING VS. CROWD
INVESTING: This involves
offering financial incentives to
investors in return for the amount
of money they invest, in a company
or a creative project like a film.
This works like any other invest-
ment where investors are look-
ing for a business plan, a return
on their investment and a viable
investible project.
The key difference is the use
of a technology-enabled platform
to reach out to larger number
of investors, each investing a
smaller amount of money. There
is a lack of legal clarity regard-
ing crowd investing across most
countries including India. The US
has started making some inroads
with platforms like AngelList
trying to find solutions with the
regulatory bodies.
As an entrepreneur, evaluate
crowdfunding only if you are look-
ing to raise smaller amounts of
money and are reasonably certain
to attract sponsors who will be
willing to fund you without finan-
cial returns. For larger amounts of
money, as of now, you will have
to continue looking for individ-
ual or corporate investors till the
time there is legal clarity around
crowd investing.
Once crowd investing becomes
legally viable, it will potentially be
the beginning of Venture Capital
2.0 where companies will be
able to raise funds from lead
investors, who in turn will syndi-
cate investments through a crowd
investing platform.
Understanding
Crowdfunding
There are some factors that are critical to its success
CAPITAL HILL
NANDINI MANSINGHKA
Founder-Idyabooster; seed and angel stage investor
There is
a lack of
legal clar-
ity regarding
crowd invest-
ing across
most coun-
tries including
India.
STARTUPS: INSIGHTS
L
ets start with a question: Are online
reviews important to your customers?
The answer: Only if you want to sell
something. Consumers, whether theyre
in the market for a Tesla or a toaster, are increas-
ingly savvy, and a recent survey from software
company Baynote and the e-tailing group cited
online ratings and reviews as the most influen-
tial source of information for those making both
online and in-store purchases. Todays customers
do their homework, notes Shelly Kramer, a Kansas
City, Missouri-based brand strategist whose firm
has advised clients like Chipotle and Wal-Mart.
Your customers check you out long before
they ever decide to buy from you. They rely less
on advertising and more on search results. They
rely on their friends opinions. And they rely on
customer reviews. In the e-commerce world,
reviews signify validity. Making sure you have
a good online presence and reviews that speak
to your credibility is a big part of doing business
today, Kramer says. So, how can your business
secure a presence on (and dominate) online review
sites? Heres how:
Be Reviewed
Your business needs a presence on review sites. Heres how to establish one
ANN HANDLEY
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Get yourself on the map
Spend an hour listing your business on all major
di rectoriesGoogle, Facebook, Li nkedIn,
TripAdvisor, etc. At a minimum, make sure youre
on the most well-known consumer review/social
sites. You should make sure you develop robust
pages on Google+ and Facebook that include imag-
ery, videos, hours of operation and so on, Kramer
says. Why? Because your profile will show up in
any Google search and because Facebook, in one of
the many ways its endeavoring to compete against
the search-engine giant, is starting to focus on
local search in a big way. For compa-
nies that have multiple locations
but have been managing their
brands presence from a central
page, setting up strong Facebook
profiles is critical. Those brands
will want to develop [unique]
local pages and a local voice
and presence in [each] individ-
ual market, as this will not only
impact search results, it will allow
them to connect more closely
and more personally with their
customers, Kramer advises. You
may also want to place profiles
on industry focused review sites:
TripAdvisor for travel businesses;
Urbanspoon for food; LinkedIn for
professional and B2B services.
(You might not realize it, but
LinkedIn allows businesses to
list products and services on
company profile pages. It also
allows members to make recom-
mendations and write reviews.)
Encourage customers to speak up
Dont miss an opportunity to request an online
review or feedback. If you service customers in
person, offer a comment card along with the
receipt that directs them to your online profiles.
