Monthly Archives: February 2009

TiE Pune Seminar: To sell or not to sell – 24th Feb

TiE LogoWhat: TiE Pune Seminar on whether or not to sell your company, by Girish Godbole, CEO and Founder, CEO ally, Inc.
When: 24th Feb, 6pm
Where: Renu Electronics, Baner Road (Near Lexus Furniture)
Registration and Fees: Free for TiE Members, Rs. 250 for others, mail namita.shibad [at] gmail [dot] com to register.

Details:
To most of us, our companies are our own, forever. We never think of selling them. Why should we sell our own creations? What good can come out of it? But in the West companies are sold off on a regular basis. There must be some benefit from that? Given that we are in the midst of a challenging global recession that most of us will witness only once in our lifetime, does selling out make sense? The events that will unfold in the next few quarters will result in the widespread destruction of value – for companies, investors, management and employees, and will span industry verticals, geographies and sectors.

So would this be the right time to sell your company? How can you best position your company for a potential acquisition? Should you get a strategic investment into your company? Why is mid-market M&A still active? How can you best prepare your company for a strategic exit? The seminar will address these questions and walk you through all steps of a typical M&A deal from the point of view of a small to mid-sized technology company.

This workshop will be by Girish Godbole, Founder and CEO of CEO ally, Inc. (www.ceoally.com), a boutique M&A and business advisory firm based in the U.S. Girish brings hands-on experience as a serial entrepreneur and executive who has built, operated and sold businesses successfully.

The workshop will address the following questions in detail:

  1. Should you sell your company? Why? When?
  2. Why do buyers buy?
  3. How can you best position your company to sell?
  4. What do buyers read into financials?
  5. What is a fair valuation?
  6. How does this all work? Can you do it alone?
  7. How will an acquisition affect your work life?

This seminar is free for TiE members. Non members will be charged Rs250/- payable by cash or cheque at the venue. The event will be held on Tuesday, Feb 24, 2009, 6.00pm, at Renu Electronics, Survey no 2/6 Baner Road, (lane next to Lexus Furniture. It is 250 metres after Hotel Mahabaleshwar going towards Mumbai) Pune 411045. Kindly email Namita at namita.shibad[at]gmail[dot]com to confirm your attendance.

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FREEconomics: The economics of free stuff

GNUnify 09 LogoLast week, SICSR (Symbiosis Institute of Computer Studies and Research) hosted GNUnify, a conference on open source technologies, which attracted hundreds of students and other open source enthusiasts. Shirish has written a couple of posts on his blog about the talks he attended – read those to get a flavor of GNUnify (day 1, day 2). Usually, the presentations and discussions revolve mostly around the technology, but I decided to talk about not the technology, but about the economics of open source in particular, and free stuff in general.

If so much stuff is being given away for free, how is it sustainable? Programmers need to eat, even if they are immersed in the ideology of the free software movement. Businesses who give away free services exist for making money. So it is instructive to follow the money trail and look at who is paying for the free stuff, who is making money and how. As more of the business world is pushed towards free (whether they want to or not), it is important to understand the various fine points of the economics and sustainability of this situation.

I’ve embedded my presentation below. If you are not able to see it, you can download the PDF.

If you can’t see the slideshow above, click here to view it online, or download the PDF

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POCC MVP Startup Roadies: Meet Morpheus Venture Partners in Pune 21st Feb

What: POCC & MVP (Morpheus Venture Partners) bring Startup Roadies program to Pune
When: Saturday, 21st Feb. Book a slot anytime between 10am to 7pm
Where: Symbiosis Institute of Computer Studies and Research, Atur Centre, Model Colony. Map.
Registration and Fees: Send an e-mail to nandini [at] morpheusventure [dot] com with a short (less than 300 words) intro of your startup. Please mention your preferred time slot.

Pune OpenCoffee Club - POCC Logo

About Morpheus Venture Partners

MVP runs a business advisory and mentoring program for startups. MVP currently has portfolio of more than 10 companies. Some of the companies are: Instablogs, Commonfloor, Lifemojo, Fachak, Crederity, Deskaway, Sutra.

Sameer Guglani and Nandini Hirianniah are the founding partners @ MVP. Both of them are serial entrepenuers and started their first venture Madhouse Media in 2004. Madhouse was one of the first organized movie rentals players. They successfully exited the venture with the acquisition by Seventymm in July 2007. More Info

The Startup Roadies Program

We absolutely love to meet passionate entrepreneurs whose ventures are in idea stage (not started, but want to really start) or 1-12 months into the operation. The interaction will be completely informal. Formal dresses are not a must, we want to see you as your natural self, no need to bring any presentations or any financial projections. Just come have a chat with us. Get a demo if possible, get all members of your founding team. Just ensure that you arrive on time as per the allocated slot 😉

The goal of the exercise is to together explore solutions to some of the “tough business problems” you are dealing with. We could do that by offering advice and potential solutions based on our experience. We would also love to introduce you to relevant folks in our network who can add value – potential partners, experienced people in similar domain, potential investors etc.

