Archive for October, 2010

Entrepreneurs dilemma: Is my business venture fundable?

Sunday, October 31st, 2010

Companies have become easier to build. There are fewer breakout companies with the size of JustDial, Via, One97, etc. Should the entrepreneur build a company to cover the expenses and have a good supporting income? Or build a business which is large enough to be venture-funded with an exit the size of MakeMyTrip?

This is classic entrepreneurs dilemma when starting out. The choice a founder makes and the venture he is building would determine the outcome. I was at recently concluded unpluggd2 event where someone asked the same question.

A very interesting blog post is doing the rounds and was shared by Shashank, Sameer and others. Quoting the bullet #41 & #42:

41. Know what kind of company you are trying to build.  There are very few Googles and Facebooks.  A good outcome for your business might be a $10M exit or a $20M exit or a $100M exit or no exit at all.  Plan for the business you want to build.  Don’t just shoot for the moon.  From a money-in-your-pocket and return on time spent standpoint, owning 20% of a $20M exit in 2 years is much better than owning 3% of a $100M business in 5 years.

42. Related to #41, understand whether your business is a VC business or not. A VC business is expected to deliver 10x returns to investors.  That means if you’re taking money with a $5M post-money valuation, the expectation is that you are building for a minimum $50M exit.  $10M post-money valuation = $100M target.  That’s not to say that you might not sell the company for less and everyone involved might be happy with that outcome, but that’s not what you are signing up for when you take VC money with such a valuation.  Know what the implications of taking VC money are and what it means for expectations on you.

I don’t have to add any thing–the bullets say it all. You can overcome this dilemma by answering the following:

  1. If I take Rs. 1 crore from an investor, can I return Rs. 10 crores back in 5 years or so?
  2. Can the business double it’s revenues every year without adding a lot of people to it?
  3. If my neighbor finds out about my business, can he also build it?
  4. Am I building something which very few people have built?
  5. If there is a list of top 100 innovative businesses, would the business qualify?

It’s totally fine, if your business is not a venture fundable business. A lot of businesses are like that.

Are you a journalist / writer with a passion for politics? Do you care about this country?

Sunday, October 24th, 2010

bandeBande Mataram. Samachar Darpan. Kesari. Ghadar. Somprakash. Sudharak. Young India. Akali. Pratap. These are the names of the newspapers which played an important role during India’s freedom struggle. Printed on paper, they were the mouthpieces of the revolutionaries. The newspapers during those days brought people of similar ideologies together; a vision of free India and a burning desire to end the oppressive rule of British empire.

Today in free India, the newspapers have been taken over by business houses — there is far more advertising and commercial content being peddled to the masses than before. From soft-porn, cleaving-doting images of celebrities to pure gadgetry which is out of the reach of the common masses. The serious issues of corruption, nepotism, bribery, lack of empathy towards the needs of the common is overlooked by larger parlays of ministerial horse-trading. Sometimes, it takes time to figure out for whom the day’s paper was edited.

On the flip-side, the exciting part is that world is coming full-circle. Internet is bringing people together and giving choices. Internet gives an opportunity to connect, collaborate and bring together a voice which can be amplified several 100 times. US President Barrack Obama’s online campaign has shown us how voices from individuals can easily become a movement. It also shows that a web-only political news website like TalkingPointsMemo can win awards for it’s unbiased coverage on legal, political and social matters which are ignored by the main-stream media. The power of Internet also shows in the form of Huffington Post, where it is now a leading destination of social, political and business commentary from 3,000 eminent writers from politicians to policy experts to celebs.

During the Indian freedom movement, Bhagat Singh used to edit the Amritsar newspaper named Akali and contributed regularly to several others. In one such he wrote (edited) :

“The people generally get accustomed to the established order of things and begin to tremble at the very idea of a change. It is this lethargical spirit that needs be replaced by the revolutionary spirit. Otherwise degeneration gains the upper hand and the whole humanity is led stray by the reactionary forces. Such a state of affiars leads to stagnation and paralysis in human progress. The spirit of Revolution should always permeate the soul of humanity, so that the reactionary forces may not accumulate (strength) to check its eternal onward march. Old order should change, always and ever, yielding place to new…”

India is at the inflection point of revolution; we are seeing excesses of everything. Just like the days of British Raj, one sector of the society has access to the necessities (and more) of life, whereas a large part is devoid. The revolution can be brought only by stitching of information and recirculating the same to the masses in turn bringing awareness.

I believe with the power of Internet, there is a need to create a new mouthpiece of the common man, just like Mahatama Gandhi did with ‘Young India’ or Bipinchandra Pal did with ‘Bande Mataram’. We at Morpheus want to play a role in this change; if you are a passionate writer or a journalist and think you can persevere for next 5 years; away from the niceties of a mainstream media publication, and create such voice online for 999 million Indians; I would love to talk to you.

Image credit: Sri Aurobindo Society

Don’t copy my content: Can you build a business on subverting plagiarism?

Thursday, October 21st, 2010

Last week twitterverse had activity around India Today lifting pieces from the Slate magazine and republishing. The editor apologized, later. This is not an isolated incident and has become increasingly common as content becomes a currency for generating revenues. This will become more important as the content volume increases and the legal structure gets

Wikipedia Plagiarizetightened. If you know the alleys of “dark-web”, there are scores of sites who do a hedge between adsense / adwords for a 2-3% margin on incoming vs. outgoing clicks. Most of them rely on a mash-up of content sourced through various means.

