Monday, March 12, 2012

DOTCOM BOOM.20


At 16, most boys have attractive girls on their mind. Not Pallav Nadhani. Back in 2001, this teen was busy figuring how to make computer charts more attractive. Microsoft Excel, which he had been using for school projects, was boring and dull. Nadhani, who had developed an interest in coding since his father bought him his first computer when he was eight, wrote an application that enabled animation and interactivity in charts. He put this application up on a website that allowed people to download and use it. Soon developers doing web applications started offering him money to add features to his charts. This got him some pocket money, but it also made him realise that he could make much more by converting his charts into products that anyone could buy.
In 2002, he turned his idea into a company, running it initially out of his parents’ home in Bangur Avenue in north Kolkata. Today, ten years later, his firm Fusion-Charts offers some of the most delightful charts you would have seen, and boasts of a customer list that’s a veritable international who’s who —Google, HP, Dell, NASA, Intel, Microsoft, Facebook, IBM, Disney, GE, Coca-Cola, Procter & Gamble, Vodafone, FedEx. A total of some 19,000 customers, and 400,000 users across over 110 countries.
Pallav’s FusionCharts represents a mushrooming new breed of innovative technology companies who seem to have kickstarted the Indian startup scene almost a decade after the Indian dotcom bubble burst. Investors have crowded back into the start-up scene, and the flood of money is encouraging would-be entrepreneurs to ditch comfy careers for new ventures. According to Venture Intelligence, venture capital investment in India has gone up from $658 million in 2010 to $1.11 billion in 2011.
Most of these new enterprises have emerged out of the womb of India’s astoundingly successful software services business. In traditional software services, people just did what the customer told them. The new breed constitutes folks who think creatively, develop novel and better solutions for problems, and often sell them as packaged products to customers.
Not everybody starts as young as Pallav. In fact, most don’t. The majority are professionals who have spent years in the services business, and who have used that experience to try something more innovative.
It’s still not an easy task. Manav Garg’s firm Eka Software sells products to the world’s biggest commodity trading companies. His biggest challenge initially was to convince customers that an Indian company is capable of doing a software product. “They asked, ‘What’s the guarantee that I buy your product and the company will not wind up and not support my business.’ So we had to say, ‘ok, you try this software for free for some time, go through a full evaluation process.’ It took time.” That’s the story with many of those who started early last decade. But the success of the early starters has now eased the effort that newer ones have to put in.
CLOUD EASES PAINS
It’s cheaper than ever to throw ideas in the air to see what takes off. Thanks to cloud computing and open source software, setting up a startup has become easier. One aspect of cloud computing is that it obviates the need for companies to invest in IT infrastructure and applications, a costly proposition particularly for startups. All they need to do now is use a broadband line to ‘rent’ infrastructure and applications from what are called cloud providers, and pay a small fee for the period that they use these resources. And the renting can happen almost instantaneously.
Numerous startups today use the cloud. Greytip, which offers HR and payroll software solutions, has used it effectively, as has Vserv, which has an advertising network for mobile devices, and Hotelogix, a web-based hotel management system used by several hotels around the world.
RedBus, the online bus ticket provider that was recently ranked by the international publication Fast Company as amongst the 50 most innovative companies in the world (along with Apple, Facebook and Google), moved from in-house IT infrastructure to the cloud and saw record bus ticket bookings during the December peak season. Earlier, restricted by its own computing resources, the website used to crash when loads increased in the peak season. “Now we simply rent the extra resources during the peak season, and give it back when the season is over,” says founder Phanindra Sama.
The cloud also serves startups in another extraordinary way. Anybody who develops a software product only has to put it on the cloud, and people anywhere in the world with a broadband line can use it, in much the same way that we access our personal email service.
“Earlier, even if you had a good product, you needed a strong sales team around the world to sell it,” says Sharad Sharma, the former head of Yahoo India’s R&D wing and currently chairperson of IT industry body Nasscom’s Product Forum. “Today, it doesn’t matter whether you are in Kolkata or California. You can sell to the world. Given that small businesses in the western world are comfortable buying software on the web, it’s a massive market that Indian startups have.”
He notes that companies like Zoho, Druva and FusionCharts have benefited enormously from the cloud. Zoho, founded by Sridhar Vembu and Shailesh Kumar, provides cloud versions of business and productivity applications, such as word processor and spreadsheet (competing with Google and Microsoft) and has over 5 million users. Sharma expects the company to touch a $1-billion valuation by next year. Druva, founded by Jaspreet Singh, allows laptop users to backup their data on a regular basis to the enterprise data centre so that there’s never any fear of data loss on account of the laptop crashing or being stolen.
Pallav Nadhani says that till recently, the company had not even gone for as much as an exhibition on foreign soil. “We do all our selling over the web and phone, with a small team of 60 people,” he says.
USING SOCIAL MEDIA
Paras Chopra and Sparsh Gupta, who started a company called Wingify in Delhi three years ago, soon after they left college, have spent almost nothing on marketing. They provide a technology — which competes with a similar offering from Google — that allows companies to understand what colours, layout, links etc work best for their website. It is used by over 7,500 customers, including Microsoft, Groupon and WWF. Chopra uses blogs and writes guest posts on popular websites about testing and website optimisation to attract attention to their offering. One international reviewer had this to say about Wingify’s product: “It does it (website optimisation) so disruptively, embarrassingly better than Google does, that it puts a smile on my face.”
Yusuf Motiwala, who in 2007 founded TringMe, a Skype-like voice over internet service, operates out of a small house in Bangalore and spent just a few lakh of rupees to start the company. Today it has over 15 million users in over 80 countries, handles more than 54 million calls every month and is profitable. Unlike Skype, TringMe does not require any software installation (you can talk straight from any website into which it is integrated) and its call tariffs are a fraction of Skype’s. “Our customer numbers have grown by 400 per cent in the last 12 months,” says Motiwala.
GROWING RECOGNITION
The world is beginning to recognise India’s technology innovation potential. In the last few months, two Bangalore-based startups have received international funding of a level unheard of till now. In September, Japanese mobile company SoftBank invested $200 million (about Rs 1,000 crore) in InMobi, valuing it at over $800 million as per some estimates. InMobi, founded in 2007 by Naveen Tewari, 34, an IIT-Kanpur alumnus, together with three other IIT alumni, has technology that allows firms to create advertisements for mobile devices, and then push those ads to the right people at the right time. This ad network is second only to Google’s AdMob, and some 250 of the Fortune 1000 companies, including Citibank, Ford, Coca-Cola, Disney, Intel and Dell use InMobi.
In December, Mu Sigma, an analytics company founded by Dhiraj Rajaram in 2004, received $108 million (Rs 570 crore) in funding from a consortium led by private equity firm General Atlantic.
The vast majority of India’s technology innovations do not touch us as consumers, rather they serve a variety of enterprise applications, a result of India’s software industry’s legacy of catering to enterprises because of not having a big enough domestic consumer software market. Hence the innovations are often not very visible to us as is, say, Google’s or Microsoft’s consumer offerings. This recently prompted Nirmalya Kumar and Phanish Puranam, professors in the London Business School, to describe the phenomenon as ‘India Inside’ — India’s innovations are inside of many things that the world does today.
Sharad Sharma says the telecom revolution of the 1990s and the early 2000s enabled Indian IT services firms to serve the world’s 2,000 biggest companies. “The cloud and startup revolution will enable us to serve 500,000.”
(SUJIT JOHN TOICRST110225)

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