Why no Google in India - Part 2

This is the second of my blogs on the reasons why there is no Google in India and what can be done about it. [Orginally published on http://right-agenda.blogspot.in/]


The common beliefs and the truth about start-ups

Various reasons have been attributed to the start-ups culture in Silicon valley and else where. Like the proximity to investors, tax breaks, legal incentives, incubators, availability of workforce etc. [http://www.entrepreneurial-insights.com/startup-hubs-around-world-silicon-valley/]

But these are the accelerators and elements of a platforms for scaling up, rather than the necessary condition for the birth & success of a start-up. By themselves, they are not the sufficient ingredients to create a start-up culture.

According to Steve Blank, consulting associate professor at Stanford University and a lecturer at National Science Foundation and principal investigator at the University of California at Berkeley and Columbia University, growth in the number of start-ups is constrained by five factors :

1. The high cost of getting the first customer and the even higher cost of getting the product wrong.

2. Long technology development cycles.

3. The limited number of people with an appetite for the risks inherent in founding or working at a start-up.

4. The structure of the venture capital industry, in which a small number of firms each need to invest big sums in a handful of start-ups to have a chance at significant returns.

5. The concentration of real expertise in how to build start-ups.

All these factors are however altered favourably with the presence of a customer(s).

Nearly 48.8 million small businesses exist in India, most of them aren't funded, nor recipients of special government concessions or nurtured in incubators. The thing that gave birth to them and sustains them is - the presence of a customer(s).

All the means of production begin to fall in place with the appearance of a customer(s).

India with its large and diverse consumer market provides the fertile ground for much of these enterprises to exist.[http://articles.economictimes.indiatimes.com/2013-06-
09/news/39834857_1_smes-workforce-small-and-medium-enterprises]

Take a look at the eco-system of the Auto & Engineering industry in a place like Pune. Nearly none of them have been supported by VCs, most have survived and thrived despite adverse government regulations, infrastructure deficiencies, lack of expertise, and at best mediocre cities for their people to live in. The presence of customers (large auto manufacturers) has been largely responsible for a strong manufacturing start-up culture in the city.

A mid sized customer of ours, a supplier to Tata Motors, has over a hundred smaller suppliers supplying to them in turn.

There are a lot of small companies, toughened by years of living with constrains, that could grow out very rapidly under a more congenial environment. With the right environment (policies & infrastructure), many of whom could be part of the international supply chain and become world class players.

ACMA says the industry is driving towards a goal of crossing the US$ 100 billion mark including exports of US$ 30-40 billion by the year 2020.
[http://www.autocarpro.in/analysis-reports/upbeat-indian-component-industry-targets-growth-fy16-8743#sthash.swMu1QO5.dpuf]

India is probably the most competitive country in the world for the automotive industry. It does not cover 100 per cent of technology or components required to make a car but it is giving a good 97 per cent - Vicent Cobee, Corporate Vice-President, Nissan Motor’s Datsun.

What is Constraining the Software Product business in India

In comparison, the Software industry has not suffered from such constraining regulations, neither is the infrastructure requirement as demanding. It has done quite well in exporting software services, but not so with software product exports. Nearly all of the hardware (and software) used in India is imported. These imports, classified collectively under electronic goods, threaten to overtake the Oil import bill by 2020
[http://www.livemint.com/Industry/j6PvasGzddHr29lPDe63eL/Your-fascination-for-smartphones-is-driving-Indias-trade-de.html]

The reason could be the lack of an eco-system as robust as that of the Auto and Engineering sector.

Perhaps due to lack of cost constrains, maybe to ensure proximity with their customers, maybe to move rapidly, maybe to ensure compliance, the software service industry chose to mostly use pre-built and standard software (and hardware) made elsewhere (with a few exceptions).

So it was with other Indian businesses. To survive and grow, post industrial liberalisation, Indian businesses accelerated their use of the IT to build more efficient businesses, enable growth and enter new lines of business. Something that they had not given much heed to hitherto. The emphasis was mostly on speedy implementation and risk mitigation. CIOs mostly got busy with purchase, implementation and management of 'proven' IT systems. Most of government institutions and government owned businesses too followed a similar path.

