A fascinating documentary about the great Indian mathematician genius who was not even college educated. One of those beautiful mysteries of life.
January 12, 2013
March 25, 2010
India, for all the talk of its technology power, is way behind in internet usage. Internet penetration in India is a mere 3%. It is an order of magnitude less than that of China which has 20% penetration. There are just two web companies that have gone public in the history. Imagine, just 2! Both with miniscule market caps. China boasts several much bigger successes that immediately come to my mind: Baidu, Tom Online, Alibaba, Tencent, Sina, Sohu. It is safe to say India’s internet potential is just that. Unrealized potential.
But there are examples of a few companies that show how the successful web companies inIndia may look like. One of the few successful categories in e-commerce is the online ticketing. One of the most popular e-commerce sites is the one run by Indian Railways, a government organization (go figure that!), that sells train tickets online. I have been a fan a small web company in India called RedBus which is expedia for bus tickets. Many people travel by bus in India and this startup solves a real problem. Sarah Lacy wrote a nice post on this company at Techcrunch.
A few companies have done well and a few more are coming up, slowly but surely. But there are hardly any true breakout hits.
RedBus is pretty close. It’s essentially an Expedia for bus tickets in India. It sells about 3,500 bus seats per day, is the fourth most-trafficked Web site in India and has at least tripled its revenues year-over-year. The company sells seats for roughly half the bus operators in India, and that’s saying something: This is an insanely fragmented market that had next to zero centralization just a few years ago. All of this has been built in three years on about $1 million in venture funding. (The company raised another $1.3 million in 2008, but it’s still in the bank. Investors include Helion, Inventus and Seedfund.)
Background for Americans: There are two kinds of buses in India—those that make stops and have ticket-takers on board and that go to one destination only and sell pre-paid tickets only. There are some 3,000 operators of the latter category and, before RedBus, there was no way to contact them directly. To get a bus ticket, you went to an agent. That agent only had inventory from a few bus lines. To book the ticket, he or she would call one person who was in charge of booking every seat on that particular route. There was a long wait time, and frequently the routes the agents knew about were sold out – meaning you had to change your travel plans, or find another agent who had different sources. Meanwhile there was no standardization on pricing and commissions. The agent simply wrote the cost on a piece of paper and if you wanted to ride, you paid it.
Now, RedBus has a central database that gets seats from half of India’s bus operators. It has done so well that it powers the bus ticket applications for most of India’s more general travel sites like MakeMyTrip.com. It also sells an OpenTable-like software-as-a-service product to help bus companies manage their own inventory and better integrate their inventory with RedBus. In terms of seats, it sells less than 1% of the 750,000 rides taken daily, but with several channels and few other easy options, there’s a ton of room to grow a big company.
Sama didn’t set out to build a company. I know that’s a cliché with startups these days, but it’s a rarity in Bangalore where the glamor of being a Web entrepreneur runs high and plenty of TechCrunch-reading kids save up money, quit for a year, try to start a company, and go back to a multinational if it doesn’t hit quickly. When RedBus’s mentor first suggested the company raise $1 million, Sama gasped. He hadn’t even thought in those amounts. His only immediate thought was: “If I had $1 million, I’d put it in the bank and make interest.”
It is a really an interesting read if you want to get an idea of enterpreneurship in India.
Here is a detailed story on the company which traces its beginnings, their struggles and how they solved those challenges.
Says Phani, “I knew there was a need and thought there was a solution, but I wasn’t sure how to make money out of it.” He continues, “At the time we were selected by TiE, there still were a lot of mixed opinions about what our identity should be. Some people thought we should operate a GDS (Global Distribution System) for bus operators, offering a transaction platform and making money by charging for each online transaction. Others said that if we did that, it would take a long time to recoup our investment because the operators weren’t yet technologically savvy enough for a GDS.”
TiE’s veteran advisors spurred the young engineers to resolve the problem by acting instead of relying too much on hypothetical analyses. Phani recounts, “Our mentors were of the opinion that we could start off if we could just solve the first obvious problem we saw, which was on the consumer side. We could launch a Web site and mimic the whole back end, even if it wasn’t automated at all. The first step was to get traction by adding value where that would be easiest. They told us just to go do that, gain recognition, and stand on our own as a business. Then we could move on to other things and worry about automating our operations. The TiE members really helped us take one option and pursue it relentlessly with more confidence.”
