cognoise

Where is all the govt startup funding commitments going?

Any founder / wannabe founder nominally reading the news on what is happening in the India technology startup ecosystem will know there is more money to take than ever or at least we have some major commitments.

BJP government always has the style and PR prowess to make a big deal of these announcements of making funding commitments. Only startup founders do not have a clear way to tap into these commitments, but still feel good about it.  There are of course states backing up well. Here is the data first,

  1. INR 2500 crore from Kerala government from its IT Mission ‘for youth entrepreneurship activities’
  1. INR 100 crore from Andra Pradesh government to set up a ‘fund of fund’ without directly investing in startups
  1. Of course there are those central government/bank funding commits like the INR 10000 crore startup fund announced in the budget, and the INR 5000 crore from RBI, INR 100 crore for village startups, some crores for Accelerator / Incubators.

With benefit of doubt to bureaucracy, I will still give another 6 months to get more clarity on

  1. Who is eligible with type of registration, domicile, etc?
  1. How much funding, under what terms? How will government retain rights to deploy, sell, control?
  2. What is the selection criteria and process?
  3. Which department will answer RTI (Right To Information) queries on any application, right now it is split across Agriculture, Youth affairs, Skill Development, DST, Finance and rural development. RBI has already come out with some procedure clarity on disbursal of funds and identified SIDBI + ICICI Banks to lead.
  4. Who all are now considered accelerator, incubators, we already have academia, TBI, STEPs in the mix, with enough foundations, associations, and corporate in the mix?
  5. Which portions of reporting, filing, compliance are relaxed or added just because it is a startup?

Without above, all such startup funding frenzy will only be vacant announcements. I see many parallels between the 1996–2000 IT frenzy and this one, which starts with locals hating IT guys, and later accepting the new reality with much irritation and actually getting their daughters married to them, so there is hope to startup founders ;).

Second, there is media frenzy with money, which I think stems from confusing and comparing personal savings/rich with resource needed to run a growing business. Seeing the next round of $1 B funding in flipkart, means founders are already multi billionaires, and this warped notion / headline means more views into an otherwise dead news.

Third government funding for startups does not mean ecosystem is thriving, especially when I constantly meet startups that are on the brink of collapse/wind down due to debts, talent, inability to achieve product-market fit and attract lead customers.

Wait before you jump to get your DIN and start a private limited getting biased by all this positive news, but keep experimenting with ideas/products that you think will stand on its own without any crutches from the government.

To me RTI app to 3 departments due in 6 months.

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For every

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For every initiative, discipline (action, research etc), normal, or even some cases truth, technology trends above are played with in some form.

E.g.
If I try multi disciplinary, you can counter with anti disciplinary or trans disciplinary.
If I act normal you are free to choose paranormal even during appraisals.

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cognoise

Vinod Khosla fireside chat my notes

Short but well managed event, Ravi Gururaj did a great job in keeping away recent controversies and popular queries, leaving Vinod Khosla be his usual candid spontaneous self.

Vinod took pulse on the audience and their role with technology to begin with.

On entrepreneurship…
After food, shelter and kids education, having everything else as optional for every entrepreneur.
Have a clear goal for the company, and having an obstinate vision but flexible tactics. Vinod noted this being a common mistake across ventures.

Responding to how to find first users he suggested Eric Ries
The Lean Startup: How Constant Innovation Creates Radically Successful Businesses

Even while he did not agree on everything there, like going into the wild and starting experiments.

Talking about failure even while Ravi pressed on most disappointing, dramatic, Vinod really took his time to recall the Tablet experiment back in 1990 that failed with company being technology focused rather than user focused. ‘Point is the the pen’ whereas it should have been mobility or an email machine.
Went on to note how Blackberry 5 years later and subsequently Steve Jobs fixed the right interface.

Being so open about failure and the emotional response to failure and considering hard problems as opportunities and being personally indulgent in those and of course working for 80 hrs a week for 30 years surely will be a record and his achievements show.

He noted Noam Wasserman
The Founder’s Dilemmas – Anticipating and Avoiding the Pitfalls That Can Sink a Startup (The Kauffman Foundation Series on Innovation and Entrepreneurship)

On IOT…
IoT is not even a market yet, and while stating this he took a jibe on consultants who needs to just write our talk and made sure the McKinsey and Bain folks were not in the room as their core role is just promulgate and not really ‘do’ anything.
On the same vein he set aside any bubble predictions esp in financial market.
His point was while in 2000,when bubble burst, internet traffic was and still is only growing.

On impact…
While responding to many questions on impact investments. Noting the world having 500 to 700 million energy rich, while 10 times more people need the same with the same limited resources. Evaluate scale of innovation or size of opportunity before deciding tech or the paths. Also quoted the famous
20% doctor included for the next part as well.

Tech Zen…
The almost Zen level part came late in the session when he noted,
Technology as a belief system, and went on a personal reflection about him not having any other religion.
And in response to the strong AI aka full machine learning + intelligence he made the following statement “I don’t yet know whether to believe or not.”
From his perspective even a belief is a discovery or knowing process rather than blind or without reason.

