Thursday, January 05, 2012

Chinese cleantech companies forcing US counterparts to shut shop

Solyndra (Silicon Valley's poster child for clean technology) has gone bankrupt, since it was unable to compete with low cost Chinese manufacturers. A good take on the reality behind the doors by Forbes'Todd Woody.

Sunday, January 01, 2012

Can there even be a comparison?

Country Size: India x,  China 3x
Population: India 1.2 billion, China 1.3 billion
Installed Electricity Generation Capacity: India 185 GW, China 860 GW

Do you think we should compare further? Does the last data (coupled with second pointer) not explain why they can produce more? Think.

Thursday, December 22, 2011

My artcile on "Developing Entrepreneurial Ecosystem in India" - published in Business Review India

It is a fact that India is home to some of the best known outsourcing service companies, which have created jobs for thousands of engineers and have fuelled the outbreak of a young middle-class working population. However it is also a fact that in today's world of fast emerging technology, where innovation, creativity and entrepreneurship are the buzz words - we as a society are seen as 'job-doers' and not 'job-creators'. The society and the economy, have supported and nurtured a working population, but have failed to create enough entrepreneurs. Rather the whole idea of entrepreneurship, till about a decade back, was mostly associated with family-run businesses. And others from non-business background, who tried to diverge in these unknown territories of no fixed income (read salary), were not looked up to.

But things have changed in the recent past and entrepreneurship has slowly become 'cool' in our part of the world. We now need an entrepreneurship ecosystem to keep the momentum going and benefit from the trend. Some positive steps have been taken. For instance the decision of IIT Mumbai to allow final year students a chance to re-appear in the regular placement process, even after two years of passing out from the college, and in case where the student tried but was not successful in making her venture work out.

So what exactly is an entrepreneurship ecosystem and who (and why) will be its elements? According to Daniel J. Isenberg, professor of management practice at Babson College and executive director of the Babson Entrepreneurship Ecosystem Project, entrepreneurs are most successful when they have access to the human, financial and professional resources they need, and operate in an environment in which government policies encourage and safeguard entrepreneurs. This network is described as the entrepreneurship ecosystem. He even terms this ecosystem as the 'holy grail' for federal governments, which stand to flourish from these entrepreneurs.

A proxy measure to understand where we as a country stand today, in terms of a developed ecosystem, is our ranking on the ease of doing business index. A higher ranking for a country indicates that starting and doing business there is easy and which could also mean that the entrepreneurship ecosystem is supportive. According to the World Bank's latest disclosed index rankings on July 2011, India stands at 132 (out of 183 nations). The country stands particularly low on two measures which are, dealing with construction permits and enforcing contracts. It is evident that we lack on various parameters and which means that we should try to improve. Improvement measures can be taken across three key facets, which are – institutional, policy and social support systems.

Institutional level measures: The previous point of the IIT Mumbai initiative is an excellent example of institutional level support. Globally some of the highly recognized universities have focused centers for developing and nurturing budding entrepreneurs. One of the most notable ones include the MIT Entrepreneurship Center, which was founded with the objective of commercializing technologies invented by MIT faculty and student labs. The centre has produced lots of success stories in the past and every year MIT graduates establish more than 200 companies. From inception till date the centre has been able to produce 25,800 active companies, creating employment for 33 lakh people! Another case in point is a non-profit organization SCORE, which is a resources partner for the U.S. Small Business Administration and provides free of cost mentoring & advisory services to entrepreneurs.

Policy level measures: Policy is a pretty wide word and can encompass such government actions that can lead to attracting and retaining more entrepreneurial talent in the country. This could mean fiscal benefits such as tax concessions, procedural ease in terms of guidelines and laws to be followed by a fresh startup and or other measures such as change in laws and business rules. A case in point here is the Startup Visa Act of 2011, which was introduced in March 2011, and which proposes amendment to the U.S. immigration law. This Act is primarily being supported by investors who fund startup companies across the globe and are therefore pitching for such immigration rules that instead of such startups being residing in other parts of the world, should permanently be moved to the US, thereby creating jobs and Intellectual Property rights.

Social support measures: And last but not the least we as a society need to promote entrepreneurship culture. We should try building some sort of a social support for the youngsters and others who are trying to break free, have ideas and the ability to take risks and try out new things. It is ok even if they fail; at least they would come out more enriched with an experience of running things firsthand and managing all aspects of a business. Forums like the TED can provide the necessary emotional support and guidance for our budding entrepreneurs. TED was started in 1984 as a conference to bring people together from Technology, Entertainment and Design, to discuss and share new business ideas and connect the ‘thinkers’ with the ‘doers’.

