• SUBMIT YOUR BUSINESS PLAN

  • Facebook Page

  • Follow me on Twitter

  • Take the survey and earn Rupees 20 talktime instantly.

  • Contact Us

Mindshare predicts platform and media trends in 2014

Mindshare, is one of the leading media firms in the world with offices across 115 cities. It handles media buying and selling for brands such as Unilever, IBM, HSBC and Volvo among others.

The firm recently released its digital outlook for 2014 to predict trends across platform and media, consumer technology and digital marketing. YourStory presents to you this indepth report in two parts. First up is platform and media trends.

Read on for indepth insights.

1. New building blocks of digital content

Constant experimentation with the new building blocks is key to winning in mobile Thanks to the shift in consumption of digital content towards mobile devices, increasingly digital content is being packaged in smaller ‘building blocks’ which can be routed across mobile networks and suited to smaller screens. Examples of these new building blocks include Twitter’s ‘Cards’, short-form social video (Vine and InstaVid), ephemeral content (Snapchat), and Buzzfeed’s ‘Listicles*’ – which have enjoyed massive growth across platforms like Facebook and Twitter. The one thing that all of these new building blocks have in common is their inherent shareability.

The opportunity : Many brands have already tested some features of Twitter Cards, but there are 8 in total so we recommend testing all versions, and supporting these with paid media. Similarly, many brands have tested Vines and InstaVids, but there is more experimentation needed – with support from paid media.

2. Clipping & sharing live TV/gaming video content

livesharingpostheadReal-time sharing of live footage just got easier. New technology allows the capturing and immediate sharing of live content from video-based entertainment (eg TV and Console gaming), either by broadcasters, or by users themselves.
Twitter launched their ‘Amplify’ product in the UK at the end of 2013 which enables sponsors of programmes to work with broadcasters to distribute sponsored instant replays and footage in real-time as the content goes out on air. This can all be ‘amplified’ using paid media in the form of Promoted Tweets which will allow this instantly-distributed live content to be targeted to the most relevant audience.
Similarly, Playstation and Xbox’s new consoles also allow in-game footage to be shared in real-time – eg the goal you just scored in FIFA14.

The opportunity : Be one of the first brands to do a Twitter Amplify campaign and join the small but elite cadre of brands who are leveraging live TV content across social.

3. Ecosystem integration
Making the most of Google. The power of the entire Google ecosystem has yet to be exploited by most brands. Over time there have been more and more integrations between Google products – eg a single sign in across all areas – and recently we have seen a step-change in the level of integration. Of course this is largely driven by a desire on Google’s part to create more connected experiences for their users, but these developments have the useful side-effect for marketers of being better able to join the dots between content, search and social.

The most recent development has been the integration of Google+ ‘commenting’ with Youtube comments – effectively allowing a conversation about a piece of Youtube content to live and grow across both platforms. This particular development has been beset by ‘spam’ issues, however we believe that there is a significant opportunity for brands in the medium term. The reason for this is that social signals are becoming increasingly important in Google’s natural search algorithm, so an integrated approach to the entire Google ecosystem across content, search and social is gradually becoming more important for brands.

The opportunity : Explore a true partnership with Google to leverage each area of the ecosystem and measure the incremental effect of bringing all elements of their portfolio together, using content as the glue.

4. Mobile social networks & messaging

Messaging-Apps-SMSPrivate messaging makes a fight-back. Dedicated mobile messaging apps like WhatsApp, Snapchat and Kik are growing at a rate not seen since the early days of social networking. WhatsApp now has over 350m users globally and is growing exponentially. Meanwhile, Facebook stated in a recent earnings call that it was seeing a “decrease in daily users, specifically among teens”. So, whilst teenagers are still on Facebook, it would appear that they are increasingly turning to dedicated messaging apps which are more focused on private messaging. Essentially, teens are looking for platforms where they can be less inhibited than they are on Facebook. On Facebook there is always a risk that your parents or family could see sensitive status updates.

The opportunity : When a big digital trend develops in the teen space it is always worth brands watching closely. The opportunity for brands is clearly limited by the fact that currently there is no available media inventory. However, Snapchat did just hire Instagram’s advertising development director so it appears they are developing an advertising-based business model. In the meantime, it seems the best brand use cases on these messaging platforms are in mimicking or taking advantage of current user behaviours and acting like those users – eg Absolut.

5. Special interest social networks
Whilst Facebook has been busy cornering the ‘social graph’ market, and Google has been focusing on the ‘knowledge graph’, there has been an explosion of new community platforms which aim to corner specific vertical interest areas. People with very specific interests are finding that their specific interests are better served by bespoke targeted networks.
There are already thousands of examples of these special interest-based social communities – eg Learnist (essentially a Pinterest for teachers), Letterboxd (film buffs) and styledon (fashionistas).

The opportunity : Brands need to develop an understanding of the opportunity for adding value to users within these specialist vertical interest networks. At the very least – the depth of interest-signal to be gained by authentically working with these niche vertical communities should easily outweigh the relative lack of scale.

6. Paid-for digital entertainment content increasing exponentially
Brands must adapt to the new premium landscape. A few years ago, piracy was king in the premium digital content world. Nobody paid for digital content. Nowadays – whilst filesharing sites are still popular amongst younger demographics – it is the turn of premium content to be king. Paywalls around news websites (eg News International), premium versions of social networks (eg linkedin), and an exponential increase in people who are prepared to pay for music and film (eg iTunes, Netflix, Blinkbox) are all evidence of a bright future for paid-for digital content.

And with increasing numbers of users prepared to pay for streaming or downloads it means there is a corresponding decrease in advertising opportunities around the most premium content.
So how can brands reach these ad-free premium content audiences?

