Event Report: TechSparks Pune 2011

(This is a live-blog of the TechSparks 2011 event in Pune. Since it is being written as the event happens, please excuse the typos, and the general low quality of the writing. Hopefully the quality of the speakers and the content will make up for that.)

Some interesting statistics. The event is at Dewang Mehta Auditorium, and it’s mostly full – which means that there are about 250 people attending. And apparently 2/3rd of them are entrepreneurs. And most of them are first-time entrepreneurs. Less than 1/3rd appear to be developers/techies.

The rest of this article is broken up into sections according to the different talks at this event.

Story of VSS Mani, JustDial

  • “I am a TamBram, so probably there has not been a entrepreneur in my family for 100 generations.”
  • He first started “AskMe” in 1989. Ran out of money in the first two years – too many meetings in 5-star hotels, and too many high-quality, high-salary employees. And since he was the sole breadwinner of his family, he had to go do something else to earn money. So, JustDial really started in 1996.
  • This incarnation of JustDial did not repeat the mistakes of AskMe – so the first office was tiny – 300 sq. ft., and did not move to a bigger place unless absolutely necessary. Rented everything possible, including chairs, tables, computers, and even LAN network cables.
  • Focused on many small customers (instead of a few large customers). And took money in advance. Helped with cash-flow (because there was little VC money in India at that time, and none at all for a new business model.)
  • When the dotcom bust of 2000 happened, most internet based companies collapsed, but JustDial was only minimally affected, because they had been conservative about betting on the internet.
  • Decided to bet big on voice enable local search and marketing around 2002.
  • Met a VC, who told them that he wasn’t interested in their existing business, but would fund them if they converted to a BPO. This convinced them to not pursue VCs any more. This remained true until 2006, at which point a VC approached them, heard their story and signed a term sheet the next day.
  • They finally launched the web-based version in 2007. Lost of internal conflicts about whether to do this – because of the fear that the internet business would cannibalize the voice based business. Interestingly, their internet business grew like a hockey stick, and at the same time the voice-based business continued to grow at the same rate as before.
  • Rode the telecom penetration and internet penetration wave on the way to fantastic growth.
  • It appears that further growth in metros is not possible because the market is already saturated. But, India is not just a metro-based market. JustDial will go to all the small cities.
  • The JustDial WAP site is growing at a tremendous pace.
  • Apps (Android/iPhone/Blackberry) are being launched next month
  • Throughout the journey, there have been naysayers. The second time he re-started JustDial, everyone told him that it was a bad idea to re-start a failed business. When they launched the web-based version, people told them that they were not a tech company, and would fail in this segment. Now the same story is repeating with their app-based business that they’re launching in the US market. (What they’re seeing that “human assisted search” is finding a lot of takers in that market – where talking to actual humans is rare.)
  • JustDial.com has the largest number of reviews and ratings in the world – 2.5 million. The secret sauce? Most people don’t actually go online and give reviews. Most online review sites have paid staff generating “reviews”. JustDial calls their voice customers back for ratings/reviews and then uploads them to their site.
  • It’s difficult to give one-line advice to entrepreneurs. But here’s an attempt: Remember, entrepreneurship is different. It’s not like a regular job. It’s a calling. So don’t do it unless you have it in you. It has to come from inside. Not because someone told you. Or copying someone else. And remember, there will be lots of failures. And learn from them. Don’t do minor, incremental things that copy someone else’s idea. Do something disruptive. Don’t do coupons.