The result is a large IT reseller and service segment but not may local makers of software & IT products.

Starting up a robust local Eco-System

As a company we've been fortunate in having gained support of some bold CIOs and CXOs who have supported us as customers for our product. The customers, especially those that supported us in the early years, were undertaking risks quite unusual of CIOs in India. The presence of customers, not just helped us financially, but it also gave us the context to create the product, helped us find systems integration & solution partners to enhance our offering. Helping us move towards a world class product.

Maybe it's time CIOs (and more so CXOs), put some time and resource aside to engage with and invest with local start-ups as a means to build new advantages for themselves. They stand to benefit from cost savings, unlocking new efficiencies, creating unique advantages for their businesses.

CIOs/CXOs could start with the periphery, with processes and parts of the business still not digital, with experiments on new business models, with start-ups that have demonstratable capabilities, as low cost experiments. The pay-off could be huge. The cost of failure not much. And the learning of great value a certainty for all.

They won't be a day too early in initiating it. Start-ups like Flipkart, Snapdeal, Ola, Quickr are already creating new systems of business that offers a platform for rapid scale and profits, by a more innovative use of technology. Running factories and business operations efficiently, having large production capacities, or ability to manage scale, might not be enough to survive in the new business environment where business rules are being rewritten at a rapid pace.

Such investment hold promise not only for the customer and the supplier (start-up), but also to the industry (through the creation of a robust eco-system) and country as a whole (through business & economic growth).

Who knows, it may just seed a Google here in India.

What do you say?

Putting your heart into it

People are uncomfortable when they encounter emotions from others because they associate an emotional response with having to give in, give up or give into something in dealing with that emotional response. They feel manipulated through these emotions. People try to cover-up and can their own emotions so as to stay away from inviting an emotional response which could place an unpleasant demand on them.

When we talk of acting out of love and of putting our heart into our work, we are not talking about this kind of emotional manipulation.

Acting out of love (and from your heart) is acting out of a deeper understanding. It is not to be confused with responding emotionally (especially with uncontrolled emotions) or using emotions as a means to manipulate. It comes from the understanding that giving in to emotions makes one unsteady, unpredictable and a slave to rising and falling emotions. It comes from the understanding that a caluculating mind become dry, dull, colorless, hard, ruthless. It is good at taking and grabbing things from others but it is incapable of creating. That it is incapable of giving. It comes from the understanding that these two are but our sensors and tools that help us live and work better.

Emotions are at best used as sensors (guides) and as a means to expression. Can you even think of poetry and music and art bereft of emotions? Can you even imagine anything beautiful ever being created or done without the doer having his or her heart into it?

How you really feel about work is an important indicator of how you are doing at work and the quality of work you are doing.

Are you feeling unhappy? Are you feeling frustrated? Are you are feeling happy? Are you are feeling exhilaration? If you are unhappy it's more likely that you are unable to do your work well. If you feel frustrated it is likely that the problems you encounter in your work keeps reappearing. If you are feeling happy probably you've been able to do a job well. If you are feeling exhilarated you've probably made a breakthrough at work.

Indeed reflecting on how you are feeling about your work can help you manage yourself better.

Acting out of love comes from an understanding that we are can hardly stand alone. That we are dependent on others for our well being. That we have much to be grateful to others for. And that in response, we must at least attempt to do our bit to pay it back and forward.

Here is how the great Einstien saw it -
A hundred times everyday I remind myself that my inner and outer life depend on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received. - Albert Einstien

Indian companies need lower cost IT

The per capita GDP of USA is 47,284 USD. That of India is 3500 USD or about 1/14th of of USA. Obviously, it has a bearing on what our companies earn per employees. E.g. the per employee earning for Citibank and the BPO in India that works for it are vastly different. It therefore stands reason that the BPO cannot afford to invest as much in its infrastructure as the American bank. These companies must therefore be looking for IT infrastructure that are far less expensive.

