Daily Archives: December 23, 2003

Dotcom Lessons

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Business Standard has a story (in The Strategist, by Prerna Raturi) on what some of the former dotcommers in India are currently doing and the lessons they have learnt. It features me, too [need to scroll down to the bottom of the page]. Some of my quotes are paraphrased from my earlier writings on the blog (on Entrepreneurship).

Rajesh Jain, managing director, Netcore Solutions Pvt Ltd, launched Indiaworld.com in 1995, which was acquired by Sify in November 1999 for $115 million. With his focus back to Netcore Solutions, which creates innovations to bridge the digital divide in small- and medium-sized enterprises as well as the rural populace in developing countries, Jain is still working with technology and the Internet space.

I am an entrepreneur to the core and understand the risks involved with anything new. I know that sometimes, things work, sometimes, they dont. If things fail, it is back to the drawing board. I also believe that entrepreneurs (including me) work not with maps, but with compasses you know the direction, but do not have the territory charted out.

Indiaworld was launched with a vision to bridge the gap between Indians worldwide and grew to be one of the largest collection of India-centric websites Samachar (news), newsASIA, Khel (cricket), Khoj (search engine), Man Pasand (favourites), Dhan (personal finance), Bawarchi (food), Itihaas (history) and Indialine (Internet).

The sale to Sify was not because of a financial crunch. It was because we felt that, in order to grow our Indiaworld business, we needed a bigger partner and more funds.

Setting up a business in India is non-trivial. There is little help from VCs or banks. Being small is almost a bane. So, it is very important for a business to be profitable at an early stage. Being acquired is not a long-term strategy (or for that matter, even a short-term one).

The challenge, of course, is to ensure that short-term profit motives are balanced by long-term strategic decisions. In our case, the home pages business generated the short-term revenues, while the investment in a network of websites offered a longer-term opportunity for building up page views so as to target advertisers.

LESSONS LEARNT

  • Entrepreneurs have a vision of how tomorrow can be different and better, something that is not so obvious to others. In doing so, they have to convince non-believers and naysayers. They have to build a team and get customers, battling odds at every stage. Envisioning how tomorrow can be different is the starting point of the dream. For this, look beyond the immediate area of interest to other areas that can impact it.

  • No business is a 100-metre sprint. To win the marathon, entrepreneurs need to first ensure that they can last the distance. Look beyond the near-term. A new business must not be pressured by time at the start. But it also becomes harder to look further ahead. That is the challenge: this ability to build a framework a mental map of the landscape in the future is what can help create the right foundation for the business.

  • While the natural instinct on starting up may be to go and raise capital so you can build a business top down (with money and a strong management team), the best way to build a lasting business is by being profitable as quickly as possible.

  • Running a start-up is a life-and-death business. An entrepreneur is perhaps no more than two or three mistakes away from business death.

    • Internet 100 by 100

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    Even as we struggle for bandwidth in India, researchers in the US are already thinking of how the Internet will scale-up to handle higher speeds. WSJ writes:

    Starting Tuesday, researchers from four big universities and other research outfits gathered on the Carnegie-Mellon campus in Pittsburgh for the initial planning session of the “100 by 100” consortium. With a $7.5 million grant from the National Science Foundation, the group is spending the coming few years thinking about how to improve the Internet so that 100 million U.S. homes can have everyday speeds of 100 megabytes a second.

    Most people think that improving network speeds is a simple matter of installing faster pipes. But Prof. Hui Zhang, the Carnegie Mellon computer-science professor who heads the consortium, says even with so-called fat pipes everywhere, today’s Internet might not “scale up.”

    The professor explains the problem: The routers that serve as the Web’s traffic-control devices are so complex that only a few companies can build them. What’s more, keeping a big network running is getting harder and more expensive — “a black art,” he calls it.

    As far as pipes, Prof. Zhang thinks that because of the 1998-2000 telecom bubble, there are enough fiber-optic lines buried in the U.S. to handle all of the backbone, “long haul” traffic of even the fastest Internet.

    However, connecting up homes — the “final mile” problem — remains tricky and expensive, though new ways of using wireless communications, including reallocating some or all of the radio spectrum, could help.

    Prof. Zhang acknowledges he stands on contested terrain when he says the Internet can’t continue to simply make incremental progress and expect to reach the goals of the 100 by 100 program.

