Success may just be Around the Corner Date:   Thursday , August 29, 2013 Our investment focus is on early stage IP driven technology start-ups in the ICT and Life Science Sectors, largely in the B2B space. There has been enhanced activity from start-ups which have learnt that Intellectual Property will give them the required edge to compete in a crowded marketplace that has hitherto been the exclusive playground of established companies. While the maturity of technology start-ups has increased, this has also been enabled because large enterprises have shed their earlier reluctance to work with smaller suppliers. As these enterprises in India mature as consumers of technology their focus on suppliers will shift from service delivery capabilities towards technology capabilities, which will work in favour of start-ups. System Integrators are also welcoming start-ups as technology partners to fill gaps in their offerings as they try to move up the value chain and provide holistic solutions rather than pure IT services. There also appears to be an early gravitation of Investors towards these start-ups, as they look for stronger differentiation in their portfolio companies. While these are still early trends which will play out over the next few months and years, customer acceptance, ease of finding delivery and go-to-market partners and greater availability of capital are likely to fuel more start-ups and make life easier for the existing ones. Importantly, it will help them set up a launch pad in India to tackle the global markets, addressing which I believe is key for a start-up to scale. We are therefore a few years away from the day when an Indian start-up can walk upto a global enterprise and make a direct sale. Emerging Technologies I have, for long, been following battery technology, because I feel that if there is disruptive progress in this technology, it will have far reaching impact and change the way we live. While we have significantly improved our ability to harness power from multiple sources, the need is to be able to store energy and transport it in an efficient manner. Sadly, progress on this front has not been heartening. The more recent happening which has sparked a lot of interest is the activity around fracking technology to extract oil and natural gas from shale. Advances in this technology could mean an alteration at a global scale of not just our energy and environment paradigms but also of geo-political and economic considerations. While the areas above are interesting to follow, more because of their potential scale of impact on our lives, areas of focus as an investor, are on an entire range of start-ups which could emerge to tackle the requirements of Personalization. Personalization could be applied in any context, and I believe that this will be a key influencer in attaching a premium value to a service. We have a couple of companies in the India Innovation Fund portfolio which address this area. Mitra Biotech has developed technology that will enable the personalized prescription of drugs to cancer patients resulting in improved efficacies and costs. On the other hand, Iken Solutions has developed an artificial-intelligence based product that can be used to personalize delivery of services to customers in multiple sectors like Mobile VAS, e-Commerce, retail and banking – anywhere where there is consumption of services. We may see a day soon when devices like mobile phones are built with intelligence to provide personalized user experience. The opportunity range is unlimited in the personalization domain. Areas of Opportunity for Innovation When I was managing the innovation initiative at NASSCOM, and we were looking at which segment had the greatest propensity to innovate, it was apparent that the start-up segment was way ahead of the rest. While, for established companies, innovating may mean putting value at risk, for start-ups, their survival is at risk if they don’t innovate. This leads to a culture in start-ups that make them well equipped to build disruptive innovation. The highest propensity to innovate lies at intersection points. Take for example the intersection of two domains – healthcare and information technology, automotive and electronics, semiconductors and medical devices and several others. Apple demonstrated that with its products – often sitting at the intersection of sophisticated electronics, world class design and communication. To extend the argument further, Innovation also lies at the intersection of skill sets or in multidisciplinary approaches – I have, for example, of late met a few surgeons, who have become entrepreneurs – using their knowledge of medicine and complementing that with an eye for design and entrepreneurial acumen to build and sell medical products. Very often it takes this multidimensional perspective that leads to being able to define a complex problem statement and then suggest innovative solutions to address it. My Piece of Advice Think big, but act small – “If you can dream but not let dreams be your master...” Building a quality product is not the challenge in itself – it is a must have. Taking it to market is becoming less of a challenge than it was earlier. Monetising it well remains the hardest challenge. So build in business model innovation with technological innovation to successfully unlock its commercial value Research your competition well – a majority of start-ups that I have met do not do this well. Knowing what else is available may trigger innovation that will allow you to differentiate yourself. Be committed – the first quality I look for in a founding team is their commitment to the mission – yes it is a mission, not a road to quick success. I am reminded of a cartoon that I recently read, showing 2 prisoners in different cells trying to dig their way out of jail. The first required to traverse double the distance that he already has dug to go before he could reach the outer jail wall, but was still at it, digging away. The second had dug his way through 99 percent, and was a foot away from freedom, when he gave up and turned back. Success may be just around the corner. Persevere.