You can also ask for a review as part of an online
receipt or e-mail follow-up. Include links to review
sites from your company website or in your e-mail
signature. And dont forget to encourage real-
world feedback. Boston restaurant The Salty Pig
includes a leather-bound notebook with the check
to solicit handwritten comments. The notebook
encourages happy patrons to speak up, and the
move seems to translate online, too: The two-year-
old restaurant has 289 reviews on Yelp and 129
on Google. Of course, it goes without saying that
you should maintain the kind of stellar products
and services that inspire customers to leave posi-
tive reviews. If you are getting a lot of negative
feedback, you likely have a bigger problem. Which
leads me to
Deal with negative reviews head-on
Chances are youll attract a handful of grumpy
customers. Should you ignore them? Respond?
Perhaps you should celebrate them, like New Yorks
JoeDough Sandwich Shop did with a sign outside
that read: Come in and try the worst meatball
sandwich that one guy on Yelp ever
had in his life. The truth is, there
is no one right answer for deal-
ing with negative reviews. The
best you can do is apologize and
try to make it right. Invested as
you are in your companys repu-
tation, the criticism might sting.
But its helpful to remember that
not even Tolstoy earns five stars
on Amazon. (War and Peace gets
a paltry 4.5.) And, paradoxically,
a few negative notices will only
add to your credibility, signaling
that the reviews are authentic
and unvarnished. You may find
yourself the victim of an internet
troll who just likes to stir things
up. In those instances, Kramer
says, leaving it alone is the best
path, because the worst thing
you can do to someone seeking
attention by being mean or nega-
tive is to ignore them.
Use reviews as a subtle selling tool
Pillar Properties puts Yelp reviews front and center
on the homepage for The Lyric, a Seattle apart-
ment complex. See what our residents are saying
about us on Yelp! the page says. Its smart, fear-
less marketing that projects confidence. Consider
adding a Testimonials or What our customers
say heading to your navigation bar with links
to reviews, and mining the best ones to embed.
As I said at the start, your prospects trust online
reviews above all else. So why not make it stupid-
easy for them to choose you?
FAST FACT
Seventy percent
of consumers trust
brand recommenda-
tions from friends,
but only 10% trust
advertising, accord-
ing to a March
2013 report from
Forrester Research,
USA. Around 46%
of consumers trust
consumer reviews
and 9% trust
text messages
from brands
ANN HANDLEY is co-author of Content Rules and Chief Content
Ofcer of MarketingProfs
F
ranchising is far easier than starting up your
own business because the processes, prod-
ucts etc. are already in place. However, pick
the wrong franchisor to work with and you
may be in for a rough ride. Picking the right fran-
chise has to be a practical and well-thought out
decision. There are a number of things that you
will have to consider so that you find the franchi-
sor thats right for you.
What you are looking for?
What are you diving into this for? Are you bored of
Choose the
Right Franchise
Want to start a business but not from scratch? Franchising is the way for you
SHRUTI CHAKRABORTY
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a nine-to-five job and want more excitement? Do
you want more independence? Is profit your main
motive? What you are willing to put in? Can you
work on weekends? Do you have enough capital?
Do you like taking risks? Are you considering a
franchise because you dont want to take too big
a risk? Do you like working with big teams? Its
important that you assess your interests with these
type of questions and take on a business that you
will be able to execute well.
Assess your options
A lot of companies in India have
chosen to expand using the fran-
chise route. Most of the growing
opportunities are in the health
and wellness, education, food
service, financial services, and
logistics sectors.
The services sector which
i ncludes fi nancial services,
health and wellness, and food
service sub-sectors is expected
to contribute to majority of the
growth in franchising in the next
half decade in India, according
to a KPMG report. It is estimated
in the report that franchisees in
these areas will form around 55
percent of total estimated fran-
chisees in 2017.
According to KPMG India estimates, the fran-
chising industry is expected to quadruple between
2012 and 2017. There is scope for the franchis-
ing industry to contribute almost four percent of
Indias GDP in 2017 (assuming 6 percent Y-o-Y GDP
growth between 2012 and 2017), growing from
a current estimated contribution of 1.4 percent
of GDP.