At our end we are just excited to get an opportunity to meet you and learn from your experience and ideas. Each session will be conducted in the below mentioned structure

Where are we? (Get on the same page, understand the current status of the venture / idea)
  • Team introduction
  • Understanding your idea, market size, the problem your solving, how is your product/service different that current available solutions
  • Figure out the current status of the venture – in development, alpha, beta, launched
  • How much money is available to the team
Where do we want to go? (what are we looking to accomplish in the coming future)
  • Discuss, debate and get clarity on the goals & milestones for
    • Short term: 3 months
    • Medium term: 1 year
    • Long term: 3-5 years
How do we get there? (the most critical part where we together come up with the clear and measurable steps which will be taken to achieve the goals/milestones)
  • Given the current status and various goals, what is the best strategy to get there
  • How to proceed with execution
  • Best way to raise funding
  • Who are the folks to partner with
  • Make a list of action items out of the interaction
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Mozilla for your business: Meet Seth Bindernagel and Arun Ranganathan of Mozilla – Sun, 15 Feb

Mozilla Foundation logo
Image via Wikipedia
  • Firefox
  • Firefox extensions as a business model?
  • Mozilla‘s mobile browser Fennec
  • JQuery and other such libraries – quick visual demos of what is possible
  • HTML5 & XHTML2 and W3C’s WebApps initiative
  • Localization
  • Emerging trends in JavaScript
  • The Bespin Web-based IDE – the google docs for code!
  • Exciting projects in Mozilla Labs

What to get first-hand information on any of these topics? Seth Bindernagel and Arun Ranganathan, Directors with Mozilla are in Pune this weekend, and we felt that Pune’s web-based businesses and web-developers should get a chance to interact with them to get an idea of the latest developments in the various products that Mozilla is involved in. There will be some presentations, and lots of time for Q&A.

What: Breakfast with Mozilla. Meet Arun Ranganathan, Mozilla Tech Evangelist, and Seth Bindernagel, Director of Localization for Mozilla
When: Sunday, 15 Feb, 9am to 1pm
WhereSymbiosis Institute of Computer Studies and Research, Room 707, 7th Floor, Atur Centre, Model Colony. Map.
Registration and Fees: This event is free for all, but seats are limited. You must register at http://breakfast-with-mozilla.eventbrite.com/ (first-come-first-served).

Details:
9am-10am: Breakfast and Conversation
10am-1pm: A freewheeling, roundtable kind of discussion, loosely structured around the following:

  • Introductions of Seth and Arun. What we do, what we’d like to accomplish during our short stay in India, etc.
  • Introduction to the Mozilla Project (10 – 15 mins.). How we work, tools we use, etc. Brief history + discussion of our open source m.o.
  • Localization. *May* be able to demo Fennec, or mobile Firefox.
  • Extensions. Do the entrepeneurial community think extensions are a good model? Arun will also demo Personas. Essentially, discuss http://addons.mozilla.org/ and potential future directions.
  • Discussion about the Open Web. What do we mean by the Open Web? What tools, libraries, are available? Who supports it? What’s lacking? I’ll give demos of:
    • Libraries such as jquery — very brief, visual demonstrations about what can be done with it.
    • The Bespin IDE. It’s an open source project that we believe will alter how people think about web development 🙂 Essentially, discuss what web developers have been clamoring for, and what we’re doing to try and address that.
    • Discussion of video, and open codecs. Discuss 2D and 3D graphics capabilities that are being introduced into the web platform. Why use technologies like Flash? Why NOT use technologies like Flash?
    • What’s coming down the road? What should the platform be capable of? 3.5. Open discussion. What kinds of applications can be created on top of these tools? And, how can entrepreneurs and web developers help craft this direction?
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POCC meeting: What should I create: sole proprietorship, partnership, pvt. ltd., LLP?

Proposed new logo of the Pune OpenCoffee Club by Sahil Khan
Proposed new logo of the Pune OpenCoffee Club by Sahil Khan. Please give your feedback at http://sahilkhan.wordpress.com/2009/01/28/pocc-logo/ (click on the photo)

What: Pune OpenCoffee Club meeting to discuss company formation, registrations, tax planning and other related issues as they pertain to early stage startups.
When: Saturday, 7th February, 4:30pm
Where: Symbiosis Institute of Computer Studies and Research, 7th Floor, Atur Centre, Gokhale Cross Road Model Colony. Map
Registration and Fees: This event is free for all. No registration required.