Every piece of content on the web is written / created by people who take time to research and write about the topic. Not every body wants to monetize, they just want to write.

Plagiarism is not just for the “commercial” web, but it is becoming increasingly common in the academia where students are lifting texts and adding it to their thesis. One such incident was brought to light in India where a professor and his students at IIT-Kanpur lifted pieces from Wikipedia (come on!) and other journals for their research and are now under reprimand.

Catching plagiarism is not easy without tools. There are a handful of  free / paid tools on the web. A few of them are doing great work. But, I think a lot of more can be done and there are large problems to be solved around plagiarism (without going to specifics of the ideas I have). We are looking for entrepreneurs who can build web applications around this problem and build a business on this. If you are geek / scientist / hacker then drop a note and participate in batch 5 of Morpheus.

Read more about Plagiarism at

Picture courtesy Krista76

3 demons the startup entrepreneur must kill

Sunday, October 17th, 2010

This post is about young ventures which are less than 18 months old and maybe applicable to others as well.

I’m on my way back from the jungles of Tamilnadu, where I was off-grid for the best part of the week. Trekking, bathing, detoxing, imbibing nature, completing half-read books, reflecting on the last 24-month jaunt in India and pondering about the future. Today marks Dussera, a Hindu festival, where as per mythology, Lord Rama’s exile culminates with the killing of demon king Raavan.

Continuing the tradition, large effigies of Raavan is burnt along with his two 258562356_5e965073e5_mother cohorts viz. Kumbhakarna and Indrajeet, to celebrate the victory of  good over evil.

A startup’s journey is crowded with demons, internal and external, who are ready with their poison arrows. One wrong stance leads to a certain gnawing death. An entrepreneur in business, who has started up, faces several such demons. Based on my experience working with The Morpheus portfolio companies, coming out victorious is just another milestone:

  1. Feature overload Solve a small problem first, get the version 1.0 of the product out. Iterate quickly with feedback, instead of building features for every customer under the sun. Think what you can build as a minimum viable product, keeping a target customer in mind. Feature overload can easily be tackled by (a) Smart prioritization (b) getting feedback from potential customers, and (c) simply trusting your instincts.
  2. Monetary shenanigans Startups are not about starvation, but it’s about being efficient with money. Kill your money demons. Some to be killed while starting up and some on the way (a) Save enough for the journey before taking the plunge (b) Ask family/friends for help (c) If you have a few customers using your product, then talk to a few individual angels (d) Get an incubator to support you. Talk to us at The Morpheus
  3. People & Teaming Issues One of the major pain point a young venture faces is around people. Issue around people is the biggest demon. You may not have a team, recruiting the right people is a demon. If you have a team then making sure that they are motivated and ready to deliver is another. And then god forbid, issues between founders is yet another. A lot of young startups go on the wayside due to strained relationship between the founders or the founding team than anything else. There are a lot of ways of dealing with people/team related issues including (a) Right motivation for everybody in the journey (b) Keeping a clear line of communication and communicating more often than not (c) Not making assumptions about each other (d) Mutual respect for each other (e) Letting it go

These demons are multi-headed and get reborn. Killing them once is not enough. They come back in different life forms; like the mighty Raavan, who had consumed the nectar of immortality; only to be killed later with a strategic arrow.

A very happy Dussera to all and may you kill all the demons lurking in your venture!

Picture courtesy Jigisha.

Competitive Density Matrix: Sizing up your product/features against others

Monday, October 11th, 2010

This post suggests a technique for analyzing competition & feature comparison against competitive products. If there is a better name for this, feel free to suggest.

Ignorance is definitely not bliss for a startup CEO when it comes to sizing up the competition. You have to know the other players in the business, what they are doing, what products & features they have and what markets they are operating in.  When you propose your product/plan/idea to prospective employees or investors — the first thing which goes in their mind is ‘scanning the competitive landscape.’

There are several traditional ways of sizing up the competition, including (a) drawing MxN matrices with company names on the left & features on the top and simply a (b) 2×2 quadrant (eg. Gartner’s magic quadrant) with companies plotted in clusters using 2 broad parameters. The picture below shows the traditional MxN style competitive analysis comparing Wikis (on the left) and their features (on the top):

MxN competitive analysis

MxN competitive analysis

Competitive Density Matrix is a different way of sizing up the competition. The perspective is to turn the matrix inside out by plotting features on the left and weights (Bad, Average, Excellent) on the top. You mark the companies at the intersection (cells) based on your knowledge of who are the companies and what is their depth of implementation of that feature. Here is the outline comparing the wiki platforms with ratings. The companies are entered in the cells. The traditional MxN competitive matrix can be re-purposed as below:

Competitive Density Matrix

Competitive Density Matrix

After you have “plotted” the companies against the features, next is the analysis to detect cells which have higher occupancy while some have none. Here is a an analysis:

Competitive Density Matrix: Cell density & whitespace

Competitive Density Matrix: Cell density & whitespace

The analysis from the above example of the wikis shows us “whitespaces” and “heavily competitive spaces” as follows:

  • The File uploading feature in various Wiki software is implemented by everybody and is mature
  • The inline HTML feature requires strengthing up so does the wysiwyg feature

The objective which competitive density matrix helps you achieve is:

  1. Drilling down into the features which you are planning to build in your product and size them up against your competition
  2. It goes beyond the broad level quadrants and simple Yes/No analysis but helps you assess which areas have been zeroed in by other players
  3. If the white space you see corroborates with a customer feedback or gap or a unique IP you have built, that could be a good differentiator