I am here at IITM, Chennai to help out NextDrop in some technology discussions, and have been blown away by the kinds of companies incubated at the Rural Technology Business Incubation facility (RTBI).

For example, consider Stellapps which is developing an automated cow milking system!

To get a taste of what I’m talking about, definitely watch this talk at Google by Prof. Ashok Jhunjhunwala (the good stuff starts at 17 min 13 sec):

Today is my last day at Infibeam.

I’m going to miss working in this environment because I learned a lot about ecommerce and online buying in India. For example, I was surprised to know how much sales go up during Diwali (in hindsight, not so surprising, of course) and was surprised at the amount of online buying that happens from Tier II cities. Then there was the learning on the huge amount of logistics that happens – the part where the customer visits the website and clicks on the Buy button is just 1% of the total stuff that happens behind-the-scenes.

I am also thankful to Ajay and Infibeam for getting me into the Rails wagon, I’m finally starting to see the light. Learning a new language and framework from scratch to delivering a full ecommerce platform in 4–5 months was a fascinating experience. And soon, anyone can set up their own online store on top of Infibeam’s infrastructure.

Infibeam has done many things right, has many things to improve, and rumors say they may face many challenges in the future. All in all, that’s a good thing. Infibeam launched at the right time and is helping to grow ecommerce in India, and it will continue to do so.

But alas, it’s time for me to move on. I can haz plans.

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Listening to Stand Up by The Prodigy

A common question I get from non-techies is “Is ecommerce for real? Do people really buy online?”

My line of argument is that the future is digital, and hence buying online is a natural consequence of that.

However, just saying that was not convincing enough. So I gathered some statistics as proof and to wow them:

• Apple iTunes is the largest music retailer in USA and has sold more than 10 billion legal songs as of Feb 2010
• Amazon is one of the largest book selling websites in the world and it now sells 105 ebooks for every 100 printed books it sells
• Netflix is a movie streaming company and accounts for 25% of North American Internet traffic
• Facebook is actually the largest photo sharing website in the world where the average user creates 90 pieces of content each month and 100 million photos uploaded per day / 6 billion photos uploaded each month

Closer to home:

• 55 million hits in 48 hours for Zindagi Milegi Na Dobara via mobile phones, facebook and youtube only, the killer part is that no TV ads were done as a deliberate marketing strategy
• Gujarat just voted via the Internet
• 20 million people watched IPL online
• Despite the super high costs, India has 9 million 3G users already
• Update: Less than 1% of India’s population uses 3G service. 0% used 3G a year ago and 30% will use it 4 years from now → 400 million new smartphones.
• Update 2: According to a McKinsey report titled ‘Internet matters: The Net’s sweeping impact on growth, jobs, and prosperity’, released at the e-G8 Forum held in Paris on May 24-25, 2011, internet contributed 5 per cent to the total gross domestic product (GDP) growth of India in the past five years compared with the average 3 per cent for BRIC (Brazil, Russia, India and China) economies. According to the report, companies are able to keep costs down, target customers better and bring goods and services to markets around the world much more easily. — AlooTechie

Then there always is the trump card of how ubiquitous online ticketing has become…

As you can see, digital is happening in India and with RBI reporting that 35% of transactions (and 88% of the total amount) were electronic and Cash on Delivery slowly happening, how far will ecommerce be behind?

How would you convince someone that the future is digital and that ecommerce will be big in India?

The last article on difficulty of hiring for startups in India generated a lot of discussion (also see the HackerStreet.India discussion about this article). I was surprised to see so much response within 24 hours. I guess it shows how much of a pain point it actually is:

Ramjee says: “Bang on, This problem is very severe.”

Gowri says: “oh you could not have hit the nail on the head better!! We are a small, serious high technology company and find it really hard to get good people. First many don’t want to talk to no-brand-name companies. Even when we get to make offers, we end up losing so many because TCS or Wipro or IBM or Accenture gave them 20k more for a maintenance project where they will end up modifying 50 lines of code every 3 months. I feel like crying for them!”

Abhaya says: “Next time we meet, remind me to buy you a drink. I sometimes wish all the people in Startup ecosystem will stop exhorting people to start their own companies and instead join one of the several hundred around as a first step!”

Abdul Qabiz says: “We have been working hard, for last two years, to build a small team, with not much success. Also, hiring is relatively harder for startups in third-tier cities because good ones move to metros.”

