Before I put some thoughts across here are some facts to be pondered over:

1. The size of most modern venture capital funds has increased, with the average sized fund having over $160 million under management
2. The cost of starting up a technology business is 1/10 - 1/20th of what it was 10 years ago
3. Thanks to the economy, the IPO market has dried up — Hence, fewer $100m+ exits on the wall street. Compare this to over 500 technology IPOs between 1997-2004
4. Limited Partners’ safe assets in real estate, bonds, equities are down 30% on an average.
5. Small funds and angels are syndicating deals to “size up” a round. For example, Santa Cruz based UserVoice announced Series A with 7 investors in the syndicate viz. Dave McClure, Baseline Ventures, Betaworks, David Shen Ventures, Accelerator Group, Vincent Worms and Howard Lindzon
6. The amount of money a company needs to raise before getting to liquidity is about $10M, compared to $50 million during the dot-come era 10 years ago, and $20M in 1990-1997
7. In last 5 years, a number of small funds averaging $25 million have cropped up. These funds are run by successful entrepreneurs and executives who would rather be investing their own “angel money” under normal circumstances. In the same breath, “small” funds and “angels” have become very active in early stage deals

Very few traditional VCs longer invest in companies which are looking for $250K as their capital requirement to go to market. More often than not, it is because of the capital inefficiency than lack of interest. If you have $150m fund and if you invest on an average of around $3m for the life span of the company, the fund is looking for 50 deals which become unmanageable.

Traditional VC funds have an exit horizon of 5-7 years in form of an IPO or a sale to another provider. Now, that funding requirements have decreased and IPO market does not exists.

Does it make sense to have an exit horizon of 3-4 years and have an exit at $10-$20 million instead of the mythical $100m/6-7 year target?

As an entrepreneur if I had a choice, I would take “smart capital” which brings me capital, connections and the investors sit along side with me to build my business and not someone who gives me money and does status checks every month.

I have tried to be accurate with my research, but the slides may have factual errors.

The website at www.bangaloretelecom.com contains elements from the site gumblar.cn, which appears to host malware

I loaded the site in FireFox. Here is the screen shot of FireBug which confirms that gumblar.cn is indeed sending an exploit to visitors.

I’m still researching what gumblar.cn exploit is and what payload it carries. 

Update: 1. The payload sits silently and then sends a payload containing a PDF, and several other mime-types which could launch a windows application with a security hole and then look for stored passwords and other sensitive information. I am not aware whether it compromises data on the server as well.

2. Also, if you reload the same page, you may not see the script the second time (probably it does something through the PHP session)

Yup. That’s the soundbyte I picked up from a real person around 2 weeks back. Nothing wrong with soliciting money, but the missing piece is the product and entrepreneur capability. The money is given on the basis of both. I talked to the entrepreneur for a few minutes and the discussion was around raising capital. He didn’t wanna disclose his idea right off the bat — Whereas, I was more interested in knowing about his product; by the time we reached around the latter, I lost interest — I don’t even remember the whole discussion any more. 

The entrepreneur was looking for funding — maybe he has the “chops”, has defendable IP … only if he opened with something like this:

Entrepreneur: “I have this great technology about video streaming. Do you think there is a market for a video server on a mobile device?” 

And then he could have said, can I show you a demo? Who do you think would be interested in buying a product like this, etc. etc.

When I was pitching for my startup to the Silicon Valley VCs — Fortunately/Unforutantely I had no guts to ask for money. As an engineer you always think, “let milestones A, B, C be met then you would risk the lives of others.” (I have a separate theory on that philosophy, and how it backfired in my case, more on that later). I was pitching to a Tier I VC and I got solid feedback on the product as the guy was able to poke several holes in my plan, assumptions, etc. etc. I came out dejected after the meeting but the next iteration of the product was even better!

Bottomline, look from an investor’s perspective — They see too many people coming in looking for money, few people come for feedback. Just because they’re investors (or people with money) don’t assume that they have no clue about your business — keep in mind they see 100s of plans every week. 

So, if you are an early stage startup Solicit feedback. Look for recommendations from the investor, find out what he thinks (he’ll drop several names of the companies which you may not heard and they maybe competing with you). 

The best part of soliciting feedback is that the loop never closes! I know this first-hand, when you are looking for money and the investor says “Pass”. There is little chance that there’ll be additional conversation, however, if the investor gave you some feedback, you can always ask him for further details, referals, etc. 

Keep the dating game in mind. Find out about the hobbies first, see what she quipped on your hobbies and then ask out for a coffee.