The opportunity : The long-term opportunity for some brands is to publish premium quality branded content themselves. But this is not suitable for all brands and also requires proper sustained investment over time.
In the short term there is an opportunity for all brands to advertise at the point of entry in to premium paid-for content – eg within Xbox Live – or to develop more integrated promotions with streaming partners like Spotify or Microsoft – eg to subsidise free streaming of movies.

7. The Internet of Things

iotPhysical objects become internet-enabled and connected. Gone are the days of computers, smartphones and tablets being the only objects to connect to the internet. Today, nearly everything around us from fridges to light switches & TV remotes to cars has the ability to become an inter-connected web object. Today there are 12 billion devices across the world that can connect to the internet, but by 2015 Cisco predicts that there will be 25 billion – jumping to 50 billion by 2020 (almost 7 times the number of people of the planet). As an example, UPS fitted trackers to all their delivery vans then analysed the route data. They calculated that vans sat waiting to make left turns equated to 206 million minutes of idling time. As a result, they re-routed their delivery routes to minimize left turns and saved more than 1.5 million gallons in fuel.

The opportunity : The opportunity is in using the data produced by internet connected devices to enhance consumers’ lives, making tasks quicker more straightforward or adding genuine value. Additionally, there is an emerging opportunity to create branded apps which tap in to connected objects (eg branded recipe app for connected fridges) For brands there is also potential to work with partners who are taking a leadership position in this space. For eg Telefonica/O2, who in 2013 signed a £1.5bn deal to deliver smart meter systems in the UK. Their aim is to install 53m smart meters in UK homes by 2020 which could become the predominant platform for ‘the internet of things’ in the home in this country.

Advertisements

Mobile Startups: Insights from Mobile India 2014 conference

The Mobile India 2014 conference, held recently in Bangalore, showcased a range of opportunities in the space of Social, Mobility, Analytics and Cloud (SMAC). In addition to SMAC, there are also opportunities opening up in security and smart sensors, leading some speakers to joke that the acronym SMAC should actually be SSMACS!

In an earlier article, we looked at the top trends in enterprise mobile as identified by speakers from the 2014 conference. The 2013 edition of the conference also featured a panel on mobile startups (see my coverage here).

Mobile FI

“Mobile is the centre, cloud is the backbone and analytics is the nerve centre of digital business,” said Manjunath Gowda, CEO, i7 networks. Here is my pick of the Top 15 tips for mobile startups, based on the discussions at the Mobile 2014 conference.

1. Focus on solving real business needs

We are living in an age of realtime information overload. $300,000 is spent on online shopping every minute; 600 videos are uploaded to YouTube each minute; Facebook has over 700,000 updates each minute; and Twitter generates 12 terabytes of data daily – and this is just the tip of the proverbial data iceberg. However, for analytics to make sense of this data  is much more than just statistics; it connects realtime occurrences to the big picture and to pressing business needs and insights. Many startups are going after the low-hanging fruit, but there is much more value in sensemaking and decision support.

“The key challenge today is the inability to think big and ask the right questions to make a difference to businesses,” observed Venkatesh Vaidyanathan, VP, Product Management, Business Analytics, SAP Labs.

For example, true benefits arise when startups connect Big Data to predictive maintenance, brand sentiment, threat detection, product recommendations, fraud detection, realtime risk mitigation, realtime demand/supply forecast, personalised care, and resource optimisation. In this regard, Bangalore company Ramyam Intelligence Lab is rightly positioned by offering analytics and Big Data solutions to telcos to help address their needs of personalisation, churn reduction, loyalty management, and cross-selling of services.

2. Tell a story

The business opportunity lies not just in crunching data and unearthing patterns but building a larger narrative, a compelling story. “There are stories lurking in data. Analyse it, capture it, tell a story from it, make it actionable,” urged S. Anand, Chief Data Scientist, Gramener.

Fields like analytics are as much art as science, and players entering this space need to mix analytics skills with IT. Winning customers will depend not on technical skills but on the ability to deliver insights, discovery and new business knowledge – and thus clinch deals with powerful stories.

3. Address enterprise mobile

Much attention understandably focuses on consumer apps, but there is a world of enterprise and productivity apps also fast emerging. Startups can show how SMAC can be used to improve field worker productivity, for white collar and even blue collar workers. Services offered as “also mobile” will become “mobile first” even in the enterprise environment.

More than 50% of employee devices are purchased on their own. 70% of professionals will use smartphones by 2018, said Archana Kamath, Manager, Mobile CoE, EMC Software and Services India. BYOI (Bring Your Own Identity) is the next wave of consumerisation of IT in enterprise space.

Mobile cloud and workflow tools are now becoming available for SMEs too, and a new wave of value is being unleashed. Mobiles give companies not just deep consumer insights but continuous consumer insights, according to Alwyn Lobo, Senior Mobility Solutions Architect, IBM.

4. Offer security solutions

The increasing digital nature of the economy is also creating chaos, and the ‘attack surface’ of businesses is increasing via mobile. This calls for tools and companies who can provide better monitoring and governance of enterprise networks. For example, Misys GeoGuard uses customer location to reduce fraud for banks. The SnapChat hacking incident shows API vulnerability in world of mobile. API security will play centre stage as mobiles become gateways in the Internet of Things, predicted Shreekanth Joshi, Vice President, Cloud Practice Head, Persistent Systems.

“Look out for Trojans like mRats, host-based jammers, and tunnel borers,” cautioned Manjunath Gowda, CEO, i7 networks. 71% of mobile devices have OS/app vulnerabilities, and there has been 600% growth in mobile malware over last couple of years. 90% of BYOD enabled Indian businesses had a mobile incident in last 12 months, according to sources cited by Gowda. This opens up new markets for security products and services.