To start with, software now forms a larger and larger part of the IT budget and it can therefore also be the part that offers the greatest amount of cost savings. Open source software is increasing becoming a very credible alternative.

Secondly, not just the BPO, but most companies in India usually have to go through a large number of small value transactions. While, this means that there can be little compromise on provisioning for capacity, the hardware used to build the IT infrastructure can be less specialised and more generic and therefore lower in cost.

How to destress

First of all learn to forgive yourself. Sometimes, we are too hard on ourselves.

While life and living is about exerting yourself to bring out your best. Sometimes we are in too much of a hurry. Sometimes we define excellence and success and happiness too narrowly. Sometimes we lose sight of that which is special in us. In the process, subjecting ourselves to undertake things that we may not like the most or be the best at. Or do things that is out of tune with our rhythm and pace in life.

Forgive yourself, because even the most talented people fail. Even the most talented people have to try repeatedly. Even the most talented of people have to go through the grind.

Forgive yourself. Because you are more than your mistakes. You are more than your limitations. You are more than your failures. You are more than anything that can be said about you.

Forgive yourself and be happy. Forgive yourself and look forward to the possibilities that lie ahead. The past is dead and gone.

The capitalist need the entrepreneur more

Despite all the raving and ranting by the capitalists, the truth is that it's the capitalist that needs the entrepreneur more.
Without an entrepreneur (which of course the capitalist can himself be) the capitalist cannot hope to grow his wealth.
There are an estimated 42 million entrepreneurs in India. Most of them survive (and grow) without help from the capitalists.
Many a young entrepreneurs get hooked on to the idea of raising capital, when a little modification a little scaling down of the plan can get them started without it.

It may come as a surprise to some to know that it was the entrepreneur who showed up first on earth.

Unifying Ideas

Everyday there is an endless assault of information, customer demands, breakdowns, absenteeism, insights, errors, exceptions, vendor meetings... that can easily drown us in activities and drain us of our energies. Worse still we risk losing our way and ending up nowhere.

What we need are unifying concepts, ideas and models that help us see all this in a unified way. We need to look for the 'one thing' that can explain many things or the 'one thing' we need to hold on to that helps us grip many things at once. Or we need to look for how can it all be arranged using a simple model.
Or better still what is a simple operating model that we can use to organize our response to these. Arriving at such a perspective is probably the starting point to being able to manage things better.

Most important resource wasted

People are one of the biggest cost for most business. People are the most important resource in a business. But people resource is also where the most waste occurs.

Some notes on our People Philosophy

Here are some notes on our people philosophy that came-up in my recent conversations at work.

Firstly, No we are not really worried about people leaving. The negative impact of people leaving is exaggerated. It is mostly that we cannot take the rejection.

Mostly, it does not make a difference as to who comes or goes, our experience has been that it has never been that coming-in of someone or going-out of someone has had any transformational impact. In the end there is a lot of grind that even the most talented people have to go through to produce worthwhile results.

Mostly the importance of a person is exaggerated by us and more so by the person himself or herself. Mostly it's illusion.

But some people make more of a difference than others. You can see them as the Steve Jobbs, or Nandan Nilekani, or Ray Ozzie, or Warren Buffet for the company. They are hard to replace. Hard to replace by either other people, process or technology.

Incidentally these are people who work for the love of it.

We don't have to worry about retaining or driving people. Some people are better gone. Some people contribute more when they stay out of the office than when they are at work. We are not interested in monitoring the hours people clock in.

We don't mean to disrespect people. We don't mean to undervalue people. Neither do we intend to waste our time driving reluctant employees. We intend to understand how things work and who makes what difference. very very clearly. We intend to know what is best about a person and how we can bring that to the fore.

We have more to gain from improving our Knowledge, Brand, Production System, Ecosystem, Culture etc. than we have from adding or subtracting people.

Lastly when we work with people, we have to understand that we are working with lives, that we are working with manifestations of the divine. So we need to act with respect and discretion.

Quality & Meditation

Quality and meditation are one and the same thing. Qualtiy brings about meditation. Only those in mediation can bring about a quality outcome.
One of the ways to know a person in mediation, is the lack of hurry in him or her.
Big dramatic initiatives lack balance.

