Tuesday, November 25, 2014

Indian start-up scene abuzz with deals

Ever since Flipkart raised its billion dollars in July, the Indian start-up ecosystem has seen a positive fallout in terms of being able to raise massive investments from foreign as well as domestic funds.
Over 100-odd start-ups have since raised funds ranging from a few million dollars to over $100 million.

Companies such as Snapdeal and Housing.com among a few others, which were struggling to even pay salaries, have managed to ride on the investors’ sudden interest in the Indian start-up ecosystem. 
In the last one week alone, there have been two deals, with Zomato raising $70 million and Housing.com raising a similar amount from SoftBank.

According to advisory and accounting firm Grant Thornton, the amount of private equity investment that came into the system increased to $2,726 million in 2014 from $725 million in 2013.

Business model
The spate of investments has, however, raised several questions on the business model and sustainability of these start-ups, especially since the dot-com bubble burst in the early 2000s.

For example, it took seven years for Flipkart to generate revenues worth Rs. 3,000 crore and it is yet to turn profitable. Investors and e-commerce evangelists say that in order to avoid a repeat, fund managers are being extra cautious and investing not in ideas but in companies with the right talent. “There is always a risk and a few will fail. It is ok to fail and that is quite normal. There is a frenzy but we can’t call it a bubble. Also it is difficult to measure valuations as they are subjective. In the coming months, as the market is going to get more competitive, investors will start chasing just a few deals,” said angel investor and a serial entrepreneur Sanjay Mehta.

Experts feel that the key differentiation between then and now is that in late 1990s entrepreneurs didn’t have anyone to guide them whereas now investors have got enough expertise to handhold entrepreneurs who want to scale up their business.

Several foreign private equity investors such as Rocket Internet, Tiger Global, DST and SoftBank are not only putting money on the table but are also closely guiding and helping them grow. “They are not only investing in what the companies are doing today but also for what they will become tomorrow,” Mehta added.

High valuation

The hope of doing well in the future has resulted in giving some of the start-ups high valuations despite being non-profitable now. Flipkart and Snapdeal are being valued at around $6-7 billion as they bet on future growth.  “These massive volumes make the valuations look reasonable, thus there is no bubble effect,” said Rehan Yar Khan, founder, Orios Venture Partners.
Orios has investments in several tech start-ups, including Zivame, which focuses on a single category, lingerie.

According to Mehul Jobanputra, founder of a price comparison and review site Desidime.com, “There are only few start-ups in India that have seen some really high valuation, not all start-ups can pull that kind of number.

“By and large Indian start-ups have never seen crazy valuations like their Silicon Valley counterparts. Indians are much more conservative.”

Top deals

  • July:   Flipkart-Morgan Stanley DST Global - $1,000 million
  • August:  FoodPanda-CDC
    - $60 million
  • September: Commonfloor-Tiger Global - $32 million
  • September: Quikr-Tiger Global - $60 million 
  • October: Snapdeal-Softbank - $627 million
  • October: Olacabs-Softbank - $210 million
  • November: Housing.com-Softbank - $100 million
  • Thursday, November 20, 2014

    Zomato raises $60 million at a post money valuation of $660 million


    Zomato, the online restaurant search and discovery service from India that has gone on to achieve global success today announced that it has closed a fresh round of funding of USD 60 million at a post-money valuation of USD ~660 million. These funds will be used to accelerate Zomato’s global expansion and new product development. This round of funding is being led jointly by Info Edge (India) Limited and Vy Capital, with participation from Sequoia Capital. This takes Zomato’s total funding to over USD 113 million. Zomato has earlier raised USD 53 million from Info Edge (India) Limited and Sequoia Capital over multiple rounds of funding

    Co-founded by Deepinder Goyal and Pankaj Chaddah bac in 2008 as FoodieBay, the company rebranded to Zomato and has come a long way now. At this point, Zomato provides up-to-date detailed information, menus and photos for over 300,000 restaurants across the 18 countries.

    Zomato has already acquired companies in New Zealand, Czech Republic, Slovakia and Poland to increase its presence quickly. The company takes a content-focused approach to restaurant search, believing that menus, pictures and maps are as important as reviews when it comes to a customer deciding where to eat. Apart from the site, Zomato has big mobile push and for which it has well designed applications. Zomato’s mobile focus is also accompanied by the recently launched Zomato for Business application – an app built exclusively to help restaurant owners engage and attract more customers to their business.
    Some quick facts about Zomato’s scale:
    • Zomato employs over 900 people across 100+ cities in 18 countries.
    • Available on web and mobile, Zomato provides detailed restaurant information such as menus, contact details, pictures, geocoded maps, and user reviews, for ~300,000 restaurants.
    • Zomato sees over 30 million visits across its web and mobile platforms every month. More than half of Zomato’s traffic is seen on its mobile apps.
    • Zomato claims a 300% growth in revenue compared to last year.
    • Zomato has acquired 4 companies in the recent past. Over the next year, Zomato plans to expand to 14 more countries across Europe, Southeast Asia, Australia, and the Americas.
    • Zomato recently rebranded
    Deepinder Goyal, Founder and CEO of Zomato, said
    From just restaurant discovery and menus, Zomato has now become a vast global community driven by social interactions. This is an exciting point in our journey, as we accelerate our way across the globe, and build a product that will continue to redefine the way people dine.
    Sanjeev Bikhchandani, Founder of Info Edge, said, “Our first investment in Zomato was made almost 4 years ago, and the team has shown phenomenal progress since then to build the Zomato that we know and use. The company is growing very fast, and we are proud to back them up to further grow the business – both inside and outside of India.”