5. Watch the competitive space

Startups should aim for a ‘blue ocean’ strategy and enter fresh waters – or else figure out a way to do things better, faster, easier and cheaper than existing players. Several existing players and case profiles were highlighted by Dr. Sanjoy Paul, IEEE Fellow and Managing Director, Accenture Technology Labs India: such as blippar (mobile ads with augmented reality), and use of analytics by Walmart to predict product demand and by Google to forecast ad keyword demand. This reflects the overall trend of increasing real time bidding (RTB) exchanges; static models are declining. Reach.ly mines Twitter to help hotels reach potential guests in real time. Coursera is using analytics to better serve learners. FitBit and OnStar are other good examples of realtime analytics in action.

6. Address the “Four Vs” of Big Data

Big Data is important because there is too much data and too little time for businesses to take informed decisions in realtime. Hence startups should find opportunity in one or more of the “four Vs” of Big Data: volume, variety, velocity, value. In other words, they should show business leaders how they can help tackle data overload, data diversity, realtime data, and mining of insights.

7. Watch sensor networks, M2M and IoT

The Internet of Things (IOT) is currently at early hype stage, but will soon become mainstream, as the recent Consumer Electronics Show indicated: this ranges from wearable devices to smart tennis rackets, and also opens the door to a new range of analytics products and services. Mobiles are cumulatively becoming sensor aggregators, said Shreekanth Joshi, Vice President, Cloud Practice Head, Persistent Systems.

In healthcare, for example, the ‘digitised patient’ will become the hub for measuring, modelling and predicting treatments based on instrumentation and on-body sensors. Typical M2M scenarios encompass energy and water meters, cars, cranes, vending machines, fridges, air-conditioners, and ATM machines. The ATM attack incident in Bangalore shows the importance of monitoring all locations via M2M, said S.Girish, COO, ConnectM.

8. Move beyond location to context

Location and context are blending together to create new kinds of mobile-powered services and advertising. For example, a Tokyo company recruits drivers for two-hour time slots in different neighbourhoods; the matching is based on proximity of available drivers. Analytics coupled with mobile is a powerful combination.

9. Choose cloud for scale

Cloud computing drastically reduces barriers to entry for infrastructure improvement for startups in the growth curve, as shown by the acceleration of companies such as Animoto. The costs for launching a startup and promoting it are much lower these days than before, thanks to cloud infrastructure and social media. However, it should be noted that the business fundamentals of team management and financial models remain unchanged.

10. Evolve from being aware to becoming smart

“Tomorrow’s enterprise is hyperconnected, super-aware, and borderless. Will it be smarter?” asked Ramesh Adiga, AVP & Head, Global Delivery, Mobility Unit, Infosys. The next stage of mobile evolution is ‘superphones’ driven by platforms and lifestyle devices.

Harrah’s Casino in Las Vegas is using Big Data in blackjack tables to figure out how to make gamblers comfortable and stay longer. Designer shoe store Meatpack in Guatemala uses realtime analytics to ‘hijack’ customers from competitors. “Analytics is changing the face of what we usually think of as mundane business,” said Sanjoy Paul of Accenture Labs. Startups need to go beyond ‘the usual suspects’ and identify opportunities right at the street corners and not just main street, and help clients move ‘from dashboards to decisions.’

11. Track emerging business models

The acquisition of Bangalore-based app optimisation company Little Eye Labs by Facebook for an estimated $15 million has shown that app infrastructure and ecosystems are also ripe targets for startup activity. An interesting model to watch is MBaaS – mobile backend as a service, as shown in app cost estimation and cloud models (Kinvey, Appcelerator, FeedHenry). Nicira can reconfigure physical network into multiple virtual networks.

12. Think big

Startup founders should not just look   at the idea or product but also the overall context, customer needs, scalability, UI/UX, andMobileIndia222 viral effects, advised Bharati Jacob, Founder Partner, Seedfund. For example, Limo service Uber may work well in Bangalore, but not have as much impact in Bombay where there are reliable taxis everywhere, she observed.

Many startups with good models focus largely on the local market and are not thinking global from the early stages. A few are, such as Zomato from India. “Maybe the Indian education system does not encourage us to think big and aim high,” added Jacob.

13. Make mobile marketing more targeted

Mobile marketers should stay away from the ‘spray and pray’ model of mainstream media, advised Ashvin Vellody, Partner, KPMG. There are numerous ways in which startups can help marketers experiment and refine ways of segmenting users and messages right down to, for example, passengers stranded  at airports and train stations.

14. Focus on social discovery and not social shopping

For a range of reasons, social shopping online has not worked well, but mobile social media has accelerated the discovery, inspiration and validation of online shopping, according to Kaushal Sarda, CEO, Kuliza Technologies. Social media is about conversations, so digital marketers and advertisers should figure out how to be part of or stimulate conversations, he advised.

15. Multiple mobile payment models will co-exist

Mobiles accelerate consumption of content and commerce, according to Ravi Pratap, Co-Founder and CTO, MobStack. “Multiple kinds of m-payment models will be needed in India, including via mobile operator billing as in the US,” said Pratap. Tier 3 and Tier 4 cities are takeoff markets for e-commerce in India, for everything from the latest books to lingerie sales, said Ashvin Vellody, Partner, KPMG. Retailers in India are executing their marketing campaigns on mobile social media now, not just PC-based Facebook, added Hrish Thota, Senior Manager, Social Computing, Happiest Minds.

In sum, mobile is pivotal to sense, influence and fulfill demand. “Mobiles will be ubiquitous and pervasive,” said Adiga of Infosys. But only an estimated 15% of Fortune 500 organisations have a concrete mobility strategy, opening up a wide door of opportunity for players in mobile space.