    What’s more, in this evolution vs. revolution debate, the revolutionists have another challenge. Networking companies, which weren’t around when the initial decisions about the Net were made, might oppose any technical changes, no matter how well-deserved, that threaten their market positions.

    Lets set a “100 by 1” goal for India: 100 million Indian homes and business to get 1 Mbps connectivity for less than Rs 1,000 per month.

    Making Better Presentations

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    We need to make presentations all the time. This column (from 1998) by Doc Searls is still very relevant today. Key points:

    – Begin with the end
    – Come from who you are
    – Tell your story
    – Write from an outline
    – Talk from headlines, not headings
    – Use graphics
    – Use numbers to make lists memorable
    – Research thoroughly, source abundantly, give examples
    – Make comparisons
    – Stand and deliver

    Think It Over

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    A few short takes:

    Scoble: “The idea that a search term can then be a syndication feed is going to change the world.”

    RSS Knowledge Streams [John Robb and Dave Winer and Zack Rosen]: “We are making very robost RSS feed content importing and exporting tools into the DeanSpace web community ‘kits’. The idea being that all the different Dean community sites running our code will then have the ability to share and syndicate content and users easily across the network of Dean web-communities. We are attempting to construct a grassroots campaign network from the numerous deployed sites running our code. The goal is to have all content and users on the network wrapped in metadata, so the different sites act as two way filters to the campaign network with communities built around them, rather than as isolated independant communities.”

    The Ideal CMS.

    Dana Blankenhorn: “Once a technology becomes easy enough to use that anyone can use it, its days as a hot market are over…Put another way, in technology complexity breeds growth.”

    eBay of Social Capital

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    Stuart Henshall has some interesting thoughts on how Skype and Vonage, more than Friendster and LinkedIn, will be the drivers:

    Many of the social networking services provide useful functionalities (dating – matching is really separate to my comments here) however none of them provide the type of product / service that is going to be a big time winner. They are high maintenance for the most part and fail to integrate well into the day to day work that we do. Then there is trust too. Upload your outlook address book etc… They are all useful experiments and many of their features will be built into corporate systems. Yet, I believe the majority are barking up the wrong tree.

    Here’s some top of mind reasons why.

    Mobility: These systems are static, don’t integrate well with our cellphones and our SMS or what is to come in this arena. PDA’s with Pocket Presence etc.

    Presence: A few like Tribe provide some indication of presence. However have you ever been there where there are more than one or two people that you know online at the same time? Ecademy provides another method. None of these enable quick voice brokering. Although there is an Ecademy group that has experimented with that. IM already does this.

    Voice: More than half of all knowledge is communicated verbally. These systems aren’t adding in the additional cues. (If you want to see a great piece on this read Tom Coates). Skype uses both presence and Voice Quality to really change the game and the location — integrated with the PC.

    Conferencing Calling: 2004 will see the introduction of effective VoIP voice conferencing at effectively zero cost. This will have significant impact on knowledge sharing, networking. and getting to the right questions quickly.

    Buddy Lists: IM is accelerating. IM is displacing e-mail. IM redefines addresses, personas, and access. Expect to see some RSS in with IM. Buddies want to sell a car… just blog it. All your buddies see it. Buddy broadcast. It’s already done with SMS messaging.

    Blogs: Is TypePad not in the Ryze social networking business? From what I’ve seen everyone there can have a profile / about me section in minutes. Feedster provides another example of networking around content. Just search the blogs for “social software”.

    Search: I think we are going to want to capture the searches that personally network us with people we want to connect with or who are also investigating an area. I’m also surprised that Google doesn’t make it easy to link a search that returns a link to a blog to an IM opportunity. Makes even more sense in large corporate databases. Would that make it a decentralized Ask Jeeves?

    So where does that lead? Right bang on the doorstep of the phone system. It’s where all the money is, and where the above is likely to be most disruptive. Vonage’s new softphone like Skype is just another indicator.

    Vonage’s Softphone

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    Om Malik: “Vonage is developing a ‘softphone’, a piece of software that resides on a PDA (read Pocket PC) or a Laptop and can connect to the internet using a WI-Fi connection.”