Details:
There are a number of things about company formation, registrations, taxation, accounting and finanace, which are very confusing to young startups. It is not clear which experts to go to for advice, and the costs vary widely, and the expenses are quite significant for new startups. To tackle these questions and give everyone an overview of this area, the Pune OpenCoffee Club will have a session with three experts who will help us understand these issues and answer our questions.

We have invited the following people:

Jayesh Baheti is a partner at CA firm Baheti & Somani http://bandsindia.com
Prakash Shah, is a partner at a well known CA firm in Pune, started by his father.
Pawan Chandak is a practicing Company Secretary. He also handles corporate legal matters. http://chandakcs.com/proprietor.html

We will try to cover topics like:
1. Differences between sole proprietorship / partnership / pvt. ltd. and the new LLP. Which is appropriate in which circumstances. Licenses, costs, tax implications.
2. Understanding issues a young startup might face like: FBT, STPI registration, depreciation, PF, equity distribution
3. Tax planning, expenses and deduction.

Jayesh will give a presentation giving the basics of the above topics, so that everybody has an overview of the area, then we will have a discussion session where we can get our questions answered by Prakash, Pawan and Jayesh.

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Should you use a file-system or a database

Whether to use a file-system or a database to store the data of your application has been a contentious issue since the 80s. It was something we worried about even when I was doing my Ph.D. in Databases in the 90s. Now Jaspreet Singh, of Pune-based startup Druvaa has weighed in on this issue on Druvaa’s blog. His post is republished here with permission.

This topic has been on my plate for some time now. It’s interesting to see how databases have come a long way and have clearly out-shadowed file-systems for storing structured or unstructured information.

Technically, both of them support the basic features necessary for data access. For example both of them ensure  –

  • Data is managed to ensure its integrity and quality
  • Allow shared access by a community of users
  • Use of well defined schema for data-access
  • Support a query language

But, file-systems seriously lack some of the critical features necessary for managing data. Lets take a look at some of these feature.

Transaction support
Atomic transactions guarantee complete failure or success of an operation. This is especially needed when there is concurrent access to same data-set. This is one of the basic features provided by all databases.

But, most file-systems don’t have this features. Only the lesser known file-systems – Transactional NTFS(TxF), Sun ZFS, Veritas VxFS support this feature. Most of the popular opensource file-systems (including ext3, xfs, reiserfs) are not even POSIX compliant.

Fast Indexing
Databases allow indexing based on any attribute or data-property (i.e. SQL columns). This helps fast retrieval of data, based on the indexed attribute. This functionality is not offered by most file-systems i.e. you can’t quickly access “all files created after 2PM today”.

The desktop search tools like Google desktop or MAC spotlight offer this functionality. But for this, they have to scan and index the complete file-system and store the information in a internal relational-database.

Snapshots
Snapshot is a point-in-time copy/view of the data. Snapshots are needed for backup applications, which need consistent point-in-time copies of data.

The transactional and journaling capabilities enable most of the databases to offer snapshots without shopping access to the data. Most file-systems however, don’t provide this feature (ZFS and VxFS being only exceptions). The backup softwares have to either depend on running application or underlying storage for snapshots.

Clustering
Advanced databases like Oracle (and now MySQL) also offer clustering capabilities. The “g” in “Oracle 11g” actually stands for “grid” or clustering capability. MySQL offers shared-nothing clusters using synchronous replication. This helps the databases scale up and support larger & more-fault tolerant production environments.

File systems still don’t support this option 🙁  The only exceptions are Veritas CFS and GFS (Open Source).

Replication
Replication is commodity with databases and form the basis for disaster-recovery plans. File-systems still have to evolve to handle it.

Relational View of Data
File systems store files and other objects only as a stream of bytes, and have little or no information about the data stored in the files. Such file systems also provide only a single way of organizing the files, namely via directories and file names. The associated attributes are also limited in number e.g. – type, size, author, creation time etc. This does not help in managing related data, as disparate items do not have any relationships defined.

Databases on the other hand offer easy means to relate stored data. It also offers a flexible query language (SQL) to retrieve the data. For example, it is possible to query a database for “contacts of all persons who live in Acapulco and sent emails yesterday”, but impossible in case of a file system.

File-systems need to evolve and provide capabilities to relate different data-sets. This will help the application writers to make use of native file-system capabilities to relate data. A good effort in this direction was Microsoft WinFS.