“Every business is a digital business, thanks to mobile, social, cloud and analytics. This is happening on a scale not possible before. SMAC helps companies simplify, accelerate, adapt and make better decisions,” said Accenture’s Paul.

Interesting questions to ponder – possibly at next year’s Mobile India conference – would be whether Facebook will be eclipsed by the next generation of social media, how cross-pollination between sectors will throw up new opportunities, and whether regulation and government may dampen the enthusiasm of the tech sector.

Opportunities available for entrepreneurs, investors, mentors and experts to add value to the Indian healthcare industry.

Healthcare has become one of India’s largest sectors – both in terms of revenue and employment. Although the country’s healthcare industry is projected to continue its rapid expansion, with an estimated market value of US $280 billion by 2020, increased population growth in India’s low-income communities has resulted in a lack of affordable and easily accessible quality healthcare for millions of people.

As a comparison China has 30 hospital beds every 10,000 people, whereas India has only 12. The figures are even more alarming for nurses. In the United States there are 98 nurses per 10,000 people and in India there are only 13.

Despite government efforts to improve widespread access to quality healthcare, India’s existing infrastructure continues to be insufficient resulting in limited treatment options, especially for low-income families.

Recognizing the need for innovation within healthcare, in 2012, Ennovent partnered with the University Impact Fund, one of the world’s first student driven impact-investing firms, to research the opportunities available for entrepreneurs, investors, mentors and experts to add value to the Indian healthcare industry.

It was uncovered that in rural villages and towns, where the majority of Indians reside, a staggering demand exists for affordable remedial healthcare options such as the manufacturing, distribution or provision of various healthcare products and services. Highlighted below are some of the areas within healthcare that are well positioned for innovative business models.

 

India’s eye care sector is ripe for innovation

In the context of India’s eye care sector – a subsector that is currently in strong need of practical solutions – the business models used by organizations such as Vision Spring and Drishti Eye Care are excellent examples of addressing the issues of affordability and accessibility through innovation.

 

Photo Credit: globalvillagedirectory.info - Picture may be subject to copyright - LV Prasad Eye InstituteVision Spring uses the micro-franchise approach to create vision entrepreneurs that aid in the distribution of affordable reading glasses to BoP customers. Whereas Drishti Eye Care uses a three tier hub and spoke model which offers primary eye care through telemedicine supported vision centers, and screening camps and surgical care at district hospitals. Both models are leveraging technology and unique distribution approaches to improve service quality overall.

Improved Neonatal Care will curb maternal mortality

Research indicates that 20.9% of babies in India are born prematurely due to pre-term complications such as hemorrhaging and hypertension. Since incubators are commonly unavailable outside hospitals, premature infants are susceptible to lung disease and hypothermia.

Significant opportunity exists in the manufacture and distribution of products such as incubators, resuscitators and birthing delivery kits that offer pre-mature babies born outside of a hospital and mothers a greater rate of survival. Innovations such as Embrace, affordable infant warmers regulate a baby’s temperature without electricity, are well placed to scale widely within India.

 

Emphasis on primary care will save lives

Current healthcare programs focus disproportionately on specialist care rather than primary care. By 2020 chronic diseases such as diabetes, which can be typically remedied through primary care providers in the early stages ,will be responsible for seven out of every ten deaths in emerging markets such as India.

 

Vaatsalya, India’s first hospital network operating in remote towns and villages is an example of an innovative enterprise working to reduce the primary care gap. By hiring doctors that live in the local area and focusing less on specialist care, Vaatsalya is able to provide quality primary and tertiary care in remote areas cost-effectively.

Paving the way for social enterprises to fill service gaps

As India’s healthcare industry continues to evolve, significant innovations in products and services will ensure that low-income people have access to affordable healthcare products and services.

 

Development agencies, enterprise incubators, innovation accelerators, private investment funds as well as foundations are all important vehicles to support these healthcare innovations. At the same time, public private partnerships continue to be important.

Photo Credit: Rama Lakshmi/The Washington Post Ennovent is an integrated model that discovers startups, refines their business models through on-the-ground mentoring, provides finance and enables access to specialized expertise to grow operations and scales impact. These kinds of service enable enterprises to create sustainable impact on the lives of low-income people in India.

Overall, significant opportunities exist for entrepreneurs, investors and experts to have a positive impact on people living in low-income areas with limited access to affordable healthcare.

Content is Key to Internet

Internet landscape in India is transforming very fast thanks to mobile penetration. The latest IAMAI report says India has 200 million internet users. As of June 2013, India had 873.36 million mobile subscribers of which 176.5 million users accessed internet through their mobile device.  Every month India adds three million mobile internet users.

Trends

The media in India is focusing a lot on e-commerce portals for the past few years but there is a considerable amount of activity in the content space too.

Content portals are not limited to news and entertainment alone. That was true a decade ago but now there are several speciality portals, or verticals, in content space – lifestyle, automobile, education, sports, health. Comscore reports repeatedly demonstrate that the consumption of content portals is on the rise. This is expected because internet now is used by all sections of the society – students, professionals, retired people and women.

But there is a huge misconception even today that internet is largely for English speaking people. We at Oneindia have been investing in the language space for over a decade now. Language portals did not take off for a long time because internet penetration was limited to Tier-1 cities. Today, with mobile internet being available at affordable prices, we see a huge surge in consumption of various online services, leading to a number of trends as described below.

1. Infographics

The attention span of readers is shrinking by the day. Alerts from Facebook, Twitter, SMS, and phone calls all interrupt you while reading long-form content. Users want to get the same amount of information but not necessarily in text form – especially as an infographic.

Creating good infographics can be expensive as you need resources with various skills. A designer cannot create a good infographic unless an analytics person presents the information.