These comments are actually the best part of writing a blog – getting to hear from other people knowledgeable on the subject and who are actually in the trenches. The various thoughts added by the community was so good that I thought it was best to summarize it in a new post for my own cognition:

Startups are not promising, yet

We all agree that hiring is an issue. But why is it so? I think the best articulation on the subject was by Manu J (summarized here, please read the original comment for his full thoughts):

1. Stock options have made money for people in Silicon Valley startups. What about in India? “How many makemytrip employees made it big? How many rediff employees?”

2. “Startups do nothing to differentiate themselves from the big corps. If you are offering just a market salary why would a good engineer work with you rather than a big corp which offers that and more?”

3. “Uninspiring work. Not to knock on any startups but some time back facebook clones were all the rage. Now it is groupon clones.”

4. “Lack of technical leadership: Lot of US startups and techies actively participate in the tech community. They usually have a tech blog where they write about scaling challenges, best practices, new products tested out etc. I have learned a lot from these type of posts. I have never found an indian startup which has a good tech blog. (Couple of indian startups do have people in them who are well known and contributed back for ex: you ) but as a company I’ve never seen an indian startup which contributes back to the tech community”

Regarding Point No. 2, Syamant adds:

“Perhaps you should consider non traditional working models as well as talent from outside bangalore who could work remotely. Also consider people who are experienced and have opted to not work fixed hours.”

And Anirudh adds:

“If someone’s good at what they do, they are most likely selling their skills to the highest bidder – namely google, microsoft, amazon, etc. The ones who are trying to work independently (like me) do it because of many reasons – one of them is that you get utmost power, control and authority. Working for a small startup offers neither.”

Regarding Point No. 4, Harish Mallipeddi adds:

“Great technical work & leadership – do not build yet another PHP/MySQL site. Is at least one of the founders, technically well accomplished and smart? If you built Google News and you quit Google to work on your next big idea, then I’m sure that would instill a lot of confidence about you in the minds of potential hires. But if you are completely unaccomplished yourself, then it’s going to be a hard sell”

As far as I know, Manu hits the nail here on the real problems – startups need to do a way better job of making the job look attractive on the strengths of a startup (technical leadership, technical growth, long-term pay-offs, flexibility of timings) rather than trying to compete with big companies on the strengths of big companies (salary, facilities, etc.)

Even things like liberal work-from-home options or double the number of leaves of a regular job can make startups more attractive, like Harish Mallipeddi said:

“Different work space/work culture – you could try renting some cheap office space near a beach in Goa. I’ve worked for Yahoo and I’ve seen Google’s offices – they all have swanky office spaces with free cafeterias. You cannot compete with them by renting out a third-grade office space in crowded Bangalore. Try something different. If you look at all the Valley startups, they don’t just sell you a job – they sell you a work lifestyle – ‘come work for us; this is the kind of work culture we have’ is always their pitch.”

Good Founders are rare, most are stingy

Pranay says:

I am an early career engineer, and I have seen many of my friends leave startup jobs to get into well-established company. Mostly because the startups seldom live up to the exciting work culture image they generally promise. Also, many of the founders are very stingy in terms of giving away equity. The general view is that, its not fun to be in a startup, unless you are the founders/co-founders.

Anirudh says:

“In India, developers are generally treated like crap. I’ve got tons of offers from ‘business’ guys who have a stupid idea and a little spare cash. They don’t understand technology – and more importantly – it’s limitations. Anyone with a little field experience will automatically be wary of such people.”

Maybe the situation could be different if the founders mentor the employees, as Ayush Jain puts it:

“People who do join startups are mostly the ones who are interested in entrepreneurship or starting up themselves. These people do it for the ownership, respect and the appreciation of being entrepreneurs. The biggest mistake founders do is to treat them like employees. Consider talking to people you wish to hire about stock options as they join, or give them some reason to feel proud as an entrepreneur. This would also add to their ownership of the work they do and you would see a visible difference in their attitude towards work. But most entrepreneurs find it difficult to share the ownership of the company with them and thats why they find themselves struggling.”

As “Have to be anonymous” says:

“The founders of the startups are in the attitude of “giving life and supporting a family” for a few people than “taking help from a techie” mindset. Even if they know an employee is not a beggar who has joined his company to help him succeed in a venture, the employer’s behavior seldom reflects they have acknowledged this fact. This could be seen right from giving appointment orders till making the employee cry for relieving letters. And it would be funny to note the same employer read about “brands”. Would they know customers are of two types, internal and external?