    The unstoppable walk of an Indian woman, inspiration and Kiran Mazumdar Shaw


      


    I remember my mother telling me, grow up to become as graceful, self reliant and successful like Kiran Mazumdar Shaw. For my mother, me and millions out there in India, Kiran is a role model in true sense. She has created a place for herself in an industry which was not known to have women leaders. What she had was sheer will, a spirit of daring and a dream to make a difference. And, she has done it all.
    I lapped up the chance to meet her at her office recently, and what followed was a heartfelt conversation with a lady who impresses so much more in person. She is jovial, fun and purposeful all rolled into one.
    Please read this interview and find your own meanings as I found mine. This is the first part of our conversation (it went on for more than an hour) and I will come out with more nuggets of wisdom from her shortly.

    Kiran Mazumdar Shaw with her mother
    Kiran Mazumdar Shaw with her mother

    YS:  You’ve accomplished so much on your own. At this stage of your life, would you say there is a sense of completeness or is there still a sense of, you know, anxiety and hunger that a lot remains to be done? What is that sense that you have right now in life?
    Kiran: No entrepreneur feels that they have come to the end of the road. I think an entrepreneur’s life is always a continuous journey. And, it’s really about milestones, rather than, you know, having a final destination. And I think as an entrepreneur we know that. We set off on a path not knowing where it will lead us.And therefore, we realise it’s a voyage of discovery. This voyage of discovery is a very exciting voyage, because it takes us to unknown destinations and makes new paths for us. So, that’s the journey of all us entrepreneurs.
    I think I’m no different. I started of my entrepreneurial journey quite by chance. In 1978, when I found that I could not pursue my dream of becoming a brew master and managing a brewery, I said okay then, what else can I do, and then I accidentally started this business. I said okay, its biotech, biotech is definitely linked to brewing, this is an exciting area. I do not know anything about starting a business, because I’ve never run a business. But it’s a voyage of discovery. Let me discover what this business journey is all about.
    K M Shaw at work in Biocon
    Kiran at work in Biocon

    That’s how I took the plunge. I started with making industrial enzymes, and a lot of those enzymes were actually designed for brewing. I was quite familiar with that piece. That’s what gave me my raison d’etre  and this sense that I am still connected with brewing. So, my business also has a connection with the area, which I am very familiar with. I think most entrepreneurs will start a business they feel they have some familiarity with, some understanding, because I don’t think entrepreneurs start a business without having a clue of what they’re doing. I think it is extremely important that entrepreneurs have a deep-rooted interest in what they are doing, and should have a good understanding of what they are building. I was very excited to do something that was path breaking. It was a pioneering industry, and I was a pioneer because I had nobody to follow (laughs). I had none to show me the way. Or, tell me what to do with this business.
    YS: Today you are showing the way to so many. I remember in my college days we were told about you and how we should take your example and do something meaningful with our lives.
    Kiran: Looking back, I feel, yes, it was very courageous in a way because I had no idea what I was getting into. I feel entrepreneurs are also, you know, people with guts, people who take risks, people who do not want everything laid out for them. You’re willing to struggle, you’re willing to take up a challenge, but it’s with a sense of purpose; my sense of purpose that time was to prove myself as a manager. People told me,  no we can’t give you a job as a brewer, you’re a woman. I was very determined to show that a woman can manage a business. Any business.

    At work

    That was my sense of challenge, and my sense of purpose was about developing these enzymes and building a business out of biotechnology. You have to have a spirit of challenge as an entrepreneur. Something should drive you. So whether it’s a Flipkart, a Biocon or an Infosys,
    something has to drive you, that has to give you a sense of purpose and a spirit of challenge.
    My spirit of challenge was that nobody had thought of building a business based on biotech. I am going to show this is possible. I am going to show that women can run businesses and can manage businesses. And my sense of purpose was, ‘Oh! this sounds fascinating. You know, it was about greening businesses. That was a very new concept. Saying how do we replace chemical technologies with enzyme technologies, and green the world. And that was my sense of purpose when I started.
    It’s like when Infosys started. They had the sense of purpose which was really about starting a software services company. And they had the Y2K challenge. They said no let’s show that we techies, we first generation entrepreneurs, can actually create a business out of this. Everyone has a sense of purpose, a spirit of challenge. And as you start building your business, obviously it’s a voyage of discovery, you basically learn how to deal with the problems, you learn how to solve problems, you learn how to deal with business issues, with regulatory issues, all these things are very alien to you when you get into building a business. Then you realize there is a formal process. It is not just doing something in an ad hoc way. There is a rationale to what you have to do. There is a strategy to what you do and so you slowly, sort of, learn on the job.

    Foundation stone ceremony for Biocon
    Foundation stone ceremony for Biocon

    YS: Did you always know that you wanted to make something large, something big?
    Kiran: Well, in the beginning you don’t think about those things, some people do, but I didn’t. My job was just to be successful in what I was doing. I had no business background. A lot of people come with a business background, so their understanding of rolling and managing and establishing a business is very different from someone like me, who was an absolute novice. I had no business background, no business experience and I had never worked for a company where I had learnt business processes or had an understanding of what business processes are about. So, I literally reinvented the wheel, I had to basically create my own learnings. I had to learn on the jobs so to speak.
    YS: Did you feel lonely?
    Kiran: No, I didn’t. Because when you have the spirit of challenge you never feel lonely. You’re young, you know you have a lot of spirit in you, you want to get things done, and