At this stage, make a list of the businesses you
would be interested in and further research them.
Find out the necessary details about how much
investment will be required.
Is there a profit-sharing model or a fixed fee
that you have to pay to the company? Evaluate
the demand for the service or product you will
be providing in your area, the competition in the
industry and the awareness about certain brands.
Narrow down your options
By now, you would have been able to narrow
down on the business you are interested in fran-
chising with based on your research so far. Make
sure the list you have is that of businesses with an
established brand name. Check the track record of
the business and its reputation. As you are narrow-
ing down, make sure you check if the franchisor
is interested in setting up a business in your city
or area.
Speak to other franchise owners
This will be the most important step that will help
you understand the nitty-gritty from someone who
has already been in your position. Ask the fran-
chise owner about his experience of working
with the organization.
Have an honest discussion
about the support the organi-
zation provides. The franchise
owner will also be the right
person to talk to as far as return
on investment is concerned. The
franchisor may not give you an
entirely honest picture of that.
Discuss thoroughly with
the franchisor
The franchisor should have a
detailed support system in terms
of manuals and memos that can
help you with operations and
guide you on how to make the
most of the business. Also discuss
with the franchisor the amount
of independence you will have. Can you give offers
that are not being given by
other outlets?
There will surely be a training process that you
will have to participate in. But it is preferable to
go with a franchisor that is regular with train-
ing throughout the partnership. Also confirm that
your staff be trained by the franchisor as well?
Get an idea of what the franchisor expects from
you and whether both of you will be comfortable
working together.
Once you have gone through these steps, you
will be equipped to make a decision. Before you
sign on the dotted line and put in the money, read
all legal documents clearly.
What happens if the business shuts down? What
are the processes for termination of the agree-
ment? What happens if you want to sell the fran-
chise or renew it later? According to the report by
KPMG, India does not have any franchising specific
laws yet. However, various generic Indian laws
such as Competition laws, Indian contract Act etc
are applicable on franchising operations. Make
sure you research these as well.
FAST FACT
The franchising
industry is growing
rapidly in India and is
expected to create job
opportunities includ-
ing both direct and
indirect job opportu-
nities for an additional
11 million people by
2017, according to a
report by KPMG
G
oing global with a product or service is
something that should not be attempted
unless one has conducted adequate
research about the new markets.
Jumping into global expansion without putting
a thought into it is not a good ideahaste can
bring the consequences of a bad international
foray home.
The entrepreneur should also be flexible and
open-minded whenever he is targeting a new
Sell Globally
Create a successful local business model, do adequate research and then
execute the same model in other locations
ASHNA AMBRE
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108
market. He must do a complete and detailed analy-
sis of who the companys customers are, and about
their needs and service requirements.
Most importantly though, entrepreneurs should
ensure that their business model is working in the
home market. From there, one can always transfer
knowledge and skill sets to any place in the world.
Some businesses, however, dont have the model
suited to international expansion. A local food
chain, for example, mayserve food that is not apt
for the palate of certain overseas markets. Then
again, there are some businesses for which the
domestic demand is so high that they just dont
have the bandwidth for a global foray.
Choose the right markets
The first step to expand internationally is to deter-
mine the right locations. These deci-
sions are largely driven by cultural,
economic, political, and market
factors. To begin with, one must
track down if there are customer
orders or traffic originating from
some overseas location. That is
the most basic way to figure what
group of people is interested in
what your company offers. A
more precise but longer way is to
hire a market research firm that
will find you a market that fits in
with your target culture, policies,
tariffs,etc. that is suitable for you.
Do your research
Market research plays a pivotal role in the under-
standing of where ones goods or services will
sell. Research can also reveal the different market
segments, the presence of competitors and possi-
ble pricing for the products. Primary market
research includes collecting data directly from
international marketplaces through telephone
interviews or contacting potential customers or
government representatives. Secondary market
research involves gathering information through
news articles, trade statistics, data from export
specialists and government reports. There are
a number of consultants, government agencies,
books and free resources that are of great help in
conducting this kind of research.