2. Content for mobile

Earlier we created content for the desktop user. Mobile data in India became popular by way of SMS; many SMS companies grew aggressively but they died because of the government regulations (SMS limit and DND list).

According to the latest reports, the mobile internet user base is bigger than the desktop internet user base in India. The presentation of content has to be different for a mobile and tablet device. Are publishers geared up for that?

3. WhatsApp replaces SMS

We love anything that is “free”. WhatsApp was the perfect product we were looking for. BBM from BlackBerry offered a similar functionality but limited the circle to BlackBerry users. The cross platform availability of WhatsApp is very attractive. Major political parties are using WhatsApp for interacting with their volunteers. Content publishers should look at generating content to share on WhatsApp with the hope it would get viral.

4. Responsive design

Responsive design (RD) is one of the best ways to render the same content differently depending upon the type of device. While RD is not difficult for simple sites it can get tricky while implementing for complex sites. The best way to tackle RD is by coming to terms with what will be displayed for desktop user vs. a mobile user. It is not necessary to display every pixel of your busy homepage for a mobile user; instead render a simpler version of your homepage for a mobile device while still maintaining the same URL.

5. Content for social media

Content publishers will have to pay a lot of attention to social media users. Facebook penetration in India is very high and the digital marketing team has already started treating it as an important referral source, may be even more than Google.  This means you will need to have a dedicated social media team, just as you have SEO team.

6. Local language

The mobile internet penetration is increasing in non-urban areas. These consumers will want to read content in their local language. In fact, many e-commerce services will need to have a language version to serve this big user base. Local content in local languages on the mobile will be a truly amazing combination.

7. Elections and social media

I have written on my blog about the effect of social media in the upcoming Lok Sabha elections. The election fever can already be felt on social media. Political parties and politicians will be using social media mainly as a two-way communication tool. They will keep a tab on the voter pulse through this medium. The advantage of social media is that politician can see the reactions first hand and in real time.

8. Video

The user base for online videos is very large because literacy doesn’t play a factor here. According to Google, almost one-third of the YouTube viewers in India access videos on their mobiles and spend over 48 hours a month on the website.  The popularity of online videos among all age groups is immense.  Earlier, YouTube was the primary platform to watch videos; today Facebook and Google+ have considerable amount of video content. Video has always been popular it will only get more popular in 2014.

Overall 2014 will be an exciting year for content players in India because of the growth of mobile internet, upcoming elections and increase in use of social networks like Facebook. Content publishers have a lot of work to do in 2014!

Small Business, Big Vision

There is so much written these days about how to attract investors that most entrepreneurs “assume” they need funding, and don’t even consider a plan for “bootstrapping,” or self-financing their startup. Yet, according to manysources, over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it.

According to the book, “Small Business, Big Vision,” by self-made entrepreneurs Adam and Matthew Toren, it’s really a question of need versus want. We all want to have our vision realized sooner rather than later, but it can be a big mistake to bring in investors rather than patiently building your business at a slow, steady pace (organic growth).

In fact, most of the rich entrepreneurs you know actively turned away early equity proposals. Too many founders are convinced they “need” equity financing, for the wrong reasons, as outlined in the book and supplemented with a bit of my own experience:

  • Need employees and professional services. Of course, every company needs these, in due time. In today’s Internet world, enterprising entrepreneurs have found that they can find out and do almost anything they need, from incorporating the company to filing patents, without expensive consultants, or the cost to hiring and firing employees.
  • Need expensive resources up front. Many people think that having a proper office and equipment somehow legitimizes their business, but unless your business requires a storefront, everything else can be done in someone’s home office, or a local coffee shop, on used or borrowed equipment. Consider all the alternatives, like lease versus buy.
  • Need to spread the risk. Some entrepreneurs seem to get solace and implied prestige from convincing friends, Angels, and venture capitalists to put money into their endeavor. If nothing else, these make good excuses for failure – no freedom, wrong guidance, etc.

On the other hand, there are clearly situations where your needs call for investors. Even in these cases, all other options should be explored first:

  • Sales are strong – too strong. If you are not able to keep up with demand due to lack of funds for production, and your company is too young for banks to be interested, you will find that investors love these odds, and are quick to go for a chunk of the action.
  • Your company has outgrown you. Some entrepreneurs are quick with creative ideas, and even excellent at managing the chaos of initial implementation. That’s not the same as instilling discipline in a larger organization, where most the challenge is people.
  • You need a prototype. When you have invented a new technology, you need expensive models and testing, including samples for potential customers. If you don’t have the personal funds to make these happen, investors might be your only option.
  • You need specialized equipment. If your solution depends on high-tech chips, injection molding, or medical devices, and you can’t get financing from suppliers, giving up a portion of the company to investors is a rational approach.
  • General startup expenses are beyond your means. Investors are not interested in covering overhead, unless they are convinced that you have already put all your “skin in the game” (not just sweat equity), and have real contributions from friends and family.

When deciding whether and how an investor can help you, remember that finding outside investors requires a huge amount of time and work, perhaps impacting your rollout more than working with alternate approaches and slower growth. Perhaps you really need an advisor rather than an investor.

Even under the best of circumstances, working with an investor requires give and take. More likely, you now have a new boss – which may be counter to why you chose the entrepreneur route in the first place. Maybe that’s why bootstrapped startups are the norm, rather than externally funded ones. You alone get to make the big decisions on your big vision.

[Book Review] Disciplined Entrepreneurship: 24 Steps to a Successful Startup

Many believe that entrepreneurship cannot be taught, but it is possible to teach people how to make great products and thus create a successful startup, as clearly illustrated in the insightful and actionable guidebook, ‘Disciplined Entrepreneurship.’

