Start-up Ideas We Would Like to Fund
Date: Monday , July 12, 2010
A spontaneous answer to this question would read “those that would generate returns that would keep us smiling”. Deeper thought suggests that would not be a root cause, but merely a symptom. Therefore, if the question were to be broad-brushed, the answer would be – “We would like to invest in ideas that change the way we live our lives today”. If this happens, other things follow.
How do we therefore determine if an idea has the potential to change the way the world lives today? If we do not wish to play Nostradamus, the only way to answer that is by evaluating the enablers that enhance the probability of success of an idea.
The enablers we constantly explore when we analyze the multitude of start-ups that we encounter are the team, a compelling value proposition with the ability to scale and the “execution-ability”. When we come across start-ups, we often wish that we could pick different components from different companies and put them together to combust – We often wish we had the luxury that the selectors of a World XI have - putting a Sachin Tendulkar with a Wasim Akram in the same team. Add Shane Warne to the mix, and they mere thought of the combination is heady.
We also often wish that we could merge teams as well. Most often, it is to put together a great set of technologists with a group talented in marketing and organization building skills.
We come across young teams as well as seasoned professionals, sometimes with prior entrepreneurial experience. While we love the young teams because they often have the ability to fail, and have the resilience, flexibility and time to pick themselves up and give it another shot, the seasoned professionals are often preferred for more than a reason. In youth, it is the norm to be hungry. Hunger in a seasoned professional is rarer and tempered with wisdom. The prior success of these professionals also often means that their aspirations are on a far bigger scale.
A compelling value proposition with the ability to scale
The value proposition is often reflected in the idea. The crux of it usually lies in the business model. Is your venture, for example, building water purifiers and selling them, or is it creating a solution that will supply water to a city if it fails to rain for a year. The scale and complexity of the problem and the uniqueness of the solution combine to provide a compelling value proposition.
Ideas which are great candidates for funding also those that will seed other businesses. Take for instance Apple’s I-store or Twitter. The number of applications and businesses developed by third parties that have sprung to life on account of these are testimony to the power of these offerings.
We are also still searching for that elusive B2C model that would propel India on to the world map. The reason is simple - B2C is typically synonymous with scale.
The execution-ability of an idea is contingent on several factors including the ability of the team to execute in as much as whether the business environment will allow the idea to flourish e.g telemedicine with a rural focus cannot be an executable proposition until the telecommunication and end device ecosystem in rural areas is developed. Many a great technology has failed to be monetized successfully. The gap between a great idea and a commercial success is a wide chasm, bridged by the ability to execute.
It is the successful confluence of the above enablers that brings an idea to success and if even one of these is outstanding, the idea could eventually be a gamechanger. We therefore invest, not merely in the idea, but in the potency of these enablers.
The India Innovation Fund is, of course, governed by a mandate. In line with the areas in which the promoters of the fund viz. NASSCOM and IKP Knowledge Park operate in, ideas in the ICT and the Healthcare spaces are where we see ourselves equipped with the ability to provide value to an entrepreneur. Further, while in most cases, a funds fiduciary responsibility is to its investors, we carry the additional expectations of our promoters – a strategic role towards the development of the ecosystem. Ideas that we would like to fund, would therefore revolve around the development or advancement of technology and hence, creation of intellectual property.
“Imagination is more important than knowledge”. What Albert Einstein stated in the early 19th Century holds true to the day. The power of imagination must however not be viewed in a limited sense, to a great idea alone, but also, to its application towards the execution. It is the potent combination of a technology idea with an imaginative business model - and a top class team to deliver - that will rule the day.
The author is the Vice President of India Innovation Fund