Devise an export strategy
One of the key aspects to be kept in mind before
expansion is to firm up how the company is going
to sell its goods overseas. Selling over the internet
is a no-brainer for some type of businesses, but
others may need an international sales team. A
selling plan is a must as it would clearly outline
the business goals, the plan for financing this
expansion and how the entrepreneur intends to
sell the goods or services abroad. This plan has
to comply with all domestic and foreign govern-
ment regulations.
Connect with the industry
Today, through partnerships, alliances, and direct
hiring, an international sales team can be easily
set up in no time. A good move would be to create
a comprehensive list of companies in the industry,
visit their websites, and reach out to their execu-
tive teams. This will also open the company up to
partnership opportunities, in addition to creat-
ing alliances. Connecting with the
leaders of country-specific industry
associations can be extremely
useful. It is recommended that
one visits and explores indus-
try-related trade shows in the
region, learning more about the
local market.
Online selling
The internet has been a great
leveller when it comes to global
sales. The smallest to the biggest
companies are essentially on the
same platform when it comes to
selling their goods or services
online. Most businesses today have an online pres-
ence even if it is not for the purpose of selling.
There are two sales strategies that you can choose
to follow over the internet. The first would be for
the company to allow international customers to
find their website and shop just as the domestic
customers already do. The second strategy would
be for the company to actively find ways of using
the website to target new markets.

Avoid rookie mistakes
Business owners should be guarded against moving
to a new geography too soon instead of executing a
well-thought-out global strategy. Avoid negotiat-
ing with the wrong party or executing on a sale too
quickly without securing payments. Entrepreneurs
should also not divert attention to the global busi-
ness at the cost of a stable and successful local busi-
ness. One should make the right investment to have
both quality and quantity in the staff handling
global markets.
FAST FACT
Only 27% of online
shoppers speak
English, according to
JP Morgan and the
US Department of
Commerce
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ne of the oft-used ways to increase
sales is to sell products at a discounted
price. As the price of the product
directly affects the profit on each
sale, discounting becomes an important aspect
of marketing strategy. Selling at a discounted
price is most advantageous if it is paired with a
different product. Discounts encourage people
to buy, thereby increasing the average revenue
per customer. Though the profits remain low,
Develop a
Discounting Strategy
Offering discounts can create an instant buzz about your business
AVANISH TIWARY
HOW TO
110
discounts help to increase the market share of
a brand. With almost all online merchants sell-
ing products on discounted price or by offering
deals, the e-commerce business in India thrives
on this strategy.
There are various ways to offer discounts such
as through coupons, limited period offers, etc. But
the discounting strategy should be such that the
short-term increase in sales becomes an everyday
thing in the long-term.
Here are a few things one must do before
embarking on a discount strategy:
Reason to offer discount
To adopt the best suited discounting strategy, you
must know what you want to achieve through the
discount campaign. The reasons to offer discounts
will varyclearing dead stock, rewarding loyal
clients, introductory promotions, etc.
When the goal becomes clear, you
will find that is is easy to decide
on the type of strategy to adopt
for each of the reasons you have
in mind.
To retain existing customers
for a longer duration, you can
offer your loyal clients a limited
period discount coupon. Offering
a heavy discount or one plus one
offer also works if you want to
clear year-end products.
Understand your customer
You should know what your
customer thinks about discounts
as it may sometimes hamper the
image of your brand and backfire on you! Not all
markets are receptive to discounting strategies;
so it is pertinent to understand the psychology of
your customers. Be sure you have good enough
reasons to offer discounts, and even more so, if
the products are discounted heavily.
In a few markets, offering huge discounts can
create skepticism for the product. In markets that
are more receptive to discounts, customers are
often impulsive and buy things just for the sake
of availing the discount offered. So, be sure of the
type of market you offer discounts.