Karma Yog

One of the greatest lessons I have learnt in my life is to pay as much attention to the means of work as to its end. ..and it appears to me that all the secret of success is there; to pay as much attention to the means as to the end...With the means all right, the end must come.

-Swami Vivekanand


The more we work on our methods and systems the more likely we are to achieve our objectives and ideals, whether they are to provide opportunities to deserving young people, supporting entrepreneurs, contributing to the society, contributing to our own growth and that of our people, creating the capacity to build world class products, building a place of great learning and innovation or spreading prosperity around us.

I think this is the single most important thing of all that we do at work.

The CEO in a corner

The CEO must lead change. The CEO must lead the charge. The CEO must articulate the vision. The CEO must be the company's face to the world outside. The CEO must be available to his people. The CEO must know the numbers. Quality is number one job of the CEO. The CEO must go see for himself. The CEO must build future leaders. The CEO has to define the future for the company. The E in the CEO stands for execution. The CEO is the CMO (Chief Marketing officer)...

Management literature abound with such advice. But, even an idiot can tell you that taking all this advice seriously and together would be a sure recipe for failure. At best the CEO following such advice ends up inflating his sense of self worth to absurd levels. Making for some good entertainment for the rest of the team. At the worst, he ends up turning people around him into Pygmies. Making failure certain.

The CEO has to do what he has to do and leave the rest to others. Sometimes, this may mean confining oneself to a corner so that work can get done.

Sometime for the love of it

Simplifying a business is the correct objective. It can make for faster growth, lower costs and greater peace of mind. But some businesses are complex. Tech businesses e.g. by their very nature are complex.
Likewise, establishing a business on enduring foundation is correct (it can simplify a lot of things). But there are rapid changes a tech business has to deal with.

The world cannot survive only on chewing gums and coke. Some not-so-simple things have to be done. Some not-so-profitable businesses have to be run. For the love of it, for the value it brings to society. And it has to be done in a business format, in a profitable way, so that it does not depend on charity (money from people who sell chewing gums at good margins) for survival.

A thousand things...but one at a time

You need to get a hundred (maybe a thousand things right) to build a great enterprise. I realised this quite early in my life as an entrepreneur. Maybe in a few quick years if not months. But it took me many many years to realise that you can do it only one at a time.

Sooner or later Microsoft will have to choose

Microsoft has much on its hands to catch-up with google, apple, sony et. al. That's mostly on the consumer side. Which also is the most profit making part of its the business (at least that's so for its Windows and Office products). It might therefore chose to relinquish this space and fight IBM, Oracle, SAP etc. in the business software space or do it the other way around. It will be interesting to see. Or else it risks becoming a producer of not-so-great products.

The biggest opportunity today

Qualified and Quality Human Resource is the biggest void today in the Indian economy. And therefore Human Resource Development (Education) offers the biggest opportunity to entrepreneurs for both the reasons of making a contribution and creating wealth.

Most business are created & sustained without VC funding

VC funding is a mirage. Don't waste your time. There are 45 million businesses in India less then a few hundred may be get VC funded.

People leave even big brands for a little more money don't count on people's loyalty. Count on your vision and your own commitment to it. Find people to subscribe to your vision.

Sometimes we are so excited by our ideas that we can't stop ourselves from pursuing it. That is what entrepreneurship is about. However take one idea at a time. Pick-up the best one.

Classify your product into the cash cow, the drain and the star. Be the Vishnu (preserver) of the cash cow. Be the Shiva (destroyer) of the drain and Bramha(creator) for the star.

For a small company it is best if you are focused (single product company). Meditate to sort out the confusion.

Learn to do more with the cash flow. Figure out ways to cut costs. Maybe you can reduce your staff and outsource the intermittent work. It can save you a lot of money.

Build a franchise of loyal customers and partners(resellers). These are your VCs.

VC ecosystem in India is under developed.

VCs in India are more likely to invest in mature companies (with revenues of ($5 million or more) than early stage companies.

