Brij Singh's Random Musings

Would you invest in them?

Murthy and Gates in their prime years

"Would you have invested in these companies on the basis of these pictures?"

This picture is sure a big motivation to all the entrepreneurs out there. Start humble and shoot for the long run. Definitely they look like long distance runners.

India 2020: Emerging or Surging?

HBS joined other mainstream media in doing an exclusive coverage on India. Its a very interesting analysis, mostly comments from HBS alums.

Excerpts -

"Out of a world population of six billion people, the one billion who make over $2,000 a year are the primary recipients of technology's benefits. Why not build businesses that serve those at the bottom of the pyramid?" - Vikram Gandhi

"If you're starting a technology company of some size and don't have an India strategy, you're not likely to survive long" - Ramanan Raghavendran

"Investors will begin to use the labor pool available in India to create real value arbitrage—to tap markets they couldn't have tapped before" - Navin Chaddha

"I think the next big opportunity is to find the new sectors where you can take an Indian business global" - Ashish Dhawan

Minto Bhandari said it best - "It's about enlarging the pie, not just slicing up what's already there"

Its good to see Atanu and his team solving the problem for "bottom of the pyramid".

Mission driven funds

Continuing my search for finding good venture funds/start-up models built around social enterpreunership -

SJF Venture -

SJF Ventures invests in companies whose successful growth is built on high performing entry-level employees and strong environmental performance. SJF seeks to serve individuals who, due to their family history, education, race, gender, or geography, have not had the chance to participate fully in the U.S. economy. Specifically, this includes individuals without significant formal education, transitioning from welfare to work, underemployed or unemployed, and/or living in economically distressed urban or rural regions. SJF aims to help create employment situations with room for advancement into positions requiring higher skills and providing greater levels of compensation and benefits

Falls under the category of mission driven funds - private equity funds with a social or environmental agenda, as well as a financial focus, they look for companies with double bottom line - financial return and social return.

Creativity in social entrepreneurship

Lately I have been identifying sites and projects where the promoters have used lot of creativity (not just the vision) to push the boundaries of social entrepreneurship. Few days ago I posted about Acumen Fund-

Acumen Fund is a not-for-profit enterprise focused on improving the lives of the poor around the world. We operate like a venture capital firm - investing philanthropic resources in innovative social entrepreneurs through three thematic portfolios (health care technologies, Muslim World, Water innovations) - with a goal of social change rather than financial return

Today I came across Gapminder

Gapminder is a non-profit venture for development and provision of free software that visualize human development

You should checkout the global health trend and how the global and regional variations convey their numbers via powerful visuals.

More on the Overhang issue

Jim Breyer on the "overhang" problem -

His group predicts that between 2004 and 2006 the industry will see a 20 percent annual decline both in the number of VCs and venture firms. That would mean that within three years the VC census would return to roughly where it was in 1997. "We're going to see a lot of firms unable to raise a next fund, track record really does matter in this business."

Article gives all the reasons why there is so much money out there (though lot of that is un-invested ) - along with their traditional LP base which is university endowments and large pension funds, third large base of wealthy individuals, also joined this party right around the boom time in good number. Along with the overall increase in percentage allotted to private equity investments by large pension fund managers.

As Bill Tai warned couple of days back that something doesn't add up here. There are lot of deadwood startups out there in their series-D/E stage. There is going to be a correction down the road. Its quite ironic to see how lot of companies with struggling business plans are extending their lifeline by outsourcing most of their operations to India and China.

Law of conservation of modularity

[Via Windley's blog] Clayton Christensen emphasizes some of the principles which he elaborated in Innovator's Dilemma

Key questions which every startup should answer

How do we beat the competition? Which customers should we target? What products will our customer want to buy? How should we distribute to and communicate with our customers? Which things should our company do and what can our suppliers do? How can we avoid commoditization? Who should be on our management team? What is the best organizational structure? How can we know when to change course? Whose investment capital will help and whose might hurt?

Also talks about "Law of conservation of modularity" - important idea where either the integrated system or the subsystems need to be modular and comfortable in order to optimize performance for the other. Main takeway - "You make money at the borders to the modular(inefficient) layers"

It would be worthwhile to analyze emerging modular layers in the specific context of IT infrastructure management.

Role of vision in entrepreneurship

Excellent essay on why companies need vision - both effective company vision and elevator-pitch oriented articulate vision.

Innovation improvement

From Strategy+Business and Booz Allen's research -

"..Superior innovation improvement is built on three platforms

Product strategy: Consistently making the right bets on defining new products.
Product architecture: Leveraging product platforms and establishing technology leadership.
Product development: Bringing more new products to the market — at target costs — with speed and efficiency. "

Google's secret

Google's secret to success (again) as reported in Fast Company -

Google's philosophy:

- The User Is in Charge

- The World Is Your R&D Lab

- Failures Are Good. Good Failures Are Better

- Great People Can Manage Themselves

- If Users Come, So Will the Money

More secrets from the article -

"Google understands that its two most important assets are the attention and trust of its users

Google also understands the capacity of the Web to leverage expertise

..most striking about Google is its internal consistency

For the first 18 months of its existence, Google didn't make a penny from its basic Web-search service.

One big factor is the company's willingness to fail "

Good compilation of tips

Ross Mayfield has some tips for budding entreps.

Change your major
Start a business
Connect with the Net
Take responsibility beyond your years
Go abroad
Experiment at the margin
Have fun with failure
Pay yourself
Service the desire
Do different
Work with good people
Stick to ethics
Be a businessperson
Start a weblog

He pretty much summed up most of the attributes. If I were to add to this list -

Have your own theories. It important to have your own theories to hang onto and to develop passion and energy around it. Nothing wrong in failing or seeing your theory fall flat in the final market analysis, but its good to have your own stake in the ground.

Awareness of the everyday business context. A day in a business involves multiple context switching. Knowing what you are running into and developing mental "filing cabinets" is key to aligning all the pieces for the end state.

Its your business not your usual job. Learn to wear as many hats as required to make that gig work.