Sanjay and Kailash Katkar, QuickHeal Technologies

  • “We are not seasoned entrepreneurs. We don’t yet feel that we have learnt everything. We are making mistakes everyday. We’ll try our best to tell you what we’ve learnt until now.”
  • Kailash Katkar’s entrepreneurial journey started in 5th standard. Over time did various minor things like screen printing, radio repairing, TV repairing. Was earning Rs. 2000 per month doing this, when he was offered a job for Rs. 400 per month – to repair calculators. He took that job because he wanted to learn the new technology. He was the only person in Pune who could repair calculators. Moved on to repairing other machines, including ledger posting machines. When his boss decided to close that business, he decided to take over that business.
  • In early 1990s he realized that computers were going to replace calculators and ledger posting machines. Decided that he needed to refocus his business on computers. Based on this, convinced his brother, Sanjay, to go for a degree in computers (BCS).
  • While doing computer repairing, he got lots of requests for fixing computers infected by viruses. Got Sanjay to write utilities for this. For example, a utility to kill the Michaleangelo virus. Started selling collection of such utilities to his customers.
  • Clubbing together all these utilities into a single product resulted in the birth of QuickHeal anti-virus software.
  • Convinced Sanjay to not take a regular job, not go to US, but instead, to join him so that they could do something different together.
  • Everybody told them that it was a bad idea to do an anti-virus product business, to go against the MNCs who had products in this space. However, the Katkars never really had that much of focus on the big picture – they only had a passion for helping their existing customers.
  • While studying for his MCS, Sanjay Katkar, in his free time, built the first version of QuickHeal, all by himself. He did not start with the intention of building an anti-virus product. He started playing with viruses and anti-virus utilities just out of interest.
  • They were late entrants in this business. In addition to the big MNCs who were selling anti-viruses in India, there were 7 or 8 Indian companies doing anti-virus products.
  • They earned money from the computer maintenance business and used it to develop the anti-virus product. And the main focus was customer satisfaction. For example, lots of organizations were using Norton Antivirus or McAfee. The software would detect files with virus, and then suggest that the infected files should be deleted. This worked in the US, because there were backups to restore the files from. In India, this never worked, because nobody bothered with backups. Hence, QuickHeal were able to actually win customers by offering versions of anti-virus which would clean existing files.
  • When the software was ready for the market, they found it very difficult to sell it. Because “buying” software was a new concept for Indians. Also, their sales partners were very comfortable selling hardware, but not with selling software. Lots and lots of effort went into educating not just customers, but also sales partners that buying anti-virus software was worth the money.
  • The Katkars were techies, not sales or business people. But their sales partners gave up on selling software, saying it couldn’t be done. So they had to do it themselves. Learn the hard way.
  • Other examples of how QuickHeal’s superior understanding of local customers helped them beat the MNCs: most Indian companies had much lower internet speeds compared to the assumptions that software from US companies made. Hence, QuickHeal, which was customized to the speeds here, was able to give a better customer experience.
  • Find good people who are committed to giving a good customer experience. Then give them a good package. And then educate them about the business. Give good after sales support (that’s how you beat the MNCs).
  • When expanding beyond Pune, they decided not to go to big cities. It is very expensive to develop the market, and you’ll probably not be in a position to make a splash. Better go to small towns where you’ll be noticed more easily. So they went to Baroda first, and then Surat, and other such places before finally going to Ahmedabad – where it was easier for them to get channel partners because they had already been noticed in the other, smaller cities in Gujarat. Today Ahmedabad is of course a bigger market than the other cities, but they couldn’t have tackled Ahmedabad without having taken the smaller cities.
  • If you are going to start a tech startup, you must have two strong pillars in your company – a very strong technology/engineering team, and a very strong marketing/business team. The other departments (finance, HR, etc) are support. But don’t start a company without having these two departments. If you’re a typical Pune entrepreneur, you’re probably a techie. Go find co-founders from the marketing/business side so that side is also strong.

There was an introductory talk about Cloud Computing at this point. Skipping it because it was too basic. Please check back around 5:30pm for the next update from the panel discussion.)

Panel Discussion – Go to Market for Startups

The panelists are:

  • Probir Roy, founder of Paymate
  • Sachin Kelkar, Head of Intel Software Partner Program
  • Shailesh Lakhani, from Sequoia Capital
  • Kris Nair, Partner, Opdrage Venture Partners
  • VSS Mani, Founder of JustDial

There where various questions and answers – I’ve tried to capture some of the more interesting quotes:

  • (Shailesh) It should not be easy to raise money. Lots of people who ask for money don’t deserve it. At early stages, people invest based on the people and not on the idea, because the idea isn’t really worth anything. And that’s the job of angel investors. Angels are slowly increasing in India.
  • (Mani) Focus on doing the best with you already have. Focus on existing customers and keep them happy. Don’t focus on what you could do if you had money. Forget the fancy stuff. Align the interests of your early employees with the interests of the company. So they should see that if the company does well, they do well.
  • (Mani) Don’t wait for a miracle to happen. Don’t wait for an angel to appear. Just focus on ensuring that your tomorrow is better than today. Focus on a small, core set of customers, and keep them happy. They will become your evangelists, they’ll get you more customers, and they’ll help you get investors.
  • (Shailesh) In deciding whether to invest in a company, we look at the size of the potential market, and a good (strong, intelligent, thoughtful) team.
  • (Probir) Entrepreneurs look for new business models. MBAs help administrate existing business models. Know the difference!
  • (Probir) Chances of you getting VC funding in India are low. So keep looking for alternative funding models.
  • (Mani) Timing is very important. We had a brilliant idea (JustDial) in 1989, and even had money. But it failed because it was way before its time. Analyze carefully whether your idea is before its time.
  • Brilliant question from audience. An entrepreneur (from SpotMyGadget) just got up and asked this question (without waiting for permission of the moderator): “How shameless should an entrepreneur be when approaching clients/etc?” Answer, from Mani was – as shameless as possible. But remember to deliver a good/relevant product in the end.

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