    Wi-Fi Networking News: “Om’s scoop is certainly that Vonage is going to package the software and PSTN offering into a no-configuration package that will be as easy to use as their hardware service. Vonage’s hardware solution is pretty simple: open the box, plug it in, wait a minute. You’re done. Voice mail calls can be alerted via email, and other features can be enabled through the Web site’s dashboard for your account. Because Vonage works over broadband, a Pocket PC or a laptop equipped with their soft client in turn connected to a Wi-Fi hotspot or access point means free phone service everywhere — it’s another incentive to lower cell phone plans (for roaming purposes) and increase the number of hot spot locations.”

    Google as All-Purpose Web Information Tool

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    Business Week writes on Google’s ambitions:

    Taken to its logical extension of providing an interface for every popular service or sector on the Web, Google becomes the omnipresent middleman and a clear and present danger to just about any company that relies on the Internet for commerce. Which, increasingly, is every company in the developed world.

    What’s becoming more and more clear, though, is advertising will be the primary revenue driver of the portals and aggregators. What Yahoo terms “marketing services” (read, advertising) accounts for nearly 75% of its most recent quarter’s revenues. Increasingly, advertising is hung around various forms of search. This explains why Microsoft is seeking to build its own Google-killer search engine and why Yahoo is expected to start using its own in-house software for Web searches — and to dump Google.

    Google has decided that its customers should gather information through inputs of text search terms by using more or less the same simple interface to search for news, things to buy, or any other topic. That’s a small but important distinction. Google assumes that customers are smart enough to learn to search with words rather than with the graphical and pull-down menus used by most of its competitors. That’s an understandable bet. Google has gone from upstart to Internet star with a business plan based on that assumption.

    TECH TALK: 2003-04: Digital Life

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    1. Digital Life

    It is only now that the full impact of the digital technologies is becoming apparent in our lives. From broadband, always-on connectivity to the Internet to cellphones that do more than just enable talk to online music stores and gaming worlds to computers serving as media centres in homes to flat screen plasma TVs, our personal and home lives are seeing an ever greater penetration of technology.

    2003 is turning out to be a banner year for PC sales, driven more by home users deciding that theres enough reason to upgrade. Wrote WSJ recently: For the first Christmas since sales started cooling in late 1999, home-PC sales may turn in a strong finish this year, spurred by buyers replacing older machines and the wider acceptance of home-PCs as entertainment-and-imaging devices rather than merely Internet cruisers Unlike in past booms, there is no single feature, such as a new operating system or chip, fueling this year’s sales pickup. Instead, buyers who have been on the sidelines now are eager for a complete update, brightening their new machines with snazzy flat liquid-crystal-display monitors, photo-imaging software, CD-writers, DVD players, and 3-dimensional sound systems. There is a similar story on online ecommerce, as people are buying online in ever increasing numbers. Cellphone sales are expected to touch 500 million this year.

    What has begun in 2003 and will continue in the coming years is the coming together of various digital technologies to make for complete makeover of industries. Napster started a revolution in digital music before it had to shut down. What it proved was the demand for music online. This has manifested itself in the creation of online music stories, with Apples iTunes being the most popular, which now sell singles for under a dollar. This has created a further demand for gadgets like Apples iPod. Gaming, which is seeing increasing competition between Sony and Microsoft, is now coming to mobile phones.

    Perhaps nowhere is the transformation as great as in the cellphones we use. The same innovation we saw in PCs in the 80s and 90s is now coming to the mobile phones as new features make them more than just talking devices. The convergence between cellphones and PDAs is just the start. These smartphones are packing the power and potential of computers. Fortune named the camera phone as the technology of the year.

    In short, digital technologies and gadgets are playing a key role across all aspects of our life. And this is just the start. Even as our work lives have seen little evident change as corporations have clamped down on spending, we find ourselves having plenty of reason as part of our personal lives to spend on the new gadgets that promise a better, more connected and converged life.

    2004: The next year will see a battle royale shaping up for the device to control the digital home. The contenders: PCs, TVs / set-top boxes and gaming consoles. More of the PC companies are pushing into consumer electronics will Dells presence looming especially large. Video is the next frontier for digital delivery. Personal servers accessible by mobile devices over wireless networks will work information and applications available everywhere.

    Tomorrow: Wireless, Security

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