“Yes, I was working in startups, and have now finally decided settle down for the “big fish nets”. I am now one of the so called tier 1 company employees. Afterall, if the current project is over, the company would actively search in full swing to depute me on another project. I wont get a pink slip as fast as I would get in a “get-the-job-done-and-go-home” startups.”

Good Startup Hires are Rare

As Rams says:

“There are not that many startup-type techies out there. That’s the simple truth. I am going through my 3rd startup and the reality couldn’t be starker. No, they are not hiding under a rock.”

As Upasana says:

“I am going to have to disagree with several people – Ayush, Ashish (Pocha), etc. above stating founders are stingy. I know at least a dozen including myself willing to give away 10-20% equity + decent monthly cash for a solid hacker. From architects in Yahoo and Amazon, to 1-person IT consulting guys to 3-4 years experienced guys in IT Services company to guys working in a 6 year old American startup’s Indian devcenter – tried them all. You know what? They just cant take the risk! So I dont think badgering Founders for not being open to dole out equity is a good enough reason.

“We got some early employees using a fair equation where some wanted more monthly cash + low equity, others wanted low cash + high equity. The decision was left to them on which package they wanted. We found that one of the guys after working 2-3 months and finding out the real revenue/margin numbers himself wanted to reduce his salary for a higher equity.

“I think smart hackers should know their self worth and also the worth of what they are building. If what they are making is exciting and hard for them may be its worth a pay cut for 2 years with a possible equity upside potential? After all last few months are showing indications of a bright M&A future.”

Ecosystem

Let’s face it – our ecosystem and family mindsets are not ready yet, we know this one and I think these are the “growing pains” of any startup culture. As Gowri puts it:

“These people talk nicely about wanting challenging jobs and new technology and all that, but get lured by ‘social status’ of branded companies and few thousands more.

“I even had one guy who left our company because his future father-in-law did not like that he didn’t work for one the ‘large’ companies!

“One guy resigned because he could not get a good bank loan since the banks were looking for branded or large company employees.”

Geek Out

When I had mentioned that I wish there was a ‘geeks grooming culture’, then the irreverent Pramode C E pointed out that that was exactly his latest venture – and he seems to have had great results in just a month since he started:

I began my new venture of mentoring B.Tech completed students on August 25. The ideas was to take in motivated students, build up their FOSS skills by making them write code/solve problems full-time, and try to use whatever contacts I have with friends and former students in the FOSS community/industry to get them placed with companies who need capable programmers.

Learn more about this on the IC Software website.

The lack of skilled people is an open secret. As Rohit says:

“At a general level, what we see is a clear lack of skills fulfilling each role, be it engg, sales, marketing etc.

“For eg: when we look for an engg. to write features, we only seem to get folks who know to write code. Customer acquisition strategies which many speak about are mostly traditional and nothing innovative. Forget about finding folks who help us scale, there are probably handful of them in India who are already picked up Yahoos and the Googles or now Facebook.”

Let’s hope that Kiran Jonnalagadda and HasGeek can indeed bring these skilled people together and breed a culture of such skills.

Hiring Strategies

Regarding, good hiring strategies for startups, Sameer Guglani has written extensively on this subject on his blog – Hiring method that works, What to look for in startup interviews? and Early employees – Salary & Equity.

Bottom Line

Startups need to pitch why they are better than big companies, it is the same whether it is about the product or about hiring!

As Saurabh Narula puts it:

“As you point out in your statement, hiring for a startup is a lot different than hiring for big companies – attacking the different problem with same mindset often misleads people in the hiring process.”

This has been an enlightening discussion for me, thanks to all of those whom I’ve quoted here (and many whom I’ve not quoted for reasons of length of this article) for their thoughts on this subject

Update: More great insights by Manu J in the comments.

Update 2: See Ravi Mohan’s take on the same.

Update 3: See Stalk Ninja, a unique initiative to whet good students and get them involved with startups.

We’ve all heard about how startups are key to the future economy of India and we’ve heard about how hiring should be a top priority for any company – then why is it that hiring is NOT a majorly discussed issue in startup events in India?