Bill Aulet is the managing director in the Martin Trust Centre for Entrepreneurship at MIT and also a senior lecturer at the MIT Sloan School of Management. He has launched initiatives like the MIT Clean Energy Prize, Energy Ventures Class, Regional Entrepreneurship Acceleration Program (REAP), “t=0” Entrepreneurship Festival, Beehive Cooperative, Entrepreneurs Walk of Fame, Corporate Innovators Sponsor Group, and Global Founders’ Skills Accelerator.

Bill has had a 25-year track record of success in business himself. He has directly raised more than $100 million in funding for his companies and led to the creation of millions of dollars in market value in those companies.

Many of the case studies in the book feature the company he founded, SensAble Technologies. The other case profiles in the book are from Aulet’s course, with startups in sectors such as footwear, water filtration, furniture shopping, baseball fantasy games, wind turbines, bio-sensors, landfill technologies, silent alarm clocks, arts education, skin care, digital marketing, and e-commerce for handicrafts.

The book also has a companion Web site (http://disciplinedentrepreneurship.com/) with case studies and other resources. Entrepreneurship is a team sport which can be taught and should be considered a legitimate profession and discipline, according to Aulet.

The book covers many iterative loops along the startup roadmap, and the steps are illustrated by Marius Ursache. It is not knowledge that sets you free, but action, Aulet explains. To begin with, entrepreneurs must have an idea, a passion, and preferably a tech breakthrough.

One chapter is devoted to each of 24 steps in the startup toolbox, and I have summarised them briefly in Table 1 according to six themes; each chapter makes for a superb read and is backed with references and resources.

Table 1:  Steps to a Successful Startup

Theme Steps Activities and Items
Customer identification Market segmentation, beachhead market, end user profile, TAM size, persona; next 10 customers Primary/secondary market research (users, benefits), word of mouth channels, qualities of customers, top-down and bottom-up determination of total addressable market
Customer offering Full life cycle use case, product spec, value proposition, core definition, competitive positioning Product acquisition/installation/payment, brochures and mock-ups, USP (‘secret sauce’ – eg. network effect, UX), meeting customer needs better than existing offerings
Product acquisition by customer Customer’s decision making unit, acquisition process of paying customer, sales process mapping Decision makers and primary/secondary influencers, budget cycles and times, adjacent customers, sales activities over near/medium/long term
Monetisation Business model, pricing framework, lifetime value (LTV), cost of customer acquisition (COCA) Models to capture value from customer (eg. subscription, licensing, ads), price points and ranges, charges and recurring fees, top down costs of lead generation and conversion
Product design and development Identifying key assumptions, testing assumptions, minimum viable business product (MBVP), proof of purchase List assumptions in the market and customer mindset, test through observations and polls, design basic product which customer will pay for and give feedback, demonstrate intent to purchase and engage
Scaling the business Calculate TAM size of follow-on markets, develop a product plan Determine product features for beachhead market, determine adjacent markets and product changes needed

Aulet distinguishes between SME entrepreneurship (more focused on non-tradeable jobs such as running a restaurant, with linear growth rates) and innovation-driven entrepreneurship (with investments, more risk, and potential of global exponential growth and profits).

He also highlights the unique nature of ‘two-sided’ markets which need two kinds of communities to succeed, for example buyers and sellers (e-Bay) or readers and advertisers (AdWords). This calls for multiple total addressable market (TAM) calculations and persona descriptions for each.

“Beachhead TAM calculation is your sanity check that you are headed in the right direction,” Aulet flags off in the beginning. It is a combination of customer base and estimated product price. Value proposition itself is a combination of how the product makes life better, faster, cheaper or less risky for the customer.

Entrepreneurs should stay out of the ‘reality distortion zone’ and not fall victim to their hope and hype; dealing with customer feedback – even from naysayers – will help focus on real solutions, Aulet advises.

‘Core’ aspects of the startup would be unique features such as network effects, outstanding customer service, lowest cost or best user experience. This will then need to be backed up with business models such as up-front charge, hourly rates, subscription, license, ad support, reselling of analytics, transaction fees, tiered models, shared savings and franchise.

Pricing should be flexible for a range of customers, example for early testers, lighthouse customers and co-creators. Lifetime value calculations are important to gauge the long-term viability of current and future products, and go hand in hand with calculation of customer acquisition costs.

Once a product has been launched, the startup founder then needs to address the challenges of building company culture for the long term, HR strategies, cash flow skills, and corporate governance.

“The world needs more and better entrepreneurs because our world’s problems are becoming more dire, complex and ubiquitous,” Aulet concludes.

The book has a number of witty and inspiring quotes, and it would be nice to end this review with some of them.

“Entrepreneurship is not only a mindset but a skillset.” – Mitch Kapor, Founder, Lotus

“While the spirit of entrepreneurship is often about serendipity, the execution is not.” – Joi Ito, Director, MIT Media Lab

“Ideas are a dime a dozen but great entrepreneurs are what create value.” – Paul Maeder, National VC Association

Financial inclusion: Banking the unbanked.

Pic courtesy: http://www.currencyofprogress.in

Pic courtesy: http://www.currencyofprogress.in

We recently wrote a post on YourStory on how financial inclusion poses a very real business opportunity for startups. In this post, we delve a little further into the social aspects of financial inclusion and the burning need for empowering India’s underserved sections.

Dr. K.C. Chakrabarty, Deputy Governor, Reserve Bank of India, has defined Financial Inclusion in these words, “…the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular at an affordable cost in a fair and transparent manner by mainstream institutional players.”

In an emerging economy like India, financial inclusion becomes a question of both access to financial products and also the knowledge about their fairness and transparency. Many people who fall in the unbanked category are not adequately informed about the nature of the financial services that might be available to them. Having proper delivery systems and information sharing mechanisms are important for promoting financial inclusion, but at the same time we can’t afford to ignore the demand side factors. Many regions, segments of the population and sub-sectors of the economy have a limited or weak demand for financial services. Their level of inclusion can only be enhanced once issues related to demand side have been addressed.

