Technology companies don’t exist in a vacuum. They exploit market inflexions and/or technology disruptions…
Sharad Sharma, CEO, Yahoo! India R&D:
You may start your company with a brilliant idea and then look forward to scale up the business, however most of the time the model of scalability changes according to market fluctuations or a myriad other reasons. Market changing disruption and unpredictability as to what the market will look like after 2, 3, or 5 years from the present are important contenders that companies face. Being able to think about the ideas needed to start a business is just half the battle. Being able to execute these ideas, which should make themselves customer worthy is a different ball game altogether.
Kris Gopalakrishnan, CEO & MD, Infosys:
There is a realization today as to what technology can do. Many products in any organization cannot be produced independent of market inflexion or technology disruption. Rather it makes sense to create products with your company’s partners in sync with the need of the customer. Through such co-creation you are enhancing your customer’s value and usability experience.
Praveen Vishakantaiah, President, Intel India:
The customer must be kept in mind while developing products. This makes the technology realizable or visible to customers. Everybody knew what storage is, but Apple went ahead and created the revolutionary iPod, which redefined music storage and ushered in the ‘music-in-your-pocket’ era. Such technology disruptions are created more in the startup realm and less within IT heavyweights as the latter carry the burden of product, people, and processes accumulated over the years. The industry needs to look at the customer needs, than looking at technology for technology’s sake. Tata’s one lakh car, the Nano, is an example where the customer needs were looked into first and what technology needs to be used to achieve the customer needs was figured out later. Startups are poised better to take care of shareholder requirements and the changing culture and mindset of their organizations. The leadership in any company must be attuned to customer preferences to muscle their way into the customer’s heart.
Dr Vivek Mansingh, Country Manager, Dell India R&D:
Your billion-dollar idea can meet with success in India if it is meant to provide solutions for the crying four problems that our country faces currently, and which can be dealt with innovation using IT. This means technology companies cannot exist in a vacuum. The primary four public issues that are muzzling India are sub-standard health services and booming population, lack of cheap energy, illiteracy, and shortage of food. These problems require immediate solutions and IT must bail out India from this conundrum.
Global Techno-Economic Implications
The software license model is said to be dead and what may come in its place could be ‘hosted software’ model where your PC can access software running on a special server rather than you buying an off-the-shelf-software. This seems to be the way ahead and an example in case, is salesforce.com. Early adopters of the hosted software would be the small and medium businesses. The SMB sector is ravenous for technology to make it function on a lean cost model. However, the cost of ownership and managing commercially available technology make the SMBs vary of introducing the technology into their organizations, especially in the case of enterprise software. The hosted software model may open a whole new latent potential wherein the SMBs get more access to cheaper technology. If this IT revolution could happen, technology is poised to take a new turn for many industries at the grass root level in India.
Data Centers will spring up wherever energy is cheap and it could happen in Russia, Alaska, and the Middle East. It could be a data center in Alaska managed by Indian engineers with users scattered worldwide.
CEO or CCO? Chief Executive Officers need to be Chief Change Officers
Founders of startups begin to face ego hassles when the CEO they have hired to take their startup to next stage goes against their ideal policies and pronounces that the existing market models of the company are wrong. The situation gets worsened as he or she takes the lead to create new models against the founder’s wish. Hence leaders need to be magnanimous and think about the continuous development of the company.
If you stop growing the processes of creating innovative products and their defining features with the whole package at a competitive price, then the decay begins. In Infosys we have a startup environment where we try to do new things every day. Hence a leader should understand the continuous technological development that is happening around the world and learn about it. He or she should respect others’ technological background.
Any CEO has to relentlessly focus on the differentiating factor of his or her company amidst competition. There should not be any compromise on that, or else the enterprise stagnates.
With regard to startups, they go through different stages and as they mature, the need for people who have dealt with larger corporations earlier arises. Hence different people are needed during different stages of a startup’s growth. Radical change should go along with succession change. Once a startup is no longer a startup but an established company, it gets more focused on customer needs. This traction should be maintained for the company to scale up successfully.
A Member of Audience:
I disagree with Praveen’s statement because small companies cannot afford succession change, as they must focus on daily changes in the market and the business scenario, which leaves out with little time, for the limited manpower. Added to this status quo, there is also a lack of competent people who can scale up the startup to a bigger entity.