I ask this question because, in fact, it is HARD for startups in Bangalore to hire. The problem is of two extremes: The good folks you would want to hire either become entrepreneurs themselves (full of challenges) OR work for big money in big companies (may not have challenges, but feeds their social status). There seems to be no middle ground where people want to enjoy the work which is full of challenges and also have the stability of a salary and the promise of stocks.

Hiring has become almost impossible for startups – right from IIMB-incubated startups which have full of challenges and exposure to companies like Infibeam which does crores in revenue per year and pays market price salaries.

Where to find such good people?

• What happens to all those people who started startups via iAccelerator and Morpheus Ventures and did not succeed? Do they go into consulting or join a regular job?
• What happens to all the college students who talk enthusiastically about joining startups? What percentage of those students switch to chasing the money because of peer pressure? I’m told majority of students don’t end up joining a startup when they have a higher salary offer from a big company.
• Who are the kinds of people who go to events like DoctypeHTML5? Are they part of startups or are they part of big companies?

I really wish Pluggd.in would setup an anonymous/discreet matchmaking service between “startup-mindset coders” (the scarcity) with good startups (which seems to be in abundance these days, the irony!), i.e. focus on finding good people first, and then promote the available startup jobs.

Maybe the need of the hour for our startup ecosystem is hiring-for-startup events (“get people to get things done”) rather than startup events consisting of motivational speeches (“listen to high-level talk about how to get things done”).

Sometimes I think that what is missing in Bangalore (and in India, in general) is a hackerspace culture and a geeks grooming culture. Let’s hope HasGeek has something up their sleeves…

This is just a thought running in my head which I’m expressing it here – I’ve heard the “Why can’t I hire good people for my startup?” question so often in the past few months, almost on a daily basis these days, that I really needed to get this out of my head and type it out!

On the other hand, if you think hiring for startups in Bangalore is not really an issue, please do advise, many people I know would be interested to know how to go about it

P.S. I’m writing this while I’m listening to sessions at the NASSCOM Product Conclave and can’t help but wonder if all the topics discussed here are even possible without having the right people with you in your venture, after all, the founders can’t do everything by themselves

Note: This article was a result of a discussion with Ram of Metaome, a IIMB-incubated startup. They’re looking for good folks to join them, if you’re interested.

Update: Indus has a different take on this.

I will be speaking in a panel at the HeadStart Conference, Hyderabad today regarding what is the funding that was granted by the Govt. of India to my ex-startup, and how you can apply.

I converted the content I had prepared into for-web-only slides for your perusal:

Update: As of 22 June, 2011, I’m no longer with Infibeam.

Thanking the community

First and foremost, thanks to all who encouraged me, and offered support and help when I wrote about leaving my own company. Many people, without any personal benefit in mind, connected me to very interesting opportunities. And this is exactly how I got my next gig.[1]

What was specifically amazing to me was that folks were connecting me to opportunities that I would not have heard of otherwise, and enthusiastically vouching for me. Now that was really humbling. Within two weeks of my blog post, I had a job! And I didn’t even have to look for it, so thank you guys. As Seth Godin put it, who needs a resume indeed!

InfiBeam

So where am I joining? InfiBeam – which I can best describe as “Amazon of India.”[2]

So why am I excited about InfiBeam?

In my previous startup, I experienced the phase of starting from scratch till creating a product. Unfortunately, I did not get to see the second part, the business side of things, including the hard part of selling, the act of knowing the customer, the logistics and operations, etc. I was still yearning for that.

At the same time, getting to see this second phase a few years later would not have made sense because I would’ve lost the enthusiasm and momentum that I have at this point in time. So, in that sense, I’m really excited about InfiBeam because I’ll get to be part of this second phase.

Second, I was specifically looking for companies in “core” areas, in the sense, someone who makes consumer products and services in India for India, and specifically, either ecommerce or mobile. And, voila, the universe conspired.

Third, I was being cautious and really looking to understand the people in the company and not only what the company makes. After all, it’s only the people aspect which makes or breaks your experience and enthusiasm. And I spent quite a bit of time interacting with the people I would potentially work with, and I came out of the discussions very happy.

Fourth, what I especially liked most about the company was their customer focus as well as the focus of building the right culture inside the company. It’s very hard for startups to focus on these soft aspects, because it easily gets sidelined compared to the hectic everyday.