Government initiatives – heart in the right place but are the effective?

The Government of India’s agenda of inclusive growth is reflected in the kind of policies and regulations that the policy making and regulating institutions, like RBI, IRDA, PFRDA etc. have been developing over the past decade. There has been in multifold increase in the number of back branches, especially in rural areas; the branch network was around 8,000 in 1969 and now it is more than 89,000, spread across the length and breadth of the country.

The KYC norms for bank accounts with smaller sums of money have already been relaxed. In rural areas, new account holders can be introduced by local citizens. Public Sector banks are providing poor and marginalized sections of the population with a choice of a ‘no frills account’ where the minimum balance is nil or very small, but with restrictions on number of withdrawals etc., to facilitate easy access to bank accounts. Aadhaar can also be very useful for financial inclusion, as it provides all the citizens of the country a rather foolproof way of proving their identity in an easy and seamless manner.

However, these initiatives for strengthening financial inclusion are yet to have a substantial impact on the lives of the excluded population. Over half the Indian population is unbanked. Only about 55% of the population in the country has a deposit account and around 9% has credit accounts with banks. According to data from Reserve Bank of India (RBI), India is the home to largest number of unbanked families (more than 145 million). There is only one bank branch per 14,000 people. The total number of villages in the country is estimated to be more than around 6 Lakh, but the number of scheduled commercial banks (SCBs) and Regional Rural Banks (RRBs) stand at only 33,495.

Financial inclusion for small businesses – a possible solution

In all the hype about welfare initiatives for the bottom of the pyramid population, an important segment that often gets missed out is the small businessmen. According to the MSME ministry, there are around 26 million small enterprises in India, and only 5% of them have access to capital. Moreover, 94% of these are not even registered and have minimal records, making it even more difficult to establish income and expenditure tracking, required by the formal sector.

According to Tom Hyland, Co-Founder & Partner, Aspada Investment Advisors (an early stage risk capital fund for innovative businesses targeted at underserved communities), “The market for small business finance in India is significantly underserved by the formal sector, as often the only real source of capital is from an informal moneylender. Local banks often insist upon a significant security or/and collateral cover in addition to formal lending being a cumbersome, relationship driven process.” According to Tom, there is a dire need for lending models that provide much-needed working and growth capital to small businesses that would otherwise face difficulties in accessing funds and for which few alternatives exist beyond informal sources.

The effectiveness of this solution is that players working on financial inclusion will find it more lucrative, while masses will benefit from the trickle-down effect. Tom substantiates that, “Small merchants are the backbone of the Indian consumer economy, and improving access to credit for them is critical in order to sustain and improve the livelihoods of people (most of whom belong to the low income segment) that are employed in this sector, especially if credit tightens due to an economic slowdown in India.”

Some interesting work but lots remaining

Last year, YourStory covered the story of Kinara Capital, a young, nonbanking finance company (NBFC) that lends to micro and small businesses led by Hardika Shah. Kinara focuses on lending to those that are too big for microfinance but too small for commercial loans and reduces lending risk by acquiring reliable borrowers by plugging into existing supply chains, such as that of retail chain, Mother Earth. In the next five years, Kinara hopes to expand their portfolio to 20,000 loans, to create 100,000 new jobs, and to impact one million lives.

Another interesting player is Vistaar Finance, that targets the missing middle segment, consisting of customers with an annual income of Rs 120,000-1,000,000, which is not effectively served by the formal financial system. Vistaar has 2 primary lending products – Small Business Mortgage Loan of upto INR 20 Lakhs for upto 7 years and Small Business Hypothecation Loan of upto INR 60,000 for upto 2.5 years. They have a unique credit methodology wherein templates of cash-flow assessment are created by studying an overall sector, thereby by-passing the need for such statements for each borrower within that sector. These are then validated for individual borrowers by studying income, ability, intention, business sustainability & credit behaviour through non-traditional income documents & reference checks.

Learn more about the nuances of inclusive growth and find out the best ways to expand financial inclusion in India at FIPS 2013 – a global conference on Financial Inclusion & Payment Systems. FIPS is being organised at Eros, Hilton Hotel, New Delhi on 24-25 October. Connect with FIPS 2013, http://fips.eletsonline.com/2013/

Are You Creative ?

They say genius and madness often overlaps. In fact, numerous studies have been done on this. For instance, research done by Shelley Carson, an associate of Harvard’s department of psychology, an expert on psychopathology, has found a connection between high levels of creativity and strange behaviour and actions.

In his book Creativity: The Work and Lives of 91 Eminent People, Mihaly Csikszentmihalyi, seminal professor of Psychology and Management, also the Founding Co-Director of the Quality of Life Research Center at Claremont, writes about nine traits he found in creative people. Matthew Schuler has quoted it in his blog.

Creativity

Tell us if you agree.

01

Most creative people have a great deal of physical energy, but are often quiet and at rest. They can work long hours at great concentration.

02

Most creative people tend to be smart and naive at the same time. “It involves fluency, or the ability to generate a great quantity of ideas; flexibility, or the ability to switch from one perspective to another; and originality in picking unusual associations of ideas. These are the dimensions of thinking that most creativity tests measure, and that most creativity workshops try to enhance.”

03

Most creative people combine both playfulness and productivity, which can sometimes mean both responsibility and irresponsibility. “Despite the carefree air that many creative people affect, most of them work late into the night and persist when less driven individuals would not.” Usually this perseverance occurs at the expense of other responsibilities, or other people.