On my question…
Finally outside I did ask him the question that I couldn’t ask during the session
What’s the litmus test to identify entrepreneur, adviser, investor to bet on?
He said he does not have one but he will check if the entrepreneur was ‘self aware’. And for investors he said it is easy to find and nothing of note on ‘advisers’, obvious I guess.

PS: It was great to see erstwhile MindTree UID team and Derick, Krishnan from Flutura (see pic below)
IMG_20141212_175117

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cognoise

After this old post from Freshdesk on

How to incorporate a US Corporation from outside the USA?

Here is a live experience feed coming from

Redwood Labs on tumblr

One thing is common and long standing, lawyers acting as the intermediary between business and government is edging towards unsustainable costs for startups.

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cognoise

Strategy as a narrative

A version of this post was delivered as a talk last week at a NASSCOM event for a few GIC leaders looking to drive innovation.

Fundamental questions around innovation are

      1. Scouting: What is the idea and how are we getting those ideas? Primarily it is about listening to ideas that are being tabled, presented or being talked about wherever and whenever.
      2. Investing: What is my next action after listening to the idea? Once you hear an idea, if it does not give raise to a “next action” there is very little chance for impact, even if it means just forwarding the email with a note and a presentation. Managers and leaders may choose to ignore an idea right in the inbox or kill it with many of those familiar techniques like death by delay or details. Point is there has to be a set of things that need to happen to the ideas that surface up, and of course lots of ideas surface up, and your capital, time and attention is very limited so you choose to do stuff only with very less number of ideas. When we say to do limited set of things the immediately “is this a process” comes to mind, but really it should be seen as a ritual, that whatever be the idea, your way to act has to kick in. It is generally never the same across 2 departments, I have seen in my company how, Finance is able to go live on ideas with a much lower management support, whereas marketing never goes live without a SVP approval.
      1. Testing:  What the world did about such ideas? Testing ideas at scale is a capability, it is easy for online or mobile; .com experiments are cheaper to run than  most other channels. MVP and lead user feedbacks are most important aspects to find if the idea is worth its salt, and if it can actually create the impact it claims. If the business decides to simply follow quickly rather than lead, testing of high capex technology can actually be delegated to competition that is raring/daring to lead.

Even if you understood how to scout, invest and test ideas, unless you are able to play to the current and historic narratives of the company, it will be very difficult to navigate structures and influence people to create the impact.

Enter strategy as a narrative

  1. If you take corporate and the CFO function, priority is given to investors where the narrative revolves around capex and return on investment, growth and these tend to be driven from the planning function that benchmarks against existing peer/competition. Specifically ROIC and EPS is set on the long range plans that can all be seen with a simple Reuters.com query.
  2. If you take customers as priority, you would account for specific trends for example shifting of shopping online and mobile (both experience and transaction), growth of subscriptions for everyday goods, willingness to pay for same day service, assuming free shipping and returns is affecting our business. Narratives here will be around who the customer is, why certain behavior change will profoundly affect the way of conducting business, how can business continue to provide the same level of experience and service across channels to the customer.
  3. Whereas a business pyramid may be interested in specific outcomes and ways (processes/technologies/partnerships) to achieve those. For example a supply chain or distribution narrative can range across the entire logistics ranging from sourcing countries to last mile delivery convenience to customers or a merchandising narrative cutting across the entire life cycle of the product (like partnership – product placement – price), while a marketing narrative may just focus on branding and advertisement and mode of delivery.

All of the above can be affected profoundly by technology changes, as Brian Arthur (who wrote The Nature of Technology: What It Is and How It Evolves and advises companies like Google), makes a claim that technology changes brings forward need and further another set of technologies, and an easy analogy could be with the invention of automobile leading to all sorts of technologies across, oil refining technologies, road technologies like highway networks, signal systems, systems like satelite mapping, and now we get real time traffic information on mobile etc. In and of itself, where narratives shift rapidly and has to be made sense with any of the stakeholder outcomes above.

Finally I want to talk about how technology investments are shifting to business functions rather than the IT department. This can simply be seen by growth of budgetary provisions in your company technology and other business. For example out marketing department budget will be easily more than 7 times that of IT department budget. And Marketing do spend a large chunk of these investments in technology.

To be part of any narrative or a broad objective involves engagement with HQ and this is usually achieved by getting a seat at the table, and then building your way across to both receive and transmit signals to the General’s ear. Usually General’s hold cheque books and veto powers. I am not claiming in anyway that this is the only way to do it. For example when Jeff Bezos sends a note to country heads on India as a priority for the year and it means there is a support guarantee from apex leadership that can be summoned when needed.

Another way to achieve the same objective is to set standard processes for say estimating effort, quantifying impact, requesting resource etc.

So being open to work and play with a broad set of narratives that keep changing as needs, approaches, technologies change and the speed at which we can do this sitting in a far off location and scaling the way in which we listen and respond, largely will determine the future, including your very existence.

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