Individual Genius

"There is a time in every man's education when he arrives at the conviction that envy is ignorance; that imitation is suicide; that he must take himself for better, for worse, as his portion; that though the wide universe is full of good, no kernel of nourishing corn can come to him but through his toil bestowed on that plot of ground which is given to him to till.

A man is relieved and gay when he has put his heart into his work and done his best;

But what he has said or done otherwise, shall give him no peace. It is a deliverance which does not deliver. In the attempt his genius deserts him; no muse befriends; no invention, no hope.

The power which resides in him is new in nature, and none but he knows what that is which he can do, nor does he know until he has tried.

- Ralph Waldo Emerson

So many opportunities

India has so much diversity, so much disparity, so many problems, so many people...so it offers many many opportunities for entrepreneurs who can fill the gaps, create the variations, use resources more efficiently...

Managing yourself by emotions

I walk into the room where Sujata has been busy all day fielding customer complaints almost all by herself. She looks up at me and smiles. It's not a forced smile.

Surprisingly she seems to be at ease. She's alone today in the services room which usually has about five people taking customer calls and working out remedies to customer complaints. I say - "You are handling it all by yourself ?" She looks up briefly smiles and says "Yes sir" getting back to what she was doing.

So? You are supposed to be cheerful at work, right?

Wrong.

How you really feel about work is an important indicator of how you are managing yourself at work and the quality of work you are doing.

Indeed how you are feeling about your work can help you manage your self better.

Are you feeling unhappy? Are you feeling frustrated? Are you are feeling happy? Are you are feeling exhilaration?

If you are unhappy it's more likely that you are unable to do your work well.

If you feel frustrated it is likely that the problems you encounter in your work keeps reappearing.

If you are feeling happy probably you've been able to do a job well.

If you are feeling exhilarated you've probably made a breakthrough at work.

Working daily on how to do your work better is perhaps the best way to encounter exhilaration more often and make happiness your normal state at work.

Weekend movies, exotic holidays or frequent job changes can hardly substitute for enjoying what you do for most part of your waking life.

Demystifying what the Master said about wealth creation

The Master said…

'Giving is the essence of wealth creation…..'

You gain wealth from creating Value for others, Lending out your assets, or through the Goodwill you have earned as a result of having contributed positively to people's lives or to the society. Essentially through giving.

Of course there are other ways of making money like benefiting from other peoples follies and stealing and taking advantage of other peoples miseries but those fall in the realm of immoral and unethical (the demonic ways). I presume we don’t want to concern ourselves with these.

'Worry about where the money is going rather than where it is going to come from….'

Warren Buffet one of the richest man in the world says that his most important task is 'capital allocation'. Where he has put (given) the money has made all the difference in converting a approx 100,000$ borrowed from friends and family into billions (incidentally he has pledged nearly all his wealth estimated at over 40billion $ to charity).

'Widen your sources of income instead of worrying about your expense…..'

In his book Managing for Results, Peter Drucker says- "..There is a need to concentrate scares resource on the greatest opportunities and results...". Reducing expenses contributes to wealth creation to the extent that expenses are reduced to make resources available for the most attractive possibilities (or opportunities for wealth creation).

'Where the money goes is important…..'

Money must act as a seed to grow wealth. Frivolous expense is like seeds falling on sterile ground. That does not build value or assets or good will. And therefore terminates the process of wealth creation.

And the Master said....

'If you want more money to flow to you, broaden the flow of money from you….'

The more the money flows out from you the more goodwill, value and assets that you create, which in turn becomes the source of wealth creation for you.

So you thought your fixed deposit was about saving? Not quiet. Essentially you are giving the money out to someone else (the bank) who gives it out to someone else (the borrower) and that's how the money grows. Not by keeping it with you but by giving it out. Incidentally the longer you give out your money the more it grows. It might even be that the more often you give it out the more it makes for you. Ask any money lender.

Then he said...

'Live in with the feeling of abundance…..'

Because all the riches in the world will not take the poverty out of a man who thinks he needs some more. That's exactly what a beggar thinks of all day.