Conclusion

The only disadvantage with using the databases as primary storage option, seems to be the additional cost associated. But, I see no reason why file-systems in future will borrow features from databases.

Disclosure

Druvaa inSync uses a proprietary file-system to store and index the backed up data. The meta-data for the file-system is stored in an embedded PostgreSQL database. The database driven model was chosen to store additional identifiers withe each block – size, hash and time. This helps the filesystem to –

  1. Divide files into variable sized blocks
  2. Data deduplication – Store single copy of duplicate blocks
  3. Temporal File-system – Store time information with each block. This enables faster time-based restores.
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Are you a misfit in your company?

This article was written for PuneTech readers by Dr. Basant Rajan, who has played various engineering/management/research roles over 18 years in the Indian Software industry. Most recently he was CTO of Symantec India.

This article is primarily targeted at software professionals (in India) and attempts to introduce a few concepts that’ll help you understand your aspirations and your work environment better, so you can make some career choices that could empower you to realize your true potential. If the section below on employee types, does not strike a chord, the rest of this article will likely not either, be forewarned.

Your long term career prospects depends a lot on the expectations of your manager and organization matching your aspirations. Frustration, especially when linked to growth prospects is often a tell tale sign that something’s amiss.

Before we can narrow down on what is amiss and fix it, we need to cover some ground related to what drives these expectations in the first place. Next we’ll revisit frustrations at the work place in the context of what we learned about organizations and employees. We will then go over some simple tests to help classify your manager and organization and finally use the information we’ve gleaned to chart a possible course of action that will let you positively influence your destiny at the work place.

Employee types – cooks & chefs

One typically uses the term talent interchangeably with employee. In the context of the Indian software industry however, we see two distinct kinds of employees – one that brings skills to the work place and another that also bring long some talent.

Think of it more like the difference between a chef and a cook. Given a recipe, both can make a delicacy you’ll relish. But you’d expect the chef to be able to surprise you with something he conjured up. Put another way, they both can cook, but have different limits of capability.

We see both the cook and the chef in the software industry too. There are a large number of knowledge workers, cooks, who armed with programming skills, can deliver on complicated software components to a specified design. Then there are some, chefs, who with their deep understanding of the domain to augment their skills, can architect solutions to problems, small and large.

Note, there is nothing the matter with being either one of them …

Engagement models

There are two main reasons why a company opens an offshore branch in India – to save costs, and/or to augment availability of specialized talent.

Correspondingly, there are predominantly two engagement models in play at off-shored operations – the cost leverage model and the talent leverage model. In reality, a single company can have both these models operating in different parts.

Off-shoring under the cost leverage model (CLM) is undertaken primarily to benefit from the cost differential of skilled labour between the two sites. For example, cheap labour is pretty much what drives the growth of call centers in India. For CLM to succeed, the organization needs to be able to source skilled people who can be relatively easily trained for the specific work at hand, in significant numbers. Process driven work can typically be executed well this way.

The talent leverage model (TLM) on the other hand prioritizes the availability of specialized talent over the cost differential. The parent company is setting up their operation in India because they cannot source the required number of specialists locally. That is not to say that the TLM precludes benefits from the cost differential of the two sites.

Note, there is nothing inherently wrong with either model.

Mismatches and frustration

So much for setting up the necessary context and a common vocabulary. From the discussion so far it should be relatively easy to infer that to succeed, organizations should take care to hire the right mix of cooks and chefs.

The cost leverage model expects skilled executors of strategy (cooks) for success while the talent leverage model also depends on the supply of people who can drive the strategy (chefs). Consequently, the cost leverage model (CLM) tends to attract/need managers who are cooks while the talent leverage model (TLM) tends to attract/need managers who are chefs.

Unfortunately organizations often fail to make a conscious identification of the model they are operating under and often end up recruiting the wrong employee type for a given engagement model resulting in a frustrating work environment for the employee. While exploring why organizations slip up on this front is interesting in itself, let’s move on for now.

If you happen to be a chef and find yourself in (part of) an organization that has embraced the cost leverage model, you are likely to get disillusioned as the novelty of the job wears off. Your aspirations for growth aren’t likely to be satisfied in such an environment. Changing roles/jobs will become necessary for growth.

If you happen to be a cook and find yourself in (part of) an organization that’s operating in the talent leverage model, you aren’t that badly off, especially if you are an individual contributor. No organization can function effectively without the cooks and they are therefore valued. However, organizations operating under talent leverage tend to favour chefs when it comes to promotions.