(The title of this post is borrowed from here)

A very simple example of this collection of micro-content is a blog post with comments. A blog post is the main content or leading content in that page identified by the permalink of the post. This blog post may have any number of comments. A comment may be within the context of the post but it is also an identifiable unit of content.

For a search engine it becomes a problem ‘coz it indexes the various micro-content as a large single unit which may eliminate the content identity altogether or reduce the context of the permalink where this content was present. In the above figure, a search engine sees it as a webpage with a distinct URL while a human sees it as a blog post with comments in it. A human can easily identify the comment boundary but a search engine cannot. I feel that some search engines may also totally ignore the comments and prevent them from being indexed. Good so far, if you think that the comments are not worthy of getting indexed by a universal search engine.

Let’s take a vertical search for example, a comment search (like a Backtype), you’ll notice that BackType indexes comment from only a limited number of Blog platforms. why? Simple. It is immensely hard to figure out the comment boundaries with 100% accuracy. It’s easy if there is a feed of structured comment data, but not all platforms provide that. 

Going beyond comments, a page composed of content, a simple FAQ page. Each FAQ is a micro-content in itself within the context of the thing around which the FAQ exists. The mixing of FAQ from say, installation, upgrade muddies the waters of the FAQ around licensing. Ditto for a threaded forum or a Bulletin Board. 

Today, in larger case of social media it gets even more muddier — A social page contains content remixed from various sources. What is what? where is the boundary? What is a tweet vs. what is a comment on the photo? A human eye can tell but the machine needs a byte of semantic meta-data too. I’m thinking of a simple solution — currently, rejigging in my brain — will post it after the research is complete.

After the talk — I was thinking, why not have an event (not necessarily a Barcamp but a forum to exchange/share) like this every week (or topically spread every month) where technologists, innovators & think-tanks get an opportunity to connect & learn from each other’s experience. Barcamps happen twice a year and people may/may not get a chance to present/meet on every aspect. It got me thinking where is the monthly meeting on MySQL, LAMP, Java, Search, Semantic, Windows, Linux, Marketing, Advertising, Sales strategies, Security, Google Hackers, Facebook hackers, Phreaks, Gaming, etc. etc.  

The most interesting part today in Bangalore is that there is WAAY too much focus on startups, fund-raising, and entrepreneurship and less on learning the fundamental ropes of getting things done. With events like Proto.in, Headstart, TiE, etc. successfully connecting entrepreneurs — there is a DEEP need of taking a step back and having local versions of SDForum, SVASE, or Meetups on various topics on marketing, sales, technology, engineering & operations. 

There is little being done to create a forum for technologies and their innovators to come together and discuss. 

Where do you go to share your gyaan if you are MySQL guru? Where do you go and learn and share the practices of High performance Java programming? Why it ain’t there? Why are we avoiding them? Why the focus is just on the business aspects of startup? 

There were some sparks of things happening in the mobile space with Mobile Mondays, but it also looks dormant now (the last event was in January and it is called Mobile Monday for god’s sake!). There was some activity with HeadStart 2009 when it co-hosted the entrepreneurship event with ACM — but again once/twice in 6 months. There is OpenCoffeeClub, TiE — again business level or “how do I get the startup funded” level discussions mostly.

Taking a cue from Silicon Valley — if you look at the weekly dose of events the mix is even — high dose of high octane technology discussions and other events sprinkling demos, startup showcase, etc. etc. But here, we are only worried about the latter.

Bharat Matrimony

Bharat Matrimony (BM) has launched its facial search feature that enables you to upload celebrity (you can also upload your ex-girlfriend’s pics) pictures and BM will find a look-alike. Check it out here

Though the technology is imperfect the idea is so perfect on so many levels:

1. Viral nature
2. Engagement of users
3. Stickiness of the site
4. Differentiator from other sites
5. Users having fun, part of so many jokes

It totally rocks and its great to see an Indian company leading its way in innovation. On the other hand its disappointing to see so less buzz created by them in the Startup media.

AdaptiveAds

Glam Snaps Up AdaptiveAds. Mumbai based startup AdaptiveAds was acquired by Glam, a leading ad network based in US. This news was covered very well by Techcrunch and and other leading tech blogs of US about a month back, but again coverage in Indian Startup media left a lot wanted.

Adaptiveads, a mumbai based startup, clearly demonstrated that an Indian startup can target the global market very well and it makes a lot of sense for other Indian Companies to tap into borderless economy. When we can serve millions of western companies by being an outsourcing hub, by developing the core technology for them, why cant we guys put together our collectible brains to bring Indian products to whole world.

