How to build a world class technology company in India? Date:   Tuesday , August 16, 2011 It is often said, that great technology companies do not come out of a vacuum but from technology disruption or big changes in the market forces or customer forces. While India has witnessed a great success in the IT industry with its prowess in services, the last decade is seeing a new wave in the industry where many are making a great attempt to move from the services legacy left by the likes of Wipro, Infosys, Cognizant and others. But the new generation of entrepreneurs that has gripped the Indian IT industry is focusing on buzz words like “software product” and “Intellectual Property”. It is observed that though are and have been great ideas that have been circling the market, a very few actually hit the spot and created a name for themselves. In most cases what seems to be missing is that ‘X’ factor that perhaps holds the key to an entrepreneur’s success. So what does it actually take to build a world class technology company in India? This was the question that was addressed at the CEO Conclave held by SiliconIndia in its flagship event - Startup City in Bangalore. Are you ready to be an entrepreneur? One has heard the clichéd talk of an entrepreneur needing a passion and belief in his or her ideas and not giving up on it but there seems to be a need for more than that if one truly wants to be able to build a successful product. Dr. Vivek Mansingh, President - Collaboration & Communications Group, Cisco India, advises that though entrepreneurship is becoming a trend today among the youth, but one must not jump into this bandwagon unless you are sure you are ready for the long haul. He believes that to be an entrepreneur one needs to have certain personality traits. “Startup is not for everyone. Do you have the personality and have demonstrated the abilities in your job so far that makes you believe you are ready for a startup?,” he asks. Ability to think far, having a passion and conviction, ability to persevere, risk taking abilities and strength to face failure, having a thick skin to face rejection, ability to think different are some of the essential personality traits one must posses before joining the startup bandwagon. The best way is to have some honest people around you and let them judge whether you have these qualities, suggests Dr. Mansingh. Engage with customer: They decide the fate of your company But what if you are an entrepreneur material, do you also have the right idea/product that is sure to disrupt the market. Many a times one has a good idea but when it comes to practical application of it, most of us fail. Shoaib Ahmed, President, Tally Solutions recalls, his experience as an entrepreneur before Tally Solutions. He had started a software company with out knowing what to do. Though he had some ideas but was unsure how to go about it. He approached one of his friends who did market research, identified market needs and helped companies take effective decisions. When he told him about the company, ideas and the work, he gave an advise that Ahmed has held on to till date. He said, “Shoiab, don’t waste your money with me. Rather what you need to do is go out to the market, meet customers, engage with them and they will tell you whether what you are saying has enough value or not and will actually work,” reminisces Ahmed. The fundamental source of all revenue and all your decision making and design is based on your customer. In today’s excitement and energy we tend to forget this focus. Though this takes time, but one needs to have patience even though there is tremendous pressure to bring in things faster. “I believe that the innate sense of what is the right thing to do, what they say is the instinct of a CEO comes from these things, which is, to be able to go out and understand what the right thing to do is. To cut a long story short, it is important to trust your instinct which developed over a time, is the key to success,” he adds. Similalry, Manav Garg, CEO& Founder, Eka Software, shares his story of building a product company. Having come from the commodities and trade background, he had met more that 500 companies. Though all of them talked about the need for a proper system, there was no one doing anything about it. One day he decided to leave his job and started Eka Software. It was then during a meeting with a CIO of a Fortune 500 company that something he said made Garg work on his ideas. “After the meeting, the CIO told me, though the product is great but he was apprehensive about it as he had seen even a single product company from India that could confidently claim to continue existing in the market after a period of time. Are you sure you will last long; will you invest in a R&D for next five years, he asked. These are some of the concerns customers abroad have about the software companies from India,” explains Garg. Shun the Naysayers When Mukul Kumar, Co-Founder and Senior Vice President Engineering, PubMatic along with his co-founder was building an ad server, there were many who said it would not work. There were many companies like Double Click which had been doing it for a long time and for a startup to attempt same was impossible. “We bought two computers and set it up in my garage and started working on it. Though many