There were quite a few opportunities that I explored, but I intuitively felt that InfiBeam was the place to be. And I went ahead with that gut instinct.

Both Business and Tech

And, as an example of a great fit for me, my job description says that I have to take up any product or strategy and deliver it end-to-end from the business model to the technical implementation.

I had thoughts of shifting back to pure coding at first, but then decided a business focus is indeed a good thing, and something I wish I had taken seriously right at the start of my career (better late than never!). For example, quoting from a recent Deccan Herald article: > It cites Nasscom study which states that India faces IT talent shortfall of between 8,00,000 and 1.2 million workers by 2012. It observes that, though many producers continue to work with universities, government and other firms to improve the quality of technology education, and Asian countries continue to produce large numbers of IT employees, they, however, lag in comparison with North America and Europe in providing well-rounded technology education. Among Asian economies, the concern is that education systems puts too much focus on pure IT skills and not enough on IT in the business context. Likewise, top schools in the US and Europe, which do better in this area, face long-term challenges in cultivating science and technical engineering skills of its younger students. Thus, globally, the study posits that investment in skills development remains long-term imperative.

If it feels scary…

I am positive about this gig because I will be forced to become good at what I do because of the quality of people I work with, and knowing that you’re in a good environment when you consider yourself the dumbest guy in the room.

In such situations, I keep quoting Jeff Atwood:

If it feels scary, it’s the right choice.

Wish me luck!

[1] Specifically, a shout of thanks to Nimish Adani of Workosaur.

[2] Yes, this was a way of skipping the topic that, yes, InfiBeam’s current web design looks similar to that of Amazon.com design. Yes, I don’t like it too. It is a distraction which prevents potential users to proceed to the next step of appreciating the amazing services provided by InfiBeam.

Update on Jan 31, 2010: InfiBeam has launched the first Indian ebook store and the first Indian ebook reader.

Let me start with a story I had heard about long ago when I was at Adobe.

There was this guy who had come in for interviews for a technical role. He passed all the tech interviews with flying colors, the team liked his personality and felt he would fit in well, and the manager was all smiles. In the last HR-style round with the group head, he was informed that the team works on products that are completely owned by the Bangalore-based group and that there won’t be any travel to USA. The guy was taken aback. He told the group head “Sir, please let me go to USA for just one day. If I have a USA stamp in my passport, I will get one crore dowry.”

Needless to say, the guy was not offered a job.

I’m sure you can draw your own lessons and observations from this incident, because it will come into context below, about a discussion we’ve been having on Twitter. It all started with @debabrata who read my previous blog post on the magic of foss.in and asked:

why this ’5 years limit’ applies to Indian software pro ? In other countries people are happy being programmer after 20 years .

I asked the tweeps for their opinions, and it got very interesting.

@cruisemaniac said: society defined age to get married and settle down = ~27 = 22+5 failing which u’re an outcast! and: also, post that age, ur risk apetite goes down due to family and other commitments…

to which:

@HJ91 said: True. Very true. Outcast is the right word, and its sad. Outcast. Insulting, hurting and pathetic.

Wow, this feeling runs deep.

so I asked:

You mean risk appetite or time commitment? … how does risk appetite relate to interest in coding?

And the replies came pouring in:

@mixdev: One of the reasons why brilliant people end up being (just) tell-me-whatto-do-n-leave-me-alone software engineers

@cruisemaniac: I’d say both… U cant risk a new tech and venture 4 fear of financial security… U want tat cozy safe zone and pay packet.

@cruisemaniac: time is a big costly commodity 4 us… we indians cant afford to spend it at our will with spouses and children at home…

@mallipeddi: It’s very hard to keep getting bigger paychecks yr after yr if you’re a 30 yr old coder. You’re expected to become a mgr/MBA

@abhinav: I believe the reason is our society. We tie success to degrees, and later, more ppl you manage more successful you are.

@abhinav: Where in western societies your idea fails, here it is you who have failed! Our society doesnt appreciate risk takers

@abhinav: Yes, more money, higher status, easy life. And most importantly, more dowry!

@mixdev: Because our goals are set by the society & achieving them also in their control. You get bored faster.