Startup Media

The current Startup Media in India consists of the leading startup blogs, some newspaper / magazine columns, couple of dedicated magazines and little bit of TV coverage. The main credit for creating the “Startup Media” goes out to the leading startup blogs, they have been at it for few years now and have done quite a good job of covering the news, sharing good practices, aggregating discussions around startups. They have built a strong and sticky community of readers / contributors around them.

Shout ‘em out louder

Though a lot has been done, there is a need to increase and provide regular coverage “towards celebrating / highlighting / sharing the Indian startup ecosystem triumphs”. This post is a request to Startup media to shout louder about the successes. Indian ecosystem is evolving and it definitely requires much needed boosts from media to encourage them. There are quite a few successful Indian startups, may not be to the tune of 10-100 million USD, but still doing pretty good. But, every mention will only encourage and boost the morale of the others to push the bar & succeed!

Some suggestions to the Indian Startup Media:

• Add regular weekly features that bring out startup success stories, backed by research. Bring out the reasons for the success and help others learn and get inspired. This can also be done with some guest writers contributing.
• Missed out on covering the news in time? - not a problem - write enough juice and they’ll quote you on their blog!
• Dig into the development of the startups you have already covered, ask them to keep you updated, monitor their blog feeds for news of successes - followup stories is always a welcome for a reader!
• A lot can happen over coffee - spend more time with startup founders (new & old), listen to their stories - can make for a good copy!

Communication channels are the most important for development of any eco-system (Even Hitler banked on it) - you have the power to influence and help startups imbibe good practices - make the most of it! This will go a long way to also help dispel India’s image “as only copycats, service-based companies and outsourcing hub”.  It will encourage the ones who are on the edge and are evaluating doing a startup. Current and potential investors will see the successes and increase the financial participation towards Indian startups.

The day is not far when people will be bringing Garam chai and Samosas to your home (riff from people bringing donuts/coffee to Arrington to get covered) . While you make them the stars, they will make you the celebrity!

(This was originaly on Sameer’s blog) 

Why the entrepreneurs are not thinking $100m products? There are a few possible reasons:

1. Indian entrepreneurship is in infancy (or Phase I, Round 0, whatever you may call it). Entrepreneurs are still learning the ropes
2. Service/ITeS (IT Enabled Service background) has played a major role in developing the IT sector. Wherein the late 90s/early 2000s the rush was for service companies for US clients, now it is the rush for service companies for domestic market
3. Exodus of talent. In last 15 years, a good amount of Indian talent has migrated to US and created world-class companies. Compared to the west the experienced individuals who support the ecosystem are not here anymore
4. Low-beta scale of Risk. The comfort factor provided by large corporations in IT sector have introduced a low-beta in our risk appetite. Take it easy and play it safe attitude promotes safer bets (which actually fail to provide a large multiplier in the return)
5. Lack of demand. The demand creation process is very much dependent on western media. Both the new and traditional media like to talk about products coming out of the west. Cars rolling out of factories from Germany being talked about in local newspapers vs. how many times they have profiled what goes into the mind of a customer driving a Reva. If I don’t even know that I have a problem how would I ask for a solution.

Keeping technology aside, even core areas lack the glitz of new products (more on the non-technology sector, later).

Their online site sucks. Their web property is maintained by people who still think they are in 1998.

The reason the former public sector unit exist is because private companies do not have money nor the will power to serve the 27,600,000 villages in India. Much to the chagrin BSNL has a formidable presence in rural India, thanks to the telecom revolution of 80s. At least, this PSU should exit from the urban towns and play it’s monopoly in the rural India. But, wait in few years, the private sector is going to kill their business even there (goodness!).

I’m angry and so full of it right now!!!

BSNL does not respect it’s customers and nor do I respect them. Have spent 10-15 hours in the last week chasing them, have called almost twice everyday, filed 4 line/technical complaints, have reported it to the nodal officer (wf, he does?) went to the local exchange, called the lineman. etc. etc. I sometimes felt that if I die screaming on the customer rep. at least they would award some compensation. (The biggest discovery was that the one customer rep. attends multiple calls at the same time, this is efficient said the rep. brashly, when he was playing the game of hold/unhold)

I ordered WiMax from Tata Indicom a few days ago — if all goes well, I’ll stand on my terrace and say FU to BSNL and if energies permit, take them to court to recover this months charges. Companies like this continue to exist even after 60 years of Independence because of our ‘chalta-hai’ attitude. I may sound litigative, but there is no way to fix it.

Should have gotten WiMax long time ago, not sure why I thought highspeed Internet = wireline.

(This post is composed on a 56K dialup, which unfortunately is provided by BSNL. What an irony!)