discouraged us, we decided to follow our hearts and our minds. All the while we also took in some advice given to us by others,” says Kumar. In three months time both had built the ad server and in six months they had released it to several ad publishers. It turned out to be one of the most performing ad servers in the market. “One of the lessons I learn was that when you are doing some thing big, there are always the naysayers but you must have the inner conviction but realistic,” advises Kumar. Hunger and Passion: The back bone of a startup Obama once visited a school in the U.S. and told the kids there that kids in India and China are truly hungry and hardworking. Hunger here means passion. Shouvick Mukherjee, VP & CEO, Yahoo! India R&D, recalls his experience of working with the founders of Yahoo! in the late 90s. “When I joined Yahoo! 11 years ago, it had already become a highly valued company. But even then I saw David Filo and Jerry Yang put in at least 16 hours of time to make sure every product is successful,” he says. Back then Yahoo! used to do one push every night at midnight. Though there automated scripts to check this, but still they would see them sit and check everything on page before leaving for home. And at that point Yahoo! was valued at least $30-40 billion. No matter how big your company is, you should always ensure everything is running smooth and give personal attention to the happenings around. It is this level of passion and hunger that makes people successful. Another thing is customer base. When you are in consumer oriented business like Internet or Mobile most often you do not see your customers. You can see consumer patterns but not actual consumers. Leverage on the data you have, if you are building a global company then make use of the data insights for it will give you a the right market indicators and customer demands, says Mukherjee. Organizational Culture: Most times, when asked “why are you starting a company?”, people do not have the right answer. Decide why you want to do it. Is it because you want to make a quick buck or want to create a legacy of a business. Vikram Shah, President and Director, NetApp India talks about the day the CEO of NetApp addressed the team after its successful IPO. He asked the team that now that we have done it and are successful what is it that you want to do? Unanimously the team replied that they wanted to build a model company. It is this thought and vision that matters. Team is important and a successful company is built by the team. Very often people start a company with people who have been loyal and with one for a long time. This is the wrong approach. “When I went to start a company ten years ago, I had a great plan, a great PPT and I met Kanwal Rekhi. He looked at me and asked me about my founding team. I told him how each one of them had been with me for the last 10-12 years. He said I have a wrong team because they are too loyal to question you,” says Shah. Handpick the first 25 people in your organization and ensure they are the best you can get out there. This will ensure that the team they recruit later would be the best. At the end of the day, what matters is the culture when building a company. As a founder ensure you have built an organizational culture where the employees feel a sense of freedom for their thoughts. When an organization grows, several layers come in where and an innovative idea gets lost in these. Other Do’s and Don’ts for a Startup Be stingy: Even if you have raised venture capital, count your pennies. Make sure every dollar, rupee is accounted for and try to break cash flow even. Once you do that you have a lot more options. You can approach customers confidently and they will believe your stories. Never think you are right at the first time: You will make mistakes throughout but learn from them. Never lose focus and walk through the value proposition with your customer. Being in right place at right time, this will give you less room to make mistakes. Take risks: You have already taken the first plunge by giving up a well paid secure job to become an entrepreneur. The risk taking does not stop there. When you go to market and build a product, you have to decide and balance what features to build. Every customer will demand, the earth and the moon and the stars from your product, but it you have to decide what to include and what not to. Identify what features will fetch you money and keep customers happy. Know your market: Don’t follow trends create trends. Unless you know your customer, trends will not help you. Trends only help in value proposition. People: Invest in sales early on. Build a strong sales team even if your product isn’t ready. They will go out and help the word get out for your product, line up customers and create a pipeline for demand. This way you will not have to start the sales cycle until after the product is ready as sometimes it takes too long a time. Be ready for change: Never underestimate the power of your invention but falling in love with it is also a bad idea. Be ready to change it if the need be. Do not confuse loyalty with competence: Surround yourself with competent people not loyal people. Success is what other people do to you. Ensure you have credibility in people around you so that they will accompany you in the journey.