While some of these measures such as institutional support can be implemented pretty fast, others like policy and cultural support may take some more time. In the meanwhile it is great to see that entrepreneurship is slowly getting acceptance as an alternate career choice. The bottom-line here is that the country today needs more and more entrepreneurs who could create jobs and spearhead innovations in technology and business. After all entrepreneurial activity acts as an antibody for the growing economy.

Thursday, December 01, 2011

TechCrunch - Business & Controversy

In the web parlance, ‘TechCrunch’ is (was? Read full story ahead to know more) the Google for anyone associated with technology startup companies.
Ok, but what do they actually do? As per the company’s website “TechCrunch is a leading technology media property, dedicated to obsessively profiling startups, reviewing new internet products, and breaking tech news.” So, basically it is a one-stop shop (or rather cafĂ©) where fellow and wannabe entrepreneurs can meet, share and learn, while the investors can track and follow worthy business ideas. As of today, the company’s website, including its network sites, boasts of about 37 million page views per month, and regularly reaches out to more than 12 million subscribers. TechCrunch also hosts the popular startup event – Disrupt Series; and The Crunchies Award.
Forty-one year old Mr. Michael Arrington is the brain behind ‘TechCrunch’, which he founded on June 11, 2005. Michael, a Stanford Law graduate, practiced as a corporate and securities lawyer with a couple of law firms, followed by trying his hands on web-based startups, before hitting it big with what essentially what was his personal blog. Honest views, opinions and an ability to break news first became some of the success mantras for the blog. Michael was able to grow the spread by hiring the right kind of people, and allied services such as virtual and real meeting places for entrepreneurs. Soon TechCrunch grew to a stature that investors started relying on the site for taking investment decisions. In May 2008, the Time Magazine named Michael as one of the world’s 100 most influential people.  
Michael became the poster boy of success for the blogger community. He was famous for his straight from the heart comments. One of his famous quotes and inspiration for the startup guys was at his speech at the 2010 UC Berkeley Distinguished Innovator Lecture Series, where he told the students that - “the best thing in the world is to go to Harvard for a year and drop out. Everyone knows you were smart enough to get in.” And he proved it when he managed to sell TechCrunch to AOL for a handsome USD 30 million, in around September 2010.
However, there aren’t happy endings to all fairy tale stories.  Post sale to AOL, differences were reported in the editorial style and process followed by Michael till now, and the way AOL wanted to run the show. Meanwhile Michael announced his plans of starting a venture capital fund to invest in web startups, named “CrunchFund”, to which AOL agreed to invest in USD 10 million. This was taken skeptically by the media who hinted at a possible collusion whereby Michael and his TechCrunch team would propagate only such companies, in which CrunchFund has or would be investing.  Even people close to Michael, like contributing author Paul Carr strongly condemned the venture capital business idea, stating that it would hurt TechCrunch’s editorial credibility. The NY Times in its story (dated September 4, 2011) summed it up as – “If insiders can trade on the news they publish, readers may become an adjunct to a business that is less about public information than private gain. 
AOL, which some say was anyways waiting to take some action against Michael, did not let go off this opportunity. According to last news on the issue, it is evident that Michael was shown the doors by AOL management. He is now managing the fund and has also started a new blog – ‘Uncrunched’ & the millions of ardent followers are waiting to read him again, afresh!  

Public Private Partnerships: What and How?

Public Private Partnership (also referred to as ‘PPP’, P3) is a mutually agreed business relation between the government and one or more private owned companies, to deliver a public project. Typically under the PPP route, the government conceptualizes a particular project, decides on the risk and reward sharing mechanism between itself and the private company, followed by bid process for selection of such private partner. The project is often done through a Special Purpose Vehicle (SPV) route, where both the partners share investments.

From the days of World War II to about 1970s, governments across the globe had spend a significant amount of resources in creating public infrastructure services, such as roads, power plants, water distribution systems etc. Also by this time the notion that people at large should get these services for free – was slowly changing. Therefore new models for creation of large infrastructure projects were been analyzed, which would take some burden off from the governments as well as result in people paying a rational price for use of such services.

PPPs thus came into fashion. The novel idea behind a PPP is that such a partnership should bring the best of its partners. While the government’s role is seen as the one who provides for capital, use of assets, and responsibility for social and environmental concerns; the private company is expected to bring in efficiencies in the form of better project management, speedy and on-time delivery, and innovation in execution and operation.