If you are a chef and your manager happens to be a cook, your work environment is likely to be frustrating. Career growth is very unlikely to happen in such situations unless you can successfully work around your manager. Changing roles/jobs is an option worth considering seriously.

Is your manager a cook or a chef?

Knowing one’s manager is certainly a good thing. But for our purposes, let’s just limit ourselves to classifying one’s manager as a cook or a chef … Exactly how does one go about doing that? Fortunately, external behavior you are bound to notice can help you make an informed decision. Here’s how.

  • Would you consider him a supervisor (cook) or a real manager (chef)?
  • Does/can he exercise his discretion in addressing issues in your environment? (yes- chef)/(no – cook)
  • Does he regularly challenge status quo to effect changes for the better? (yes – chef) / (no – cook)
  • Does he seem to value growth in size (cook) or growth in impact (chef) of his organization?
  • Do you associate him more with your team (chef) or his management (cook)?
  • Can he work with influence (chef) or does he always need authority (cook)?
  • Caution : be sure not to confuse an isolated incident with a behavioral trait

Which engagement model is in play?

Now that we have the manager nicely squared away, let’s focus on the organization. To determine whether the your organization is really interested in the cost leverage model or the talent leverage model, you could simply ask your manager, but on second thoughts, don‘t bother. What management claims and what they really value can be two different things, so one needs to figure this out for oneself, and here’s a simple test to do it.

  • Classify the managers around as either cooks or chefs.
  • Next, check to see which ones are getting more promotions, more power and more visibility.
  • If the cooks have the upper hand and the chefs are running into roadblocks or leaving, you are looking at the cost leverage model in operation. If the reverse is true, then you have an organization that values talent leverage.
  • Again a word of caution : take care to distinguish between isolated incidents and a trend.

Don’t surprised to see significant numbers of successful cooks in an organization that has embraced the talent leverage model. Look a little closer and you’ll see that most positions of influence in such an organization are held by chefs. Remember, that while one can’t have an army without soldiers, to be successful they need to be led in battle by officers of calibre.

Empower and be free…

Hardest for last … now what can that be?

Given that you’ve just finished judging your manager and your organization, now might be a good time to introspect and make an honest assessment of what you bring to the table, just skills or talent as well?

As the road to self realization is still uncharted territory, you’ll have to figure this part out yourself 🙂

Assuming you got back from the wilderness, it’s about time you got down ensuring a sustainable. mutually rewarding, relationship at the work place and signing up to making it happen.

Now that we’ve decided to act, it’s perhaps a good time to arm ourselves with a little prayer (ok, indulge me …, for now, let’s assume there is a God) … and here it is.

The serenity prayer (excerpt) …

God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.

… and the industrial strength version (snippet)

if (type(self, wisdom) == CHEF) { /* you sure?, just kidding ... */
    if (model(self.org, wisdom) == CLM)) { /* in the wrong type of org */
        change_org(courage);
    } else {
        if (type(self.manager, wisdom) == COOK) { /* unfortunate ... */
            wait timeout { /* the organization might correct it */
                manager_might_change(hope);
            } change_role(courage); /* else, you have to do the honours */
        } /* else: lucky you! */
    }
} else { /* you happen to be a cook ... */
    if (model(self.org) == TLM) { /* wrong place for fast growth */
        accept_it(serenity); /* but it ain’t so bad ... */
    } /* else: lucky you! */
}

Note : God has been coded away in the industrial version, so you’ll have to make do with friends and family.

The bad news is that typically, one cannot hope to change the engagement model or one’s nature in short order.

The good news is that given the wide variety of needs and opportunities that exist, finding a work environment that suits your style is not likely to be hard once you know what you are looking for.

Let’s wrap up with a toast to “marriages made in heaven!” (else, just so you know, my wife’s a counselor).

Disclaimer

The views expressed here are solely mine and are not intended to expressly hurt the feelings of any particular minority group or organization.

This disclosure was made under duress brought to bear by Navin Kabra.

Credits

These thoughts have been shaped by a lot many colleagues and for that I am forever grateful.

About the Author – Basant Rajan

Basant Rajan holds a Doctorate in Computer Science from TIFR, Bombay and is currently an independent consultant.

He has 18 years of industry experience, and previous positions held include CTO, Symantec India heading up Symantec Research Lab (India) and Sr. Director, Symantec heading the Storage Foundations group in Pune and has been actively involved in promoting innovation at various levels within the engineering community at Symantec. He also concurrently held a Visiting Member position at TIFR, Bombay for a few years.

With a number of publications and patent applications to his name, Basant’s areas of interest include organizational change, storage technology, distributed systems, formal languages and logic.

He can be reached at basant+web [at] gmail.com.