04

Most creative people alternate fluently between imagination and fantasy, and a rooted sense of reality. In both art and science, movement forward involves a leap of imagination, a leap into a world that is different from our present. Interestingly, this visionary imagination works in conjunction with a hyperawareness of reality. Attention to real details allows a creative person to imagine ways to improve them.

05

Most creative people tend to be both introverted and extroverted. Many people tend toward one extreme or the other, but highly creative people are a balance of both simultaneously.

06

Most creative people are genuinely humble and display a strong sense of pride at the same time.

07

Most creative people are both rebellious and conservative. “It is impossible to be creative without having first internalized an area of culture. So it’s difficult to see how a person can be creative without being both traditional and conservative and at the same time rebellious and iconoclastic.”

08

Most creative people are very passionate about their work, but remain extremely objective about it as well. They are able to admit when something they have made is not very good.

09

Most creative people’s openness and sensitivity exposes them to a large amount of suffering and pain, but joy and life in the midst of that suffering. “Perhaps the most important quality, the one that is most consistently present in all creative individuals, is the ability to enjoy the process of creation for its own sake. Without this trait, poets would give up striving for perfection and would write commercial jingles, economists would work for banks where they would earn at least twice as much as they do at universities, and physicists would stop doing basic research and join industrial laboratories where the conditions are better and the expectations more predictable.”

Most entrepreneurs we spoke to agree to this completely. They share all the nine traits. What do you say?

Six things Entrepreneur should Avoid !!

Entrepreneurship is like creating your own world with your own rules.

A world where you are the King, and your decisions will make or break your world. Not surprisingly though, there are more failures in entrepreneurship than success.

And this clearly shows that not every Entrepreneur is capable of making the right decisions. Heck, even most of the human beings are not able to take the right decisions at the right time.

But that doesn’t mean that decisions should not be taken or the fear of failure should make you hide. Bad decisions are of course bad and should be avoided. But the brave makes the decisions and then makes them right.

In this same endeavor, let’s go through some of the decisions which can make or break a business enterprise.

Entrepreneurship advice | 6 Things an Entrepreneur Should Always Prevent From Happening

If you are the entrepreneur, then these 6 things should be clearly avoided:

1) Lots of Thinking and Very less Action

Don’t be late and miss the train. Lots of new entrepreneurs and startup founders face this dilemma in the early stages. And there are some seasoned entrepreneurs who go through this phase as well: the period where lots of thinking and brain storming is done but nothing concrete comes out. If you have an idea and have a vision of making it big, then just do it.

Solution: This small formulae can help you: Think Big ; Start Small ; Scale Fast.

Yes, you are thinking big and its very appreciable but start small. And focus on scaling fast.

2) Focus on raising VC money

The main focus of the entrepreneur should always be on building a great product; nurturing a great team and finding out what your customers want. Venture capital will follow suit automatically. If you primary focus is to grab the millions which VCs have, then it can prove disastrous for your business.

It is said that the VCs find the best Businesses to invest in and rarely it’s the other way round. 9 out of 10 VC funded companies actually fail!

Solution: Instead of looking for VC money, you should rather be focused on finding the true 1000 fans for your business.

3) Over-promise and Under-deliver

Human psychology tells us that we humans tend to remember negative things more than we remember positive things. And the news channel and newspaper know this fact. This is the reason bad news sells faster than good news. Our brains are wired this way; we can’t help it.

Now, if you are a new entrepreneur and just starting your journey then one thing you will definitely do is over-promise. And once you do that, you have lost an excellent chance to impress your customer or clients.

Over-promising leads to under-delivering most of the times and it creates a bad impression in front of your customers and clients. And this bad impression will remain longer than you expect.

Solution: Under-promise and over-deliver to your customers, which can turn the tables in your favor, instantly. Over-delivering is an art and when rightly used, it can pave your way to success.

4) Scarcity of new ideas:

Today’s information age is all about innovation and ideas. Being an entrepreneur, you should always and always look out for new ideas inside your domain. If you are not able to find the ideas, then hire a person who can.

But at any cost, bring on new ideas! Failure to embrace innovation will result in your company’s downfall. Even Blackberry and Nokia couldn’t stop it.

Solution: Bring in the idea guy into your team. Find a person who has lots of ideas in store, and use it. Don’t discourage anyone from sharing anything. Even a stopped clock shows right time twice a day!

5) Going Solo

An entrepreneur’s mind is like a puzzle, which gets complicated with each passing day. There are plans which are in the pipeline and the operations which should be taken care of right now. There are tax related issues which should be handled with care and there are angry clients wanting your attention.

Admit it, you can’t make it to the top all alone. You need a team which supports you and believes in you. Going solo is the worst decision any entrepreneur can ever make. And here is a small VC tip which comes from straight from a VC: They don’t invest in companies; they invest in teams.

Solution: Find a co-founder as fast as you can. If not a co-founder then atleast find a person who can handle the operations when you are not around. Focus on building the team, and the team will build you.

6) Stop Marketing

When I asked one of my entrepreneur friends about their marketing efforts, he replied me, “Who needs marketing when your products rock?” 6 months down the line, he is begging me to spend money on PPC to bring in business.

PPC is instant marketing, no doubt. You spend dollars and you get instant customers. But the real marketing is when you get customers organically, absolutely free of cost, without spending a penny on PPC.

We call it Content Marketing, which actually rocks.

But more than often, entrepreneurs fail to understand organic marketing practices and lose a big chunk of profits and business. It is said that marketing should be started even before you launch your product.

Solution: First find your customers and then sell your products. Here is an interesting blog by Seth Godin (America’s greatest Marketer) about this question here: Which comes first, the product or the marketing?

Do you want to share any story related with Entrepreneurship? Any decision which you wished that you had made? Or any decision which you shouldn’t have made! Please share your views right here.