Because the bus operators were not computerized, redBus could not simply tap into their existing systems in order to put seats online. To get around this problem, Phani and his partners adopted an old practice that had long pre-dated computers: block booking. They asked bus operators to reserve some of their inventory until an hour before departure time, just as off-line travel agencies reserve a fraction of a hotel’s rooms in advance. That allowed redBus to offer seats from multiple operators without knowing in real time how full any given bus would be. It also insulated the bus operators from worrying about scaling up IT systems and servers to handle holiday peaks in online traffic.
However, this decision created a classic problem: which came first, the chicken or the egg? Phani and his partners were among the first to ask private operators to allocate seats to them in advance. Once redBus was established as a volume seller of tickets, more operators would be willing to set aside inventory for them. But unless operators could be persuaded to do that, how could the venture build volume?
The only way to overcome this hurdle was through sheer effort and determination. redBus launched its service August 18, 2006 with just one operator on board. Recalls Phani, “I told the operator that we were a group of well-educated entrepreneurs who were experimenting in order to improve the ticketing experience for customers. I said I knew it would work, and asked if he would help us. He said that he would give me one week to show progress or forget it. I knew that during that one week we couldn’t sell tickets on the Internet, since that was too short a time period for a new medium. So I went to bus boarding points in Bangalore, told everyone our story, gave people my card, and said ‘Call me and I’ll get you a seat.’ That’s how we did marketing for the first two months: going to bus stops, giving out cards, and telling people one at a time who we were. Most of the customers pitied us; they figured that a founder was telling them this story, so why not give it a try? A lot of people in the IT sector were able to relate to us.”
March 3, 2010
Fresh off a $12 million investment, SMS GupShup, a Twitter-like service in India that is primarily accessed via SMS, is launching an App Store. The store aims to expand SMS GupShup’s ecosystem by allowing developers to create SMS-based mobile applications based off of the microblogging service.
Launched in April 2007, SMS GupShup (spawned from Webaroo) serves 26 million users across India. The startup has seen rapid growth in users primarily due to the immense popularity of mobile devices in India. According to the startup, there are 550 million mobile phone users in the country and only 50 million web users. With a 10 to 1 mobile-to-PC ratio and SMS serving as the most popular communications platform, the market is ripe for SMS GupShup to take off. SMS GupShup currently processes over 480 million messages a month and accounts for 5 percent of all texts sent within India.
SMSgupshup free group SMS service has grown really popular in India. It is good to see them trying to innovate. The costs associated with sending SMS to shortcode could be an issue with a lot of these apps though. Would you pay 3Rs for each move in tic-tac-toe?
October 23, 2009
Great news for Indian entrepreneurs!
Nagavara Ramarao Narayana Murthy, better known as N. R. Narayana Murthy and one of the seven founders of Infosys Technologies – a giant of a consulting and IT services company based in India with over 100,000 employees and offices around the globe – is turning to “the dark side” after selling a bundle of company shares in order to set up a venture capital firm.
To set up the fund, the man reportedly sold 800,000 shares, or 0.13% of the company, its total value converting to $38.7 million, more or less.
According to many reports of Indian business and technology publications, Murthy aims to invest mainly in ‘brilliant’ Indian entrepreneurs who found startups that operate in the areas of healthcare, education and nutrition. Considering his background as a technology entrepreneur, I imagine some of the investments will be in technology or Internet companies as well, however. Infosys in a statement said overseas investments will also be consider on a “case-to-case basis”.
This is the magic behind silicon valley. Successful entrepreneurs fund and mentor other budding entrepreneurs. India needs more of its successful and well healed entrepreneurs doing this.
October 16, 2009
Ashish Gupta, a noted VC from India and a dear frend, is sharing his insights on Indian startup ecosystem with Sramana Mitra.I highly recommend this interview to anyone that wants to understand the VC scene in India. You can follow the interview on Sramana’s blog.
Dr. Ashish Gupta is a co-founder of Helion and serves on the boards of Gridstone Research, Jivox, Kirusa, MuSigma, Naukri.com, and SMS Gupshup. He has co-founded Tavant Technologies and Junglee. His investments include Daksh (IBM), Odesk, Obongo (AOL), Speedera (Akamai), MakeMyTrip, Merittrac (Manipal Group), and Kaboodle (Hearst). Ashish is a Kauffman Fellow and holds a Ph.D. in computer science from Stanford University and a bachelor’s degree from IIT Kanpur, where he was awarded the President’s Gold medal. He has written several patents, publications, and a book published by MIT Press.
SM: Ashish, to start could you give us a macro picture of what you have seen in the Indian venture market from 2005 to 2009?