Route to target clients
Depending on your target audience, you have to
decide the methods to make the discounts avail-
able to them. To target online customers, you can
create a limited hour f lash-sales kind of offer
which will create a buzz for your website. You
can also try creating a dedicated page for promo-
tional products so that its easier for people to find
a consolidated list of discounted products on your
portal. Online portals can also mail personalized
discount offers to customers in keeping with the
customers previous buying behaviour.
Offline businesses can promote discount offers
through targeted television advertisements which
will telecast them to relevant customers only. For
example, if you are offering discounts in only one
state in a region, you should advertise in that state
only to connect with your target audience. To reach
out to specific groups such as students, parents,
etc., distributing pamphlets outside a tuition
center for instance, should do the trick.
Your business margin
Always think of your margins while
offering a discount. If you are
losing money, make sure you
have a plan for how long you can
continue discounts in the hope
of increasing clients. Evaluate
the product mix and the margin
on each of themexclude
products on which you cant
afford to lose money. Try and
create discounts which attract
buyers, and also make money
for the business.Stretching the
discount period for a longer
time might make your clients
think that the lowered price
is the permanent one, which
is one of the drawbacks of the
discount strategy.
Prepare for the demand
Be prepared to serve all the clients if the discount
strategy leads to a huge demand. Be it offline or
online, you must be able to handle the response
to the discount. If the customers dont get what
they were offered, the strategy may backfire and
adversely affect your image.
Make sure your sales and marketing team is
aware of the discount offer and details about
vouchers, etc., so that they can answer customer
queries. With the help of your marketing team,
see the result of your discounting strategyhow
people used the vouchers and where. This infor-
mation will help you the next time you decide to
offer discounts, depending upon the way people
used the earlier one.
FAST FACT
In 2012, a Yale
University study
found that a customer
is unlikely to buy
anything from a
website if the prices
of all the products are
same or almost same
SPEND IT
Kolkatas latest Taj property is bringing
Dhakai cuisine back to India
ASHNA AMBRE
BY THE
BYPASS
L
ast year, the Taj Group decided
to double its presence in the City
of Joy after a gap of 24 years by
launching The Gateway Hotel,
of the groups mid-market range of
Gateway Hotels and Resorts, on the
EM Bypass. Spread over two and a half
acres, the propertys biggest USP is its
location. It is located 16 km from the
Kolkata airport and 23 km from Howrah
railway station. But more importantly,
it is in close proximity to the citys IT
hub and is at the meeting point of old
and new Kolkata.
The six-storey building is modern
and contemporary in its architecture,
with a total capacity of 197 centrally
air-conditioned rooms across five floors
that overlook the city. The property is
being developed in two phases. In its
first phase, which has been completed,
two suites and executive and superior
rooms are ready. In the second phase
to be completed in the next six months,
two floors will be dedicated to suites
of which nine will be deluxe suites with
special amenities.
Room tariffs are being pegged
between `5,500 to `6,500. The deluxe
suites, when ready, would be priced
about 30 percent higher and will cost
between `14,000 to `15,000.
Work and leisure
The first thing that strikes you about
the Gateway Hotel is that it is built first
for business and then for leisure. There
is little greenery and the hotel has no
lawns. However, its rooftop boasts of
a swimming poolSplash, and an all-
day fitness centerActive Studio. A spa
and speciality restaurant is part of the
second phase of development.
Corporates and business guests
can avail of the fully equipped busi-
ness center that has been divided into
three sections a five-member meeting
room, a business desk, and two work
stations with access to computers, inter-
net and printers.
For the corporate professional who
wants to hold meetings outside of the
familiar environs of office, the Gateway
hotel has a conference hall with a
1
QUICK DEKKO!
1. Swirl, the bar
2. The Ballroom
4. The conference room
5. The interiors of a room
6 Hilsa fry and chingri malai
capacity for 16 people and an additional
seating for 22.