@debabrata: I guess to the great extent our society dictates us what we want to be unlike the west

I found it surprising that the situation why people cannot remain coders in India is almost the same as why people want to become entrepreneurs! It’s like this: The passion for coding will remain only when you’re doing cool and interesting stuff. But big companies (at least in India) want only stability which implies boring tedious jobs with standard languages and libraries. There is no room for experimentation. So the coder will have to move to a smaller company or a startup if he/she wants to continue to like coding (I’m ignoring the case of research laboratories for obvious reasons of numbers).

But moving to a smaller company or startup is, by definition, not encouraged. As @abhinav mentioned, there is societal pressure for more money, higher status, fancier cars and bigger houses. There is nothing wrong with wanting this, but don’t force it on other people! Alas, it is hard to reason regarding this. I remember having a long argument with an uncle of mine, he was, hmm, “strongly” suggesting that I buy a car and I reasoned out why it makes no sense (after all, most peers of mine use the car only for weekend drives, not for everyday commute) but it fell on deaf ears.

So I’m conflicted here: Are there not enough people who are actually interested in coding, or is it that the interested people are being peer-pressurized into “moving up” into managerial roles and hence lose touch with coding? Or are we completely off the mark here?

Update 1: As suggested by Peter, read this entry tited “Stuck in Code” by Ravi Mohan for his tale on this topic.

Update 2: A related article in NYTimes recently titled “In India, Anxiety Over the Slow Pace of Innovation”

Why do I keep going back to foss.in? Because I’m the kind of person who needs extrinsic motivation. That’s why having a good circle of friends with a positive attitude is so important to me. And that’s why the foss.in community is so important to me. Because one must always strive to be in an environment where you are “the dumbest guy in the room”, i.e., be surrounded by really really smart people, so that you are forced to work on raising your own level. That’s how I feel when I’m in the midst of fantastic people such as bluesmoon, t3rmin4t0r, Srinivas Raghavan, and so many others. They are perfectionists who deep-dive into anything they are passionate about, and are invariably good at whatever they focus on.

The Good

Attending foss.in/2009 felt great for me because I took comfort in the fact that there are still people out there who are passionate about code and passionate about software. That is becoming rarer and rarer off late. I think it’s the “5 year limit” that I have observed in batchmates, most of them don’t want to code any more, and have moved on to so many other fields. While that is okay, the problem is that it has become a fashion to dis IT and software field.

Another factor was that everything is in the cloud and everything is a website these days, so does open source as a process matter anymore? First of all, the applications are not open source and even if we have the code (rare situation), you and I can’t fix the application/website unless you host it yourself.

But the foss.in community made me remember the joy of coding and joy of hacking.

Kudos to Team Foss.in for making the only community event and only IT event that is worth attending. It was fantastic to see how the concept of workouts had just taken off. And everyone’s been saying that all the keynotes have been fantastic.

In case you are wondering, I’m not the only one who was so enthralled by the event, for example:

See Lakshman’s writeup on the same. And so on.

Bottom line? Shut up and hack!

The Bad

Will miss the direction of Atul Chitnis.

What was missing

What I felt was missing is a discussion on the state of the art of software in each field, not just specific PoTDs. And I think this is more of a community perspective rather than the organizers’ perspective — organizers just provide the platform, community provides the content, as Atul keeps reminding us.

For example, consider my pet topic, the state of NoSQL databases – what’s good, what’s not, is it strange or expected that so many of them have come up in the last 1-2 years and all of them are open source (or at least the ones that we hear of). Taking it a step further, how it affects other fields of software. I’ve attempted to ask this before in a session at barcamp on whether webapp frameworks will adapt to NoSQL.

Similarly, what is the future of compilers, will LLVM + clang replace GCC (as @artagnon was speculating)? Will WebKit and V8 take over the world and leave Mozilla + Tracemonkey behind? Why are there so few projects using AGPL? What does it take to get full database dumps out of Wikipedia ? Will open source phones never take off? How does Eucalyptus help have an alternative with EC2? How does appscale help have an alternative to GAE? And so on.

In toto, I think there are three parts to this and I believe only the third part of which is done well already by the community and organizers: (1) what are the different fields and layers of software, (2) what is the state of the art of open source software in those fields, (3) getting people started and involved. I feel that only when we think on these lines, we will achieve Atul’s stated vision of “open source being the mainstream, proprietary software being the special case”*.

Thoughts?

* No flamewars please. I believe that the world will be better off by having all the infrastructure as open source software and having only the business logic / trade secrets as the proprietary part. At each stage of evolution of software, the stack grows higher, and the infrastructure/open source stack can grow higher along with it. For example, Robot Open Source and the Hadoop umbrella.