AG: There are several things that are working. The number of people who are willing to be entrepreneurs and who have a very mature view of how to build companies as opposed to inexperienced entrepreneurs has increased. The entire ecosystem to support entrepreneurs has improved, although it is nothing like the Valley. That is not even a fair comparison because the Valley has a different value system.
Another interesting piece which is working is consumer demand. It has not only continued to speed up: What we see as a downturn is probably more of a consolidation phase as far as India is concerned. After the consolidation, growth will continue unabated. Clearly, some sectors are not going to be qualified as such. Real estate prices were way out of the ballpark, so that is not consolidation but rather correction. Consumer demand, however, went through a period of consolidation.
SM: Even on the real estate side consumer demand continues?
AG: It has gone back up. Pricing has readjusted, but demand has gone back up. The other thing that has worked reasonably well is the view that investors themselves are taking off that business. I think that all of us have learned a lesson in seeing where deals were overpriced. If you ask me to look back to 2005 until now and say whether the investor group is more mature, more committed, and better equipped, I would say absolutely yes. Was there misbehavior in the middle? Yes. Most of us will get punished for that misbehavior, but net/net is it an evolution in the right direction.
SM: I see two kinds of entrepreneurs working in the Indian ecosystem. One is the kind who goes back and forth between India and the US, and the other is the resident entrepreneur. Can you separate those two groups? Is there as much of an exodus from the Valley back to India as the press makes it out to be?
AG: From the perspective of returnees becoming entrepreneurs, those numbers are not very high. Starting product companies out of India is a mammoth task. I know several who tried to return to India and start a company, and they all returned to the US. A lot of the people who go back to India from the Valley are steeped in a product-building culture. A few who have returned and done well have morphed their companies into hands-and- feet-on-the-street kinds of companies. But there are not enough of those examples for me to tell you that there is a return exodus.
Most of the people who are relocating are returning to mid-level management positions inside of large companies. That, in my knowledge, defines the bulk of people going back. They are expats going back to Cisco, Intel, and IBM. That makes a lot of sense. When you want to go back, you want an institution over your head.
We are also beginning to see a fair number of people who are coming back to work for smaller companies. That is the number that is meaningfully accelerated, particularly over the past year. Is the exodus increasing? Compared to theplast five years? Yes, but for large and mid-tier companies, not to start companies. The romantic notion that hoards of entrepreneurs are returning to start companies is not something that I have seen.
SM: What about the category of entrepreneurs who are working in the Valley but leveraging India in a big way?
AG: You are probably talking to the wrong person in that regard. I have always been a skeptic of startups having engineering outsourced to India. Often what is saved in cost is paid for in time to market. It works with companies that have a founder class there who understands what product is being built without specs and who can complete it with the same intensity as opposed to trying to hiring someone there.
In that context, the number of people who are leveraging India to get stuff done, I think, has marginally gone down. Even the people who were doing it before were often doing it to get extension-type work done.
October 4, 2009
Yahoo buys the front page ad on Times of India, India’s largest english newspaper.
India’s largest English-language newspaper, the Times of India, has an interesting print edition front page today – a huge yellow advertisement for Yahoo’s It’s You campaign first announced last month. You can view the print version here.
The newspaper’s circulation as of 2008 was 3.14 million, making it the largest selling English-language daily newspaper (here’s the whole list). Yahoo already has a large presence in India, reaching 26 million of the 35 million online Indians (according to Comscore, August 2009).
It seems like newpaper ads are pretty popular in India. Google advertises its search in India newspapers. Newspaper ads in India must be good value for money.
September 25, 2009
SMS is huge in countries such as India. Innovation in SMS based solutions is much more advanced in India than in the US. This has to do with the SMS cost structure. In India the SMS costs are much cheaper (even considering the purchase parity) and there is no charge for incoming messages. In US you have to pay for incoming messages, which I beleive is the primary reason businesses don’t use SMS to communicate with customers.
Josh Goldstein writes about the SMS crisis in africa caused by high costs of SMS forced by the greed of carriers.
It would be easy to conclude that Africa is entering the golden age of mobile innovation. In Kenya, mPesa, a Safaricom service, allows users to send money anywhere in the country via mobile phone at very low rates. Next door in Uganda, rural users out of reach of the Internet can use a new SMS-based service from MTN, Grameen Foundation and Google to trade goods, search the Internet and query local reproductive health and agriculture information.
These services, however, represent a trickle of innovation where there should be a downpour. The source of this sluggishness is the structure of African mobile phone networks, which discourage entrepreneurs from quickly and cheaply creating, testing and deploying applications.