There is a spacious ballroom which
is humongous at 6,400 square feet and
can host up to 800 guests. The ballroom
can be split into two separate spaces as
well and it has a separate entry keep-
ing in mind the privacy of its resident
guests. If you fancy renting out the
ballroom, you can do it at a charge of
`2,300 to `2,400 per guest or at a fixed
rate of roughly `4 lakh for a very large
gathering like weddings, engagement or
business forum. Remember, this charge
does not include the cost of catering and
the decorations.
Going back to roots
A hotel is about its food, right? Currently,
the cuisine of the specialty restaurant
on the rooftop is undisclosed. However,
the all-day diner, Buzz, is open to guests
and has a seating capacity of 93. Besides
the regional home-style cuisine, the
hotel also serves the popular concept,
Active Food. This is basically food for
the health conscious and includes multi-
grain dosa, omelette with broccoli and
tofu, whole wheat walnut muffins, etc.
The highlight of the menu is undoubt-
edly the Purbo Banglar Khabar, or as
executive chef Asish Roy says, authen-
tic Dhakai cuisine, which was part of
erstwhile East Bengal and access to it
was lost post-Partition. As part of the
cuisine, guests can savor potato and
egg fritters, regional flower fritters,
sweet potato dumplings, curd topped
eggplant cups and a variety of fish and
mutton delicacies. What is a hotel with-
out a bar?! Swirl, the bar has a capacity
of 40 and is open from 4 PM to 11.30 PM.
City tours
The hotel arranges tours to the city
for the guestsa cruise across the
Hooghly river, the Victoria Memorial,
etc. However, these tours are normally
for larger groups only.
Thankfully, the hotel serves local
fare as part of its menu. So those who
want a taste of the city do not need to
worry, call local friends or venture out
to the streets for them. There is joy in the
fact that you can have Kolkatas famed
puchkas, jhalmuri and chana jor garam
without having to ever leave the hotel.
2 4
6 3 5
114 114 Intelligent Entrepreneur February2014
Intense feelings of inadequacy and shame
over such a simple word, too
This reply, every single time: Dear Susan, I dont work
there at headquarters,though it does sound tasty.
Best, Phil.
Eight separate replies of thx.
Seatmate hums aloud to the
music on his headphones
Ongoing neuroses, depression, inner turmoil, permanent
banishment from Burrito Bobs Lunch Truck
e-mail distribution list
Silent rejectionwithering and cold
E-mail recipient Googles softball injury and sends most
graphic image back to you. (Note to reader:
Do not Google softball injury.)
The pain of wondering whether those enthusiastic
responses are authentic or obligatory (aside from the
replies that say only Unsubscribe)
UNDERREPORTED CYBERCRIMES
ROSS McCAMMON

C
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P
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P
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CRIME
#cybercrime #ugh
PUNISHMENT

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c
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A
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r
i
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h
t
s

r
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s
e
r
v
e
d
.
Referencing the cloud without really knowing
what youre talking about
Including all employees, even those who work
from home or at branch offices, on the Alert: Burrito
Bobs Lunch Truck is outside!!! e-mail distribution list
CCing eight people in one e-mail
Working on your computer during a red-eye flight
when everyone around you is trying to sleep
Using a scathing Yelp review to work through emotional
issues that have nothing to do with and run much deeper
than any feelings regarding the admittedly marginal
chimichanga you had for lunch
Indiscriminately inviting everyone on
your contact listeveryone youve merely had
some sort of contact with, however minimal
to connect with you on LinkedIn
E-mailing a picture of your
softball injury to staff
E-mailing pictures
of your children to staff
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BY DESIGN: DILIP KAPUR OF HIDESIGN ON CRACKING INDIAS LUXURY MARKET P46

www.entrepreneurindia.in FEBRUARY 2014 VOLUME 5 ISSUE 6 `100

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