PPP is today successfully tried in almost all of the developed and majority of the developing countries. International donor agencies, such as the World Bank, Asian Development Bank and the Japan Bank for International Cooperation have been the key proponents of PPP and its spread to the rest of the nations. The sectors / industries where by and large PPP projects have been widely used are:
· Roads and Highways
· Gas Pipelines
· Electricity Generation and Distribution
· Water Distribution and Treatment
· Stadiums

PPPs have got their share of failure stories as well. At some of the instances projects have gone completely off-scale due to differences between the government and the chosen private company. Often these differences arise from the deviation in return on investment expectations of the private company. However a well devised PPP project is worth its try as it helps in bringing benefits to the public at large.

For more on PPPs and Popular PPP Models, please see the link below:

Saturday, November 26, 2011

comparing startup culture...

Startups: Silicon Valley Vs. The Emerging World (source:

Editor’s Note: Omar Koudsi is a co-founder and CEO of Amman, Jordan-based Jeeran, the largest review site in the Middle East and North Africa. You can follow him on twitter here @omarfk
On my way to attending an Endeavor Summit this summer, I had the following conversation with a customs officer upon arriving in the U.S.:
Immigration officer: What do you do for a living?
Me: I work at a startup, and I’m here to meet people from my industry.
Immigration officer: Ok. How long have you been at your current job?
Me: We started around five years ago.
Immigration officer: Five years! And you still call yourself a startup?!
This interaction has stayed with me because it seems to me to be a great example of the discrepancy between the reality distortion field that is Silicon Valley — and the reality almost everywhere else. Even the immigration officer at the San Francisco airport was of the opinion that five years is too long for a company to consider itself startup.
Being from Jordan and having visited Silicon Valley on a number of occasions, this visit (along with others) continue to show how the realities of the Valley stand in stark contrast with what an emerging world founder, particularly in the Middle East and North Africa, face to start and scale a Web business.
I believe the lack of a well-developed ecosystem (funding, mentoring, risk culture, lawyers, human resources) puts the burden tenfold on the entrepreneur in the emerging world. In many cases, foreign entrepreneurs have to do ten times the lifting of an American startup — for a much longer period of time to boot — in order to succeed.
My company (Jeeran) was lucky to find a VC firm called IV Holdings that had emerged in 2006 — way before entrepreneurship became cool in our part of the world — and it changed everything. Of course, it still took us a whole year to close our first round of funding, and really, throughout that period, there wasn’t any negotiation of terms — it was all just pushing papers.
In the Middle East, few had done this kind of transaction before; we (founders, VC partners, lawyers, gov. departments) were all flying by the seats of our pants, figuring things out as they happened. Not to mention, before we were able to find a VC firm and secure our first round of funding, we had worked full-time on Jeeran for a full three years, bootstrapping, relying on what revenue we created, and additional generosity from our mom/brother/cousin investors. This is true for the majority of startups in the region.
But, back to my trip to Silicon Valley: I attended a workshop at Stanford University given by a well-known human resources expert on the best ways for startups to find top tier talent. One of the tips he gave us was to interview at least 10 people for each position before choosing the right candidate — to take your time and be selective.
I found it humorous, since we barely find a handful of people with enough expertise to make a difference, let alone 10 people lined for the database, UX, and product management jobs we (and so many others) are hiring for. Founders in the emerging world are mostly occupied with building-up talent as it comes along in bits and pieces, not recruiting it.
Like most startups, we wanted our team to feel ownership over what we were building, so we sought to create a stock option pool. We worked with the top lawyers in the region and it took us around eight months to have it ready. In the valley, I got the feedback that such paper work (term sheets, share holder agreements, etc) are template-based and get pushed along by administrative assistants.
Some of this much-sought-after legal framework is so popular they get published on Techcrunch! Of course, I forwarded this link to our legal counsel who found it quite useful.
I found it comforting that many founders in Europe and even the East Coast complain about many of the same issues: Lack of venture funding, lack of talent, and an ecosystem that penalizes risk takers. Of course, this situation has much improved for them and for us, but it made me feel less lonely when I hear tales of East Coast founders trying to convince Wall Street talent to join a startup. We still lack that kind of talent pool (thankfully I guess, right?) to recruit from, but clearly the cultural challenge of jumping ship to a startup is shared.
My team and I will continue to make pilgrimage to the valley and soak in experiences. We will happily put up with the mocking of how long it takes startups to shift to second gear for us to learn as much as we can.
However, here is an invite for the Valley to go out and see how the startups of the world are solving problems in ecosystems void of the many resources taken for granted by the Y Combinator-accelerated generation.