Mobile networks are costly in Africa. The price of sending SMS texts is kept high by a combination of high taxes, interconnection fees and network provider choice. And because mobile networks are closed, no one can deploy a new application without the network expressly adding it to a consumer package.
In Uganda, for example, the cost of a user-to-user message is 5 US cents. A premium message (any message not sent from a single user to another) is 10 US cents, despite high levels of competition and low cost. Since it’s rare for a mobile network to grant a discount to a premium service provider, entrepreneurs must attempt to scale in an environment where, according to ResearchICTAfrica, the average Kenyan already spends over 50% of her disposable income on communication. This is not a promising environment for innovation.
This means that many new ideas will never reach the market, not due to engineering challenges, but because of the underlying cost structure of SMS.
There cost of SMS to carriers is almost zero. There is no real reason to charge outrageous rates other than greed and short sightedness. So far the carriers in India have been sensible on this count and I see a lot of innovation which will funnel a lot of money to this ecosystem and therefore to the carriers. But recently some greedy carriers are trying to implement interconnect charges that are threatening to kill the SMS ecosystem in India. If this becomes the industry practice then the carriers can be credited for killing the golden goose of SMS data services. I hope they have enough common sense to realize the gold mine they have in their hands and not bury it with these silly interconnect charges.
September 4, 2009
August 23, 2009
As an Indian immigrant living in Silicon Valley, I see both sides of the coin on the immigration policy debate. Economic recession has hit the US pretty bad. Tech industry has taken its share of the hit too. So I understand that there are many US citizens looking for a job and it is important to find ways for them to get employed again. But making it difficult for qualified, skilled and in many cases US educated immigrants to work in the US is a pretty short sighted policy. US is losing big time on this one. The contributions of these immigrants to US economy and the creation of jobs is overlooked. US loss is other countries’ gain. Sarah Lacy provides a good anaysis of this is issue.
It’s happening: Lou Dobbs’ dream come true and Silicon Valley’s worst nightmare. We’re already seeing the reverse brain drain as smart immigrants take their US educations and experience building companies and creating technology back to their home countries. But now, xenophobia and the lack of any sensible H-1B visa policy is keeping the world’s brightest minds from coming to the U.S. in the first place
U.S. grad school admissions for would-be international students plummeted this year, according to the Council of Graduate Schools—the first decline in five years. The decline was 3% on average, thanks to increases from China and the Middle East, but some countries saw double-digit declines in interest in a U.S. education. Applicants from India and South Korea fell 12% and 9% respectively—with students turning their sights on schools in Asia and Europe instead.
This shouldn’t be a surprise. Much of the world’s economic growth—hence, jobs—is in emerging markets, the schools are far cheaper and in many cases competitive academically, and then there’s the H-1B issue. If America won’t allow a PhD just trained in our top schools to work here and contribute to the economy—why come here and take on the student loans to begin with?
Make no mistake: This is a huge blow for the United States, and particularly Silicon Valley. It’s killing diversity in graduate schools at a time future business leaders most need to understand other countries, especially Asian ones. The reality is one out of every four tech companies is started by an immigrant. In the tech industry, immigrants have created more high paying jobs than they’ve “stolen.”
And nearly every CEO will tell you how much added cost and hassle there is in hiring a foreign-born worker—they do it because they physically can not find enough appropriately skilled workers in the U.S. (Below is an interview I did with LinkedIn’s Reid Hoffman about this very subject a few months ago, and he wrote a guest post on TechCrunch discussing the issue as well.)
Indeed, a recent study by the Bay Area Council, the Campaign for College Opportunity and IHELP showed that we’d need a 90% upswing in people graduating with degrees in science, technology, math or engineering to keep up with all the new jobs being created in that discipline. What created Silicon Valley was a culture of openness and there is no future to Silicon Valley without it.
I recently visited India and the number of experienced NRIs (Non Resident Indians) returning to India from US has exploded. These are people that contributed heavily to US that are now going to help make India a global power. That is a good thing as it is high time Indians that benefitted from Indian education and resources contribute to India. India deserves its place as a global power. These people are not returning as a favor to India though. They see much better opportunities for themselves in India and they get to stay close to their loved ones. Now many Indians graduating from Indian schools are staying back as it simply not worth the trouble of going to the US with all the draconian visa policies. All this is a gain to India and a loss to the US. US is certainly shooting itself in the foot in terms of its own interests. Indian should thank the US administration and Lou Dobbs.