Thinking from an entrepreneurial angle, it seems to me that there is almost no mobile app market in India today i.e., it is not a startuppable market.

All the successful apps that are making money are transaction-based. For example, ngpay takes a cut from every movie ticket you buy through it. This is only possible for entertainment-oriented apps. The only other successful ones that I see are, of course, communication apps such as Gmail app. I see almost nobody using utility applications on their phones.

Things can improve only if internet-on-mobile was affordable! I think we need 3G for mobile app market to grow in India, but it is delayed yet again (Apparently, the government is not satisfied with the expected 250 billion rupees).

Let’s take a look at few numbers:

• 93.2% of Vodafone India subscribers are prepaid customers, which means it is unlikely they subscribe to monthly fees for internet-on-mobile. Right?
• 96% of Urban Indian mobile users are not accessing the Internet and 48% of Urban India mobile users accessed the Internet on their mobile only 1-3 times a month, on average!

Of course, there is no denying that there is growth year-over-year, but for an entrepreneur, it is not enough yet. Because you can’t build yet-another-social-network nor can you build content unless you have tie-ups with the big movie/music companies. The top websites in India for internet-on-mobile conform to the core needs list that I wrote about earlier, especially entertainment. The free wallpapers from zedge.net seems to be the hottest thing right now. Or as Rajesh Jain keeps stressing (and practises), focus on SMS and Voice for now.

Let’s hope the IAMAI will help things move forward.

Even when we get affordable internet-on-mobile, I wonder if ad-supported free applications will be the only popular ones always. Where’s the money?

Maybe I completely mistaken or I’m just whiny, because MediaNama paints a much brighter picture, from comics to unlimited music for Rs. 99/month to movie rental and chocolates. Hah! There is a gotcha there — all those announcements are from big guys. Where are the mobile app startups?

I am planning to attend Silicon India’s Mobile Conference this month to gain more perspective on this.

To round things up, here are some rough notes that I jotted down when Karthee Madasamy of Qualcomm Ventures talked about How to make a winning mobile startup at an OCC Meet on Aug 15. It was probably the only time I felt hopeful that a mobile app startup is possible today.

• Understand the status quo. Don’t do the status quo.
• If there are hurdles, that’s your opportunity. Otherwise, others would’ve taken advantage already.
• India 400 million mobile phone users.
• Segment the customer. Otherwise, big companies will be already on it.
• Don’t aim for 1% of ocean. Go for 50% of a small market that you undertand well.
• Don’t do today’s technology. Go for future. Don’t be 10% better, be significantly better.
• Do you have something unique that gives you strengths? Have a honest discussion on the problems and future competitors and your strengths.
• Can you partner with others in the ecosystem, support their weaknesses, and together be more strong.
• Ecosystem problems – operators, heterogenity of platforms and mobile phone capabilities, difficulty in educating customers, no Internet on mobile, etc.
• Only way a startup will succeed is by discovering a latent demand or latent technology.
• If operators are critical to the ecosystem, obviously they will charge more money! Why is that a problem because they are giving value back. Get the first million customers yourself and the operators will put red carpet for you. Startups’ strength is to turn the tables!
• Find a mechanism of educating customer about value of the product and that will obviate the need for operators.
• If only 40 million mobile Internet users, you only need half a million users to break through the barriers! People will come after you.
• Assume cost of building product or app is zero. Only building half a million customers is something.
• 120 million capable phones today. India is a fast market. Imagine 2 years later.
• Startups should change the game to their advantage. At the same time, it is NOT a zero-sum game. Make a win-win partnership. Both people should profit.
• Don’t complain about market research. Ultimately, you HAVE to understand the market better than anybody. Be resourceful. Also, accuracy is not important, the direction of the market growth is more important.
• Don’t go to VCs without 20,000-30,000 users.
• Can you scale up to 20 million dollars revenue? Then you’ll get your pay-off.
• Startups need to think how to beat the big guys.
• Make a state-of-the-art technology or business model and ask people to pay premium for it.
• First step for product management is segmentation.
• Make it clear to yourself about how you’re reaching your target customers. Don’t do it in a haphazard manner.
• Read about Ron Coase economist why companies exist.
• Read about Teece theory on who captures value in technology.