Avoid getting stunted! How companies can reinvent?
Don’t ever think and bank on your presumption that your idea is unique in the world. There maybe ten other people in the world having similar ideas. Most revolutionary ideas in the world have come simultaneously from multiple areas across the world. However, only a few succeed. This ‘X’ factor to success is simply execution of the idea fuelled by perseverance. Value creation totals to 10 percent of the success, while the remaining 90 percent is the contribution of relentless doggedness.
A startup aspiring to be in the big league needs to run into a funk or a state of nervous apprehension. Had the current biggies not run into a funk earlier, they would never have reached stratospheric heights in their game.
Everybody has got access to the same information database existing in the world. However only a few succeed and their winning ways could be factored on how they analyzed the information. This is the reason why Google came on tops when there were pretty much similar competitors in the online search ring like Netscape and Altavista. Google perfected the art of serving search results in a way that was relevant to the consumers. At Intel 80 percent of our customers reside in 400 cities across India. How we reach them depends on how we analyze the data pertaining to their consumer behavior.
Creating Value-chains and Ecosystems: The India Challenge
The linkages that exist between a promising startup and successful established companies do not yet exist in India. If such linkages existed then the big companies could provide the fledgling but promising startups with the marketing, retail, and distribution might needed to make them more visible in today’s overcrowded markets. The Infosys and Wipros of the world find it easier to connect with established ISVs but not promising ISVs.
Sharad’s view is more of a market problem. Opportunities are arising faster than the industry’s ability to scale up with infrastructure, leadership, or manpower. This leaves out many startups in the fray. There should be industry-academia-government support to nourish the startup ecosystem. The industry needs to understand that enabling the startups would actually foster the growth of the biggies too. Forums, which enable interaction between startups and industry stakeholders comprising of customers, venture capitalists, and talented workforce on the lookout for opportunities towards growth are urgently needed. Startups should understand the economics of scaling too. It would perhaps be counterproductive if they take a risk and go onto the path towards high volume growth. Sensible growth in a phased manner is the key to sustained success. Also there is a great need for a mindset change as success begets envy. Subverting startups, for instance, by copying their ideas and getting revenue is not a great idea. The culture of co-operation and co-existence is needed for the startup ecosystem to thrive. To get a winning breakthrough, I don’t think lack of funding is the problem area for startups. The key is to give a value proposition to those possessing funds and attract them with the merit of the idea.
Look at the top 25 companies 25 years back, and compare them with today’s top 25 companies. Many successful companies of the past do not figure in the present list. Why? The simple answer is: market evolution, wherein those who did not evolve with the market just took the slide downwards.
Next big thing to happen to the Indian Tech Firmament
Co-creation will be the new buzzword, wherein when developers create the product, there is active involvement of customers and beneficiaries through online forums during the making of the product. Thus both of them co-create the result and there is bound to be lesser product failures. Earlier there were many product failures from India. Now, there is no reason that the next ‘YouTube’ cannot come out of India. Today a company, say, in Koramangala, Bangalore, can host consumer videos of the volume of a YouTube without the need for possessing even a piece of data center equipment, courtesy new technologies such as cloud computing. Cloud computing brings supercomputing through the Web by networking large groups of servers that often use low-cost consumer PC technology.
Apart from this, I think, in the future, the retail and entertainment business is going to bring in major business for IT.
Forget the ‘U’ (You) tube; India can create an ‘A’ tube!
Information analytics will be the next big thing. Technology disruption need not be brand new technology all the time. It could also be what already exists.
In our hi-tech industry the yin and yang of value creation and value capture has played out constantly. Earlier in first generation IT, IBM gave software free and made money on hardware. In fact, their monopoly was based on proprietary hardware. Later Microsoft, the face of the second generation IT, came along, commoditized the hardware, and made money on proprietary software. The third generation YEGA companies – Yahoo!, eBay, Google, and Amazon - are giving away software for free and are making money on the back of their proprietary meta-data (information about data). So it’s a fair bet that meta-data will eventually become open. People will innovate on top of this openness to build a proprietary edge. I don’t know what that proprietary edge would be. My conjecture is that it would come from the realm of social science. For instance, it could be the lock-in from the ownership of online community relationships. The next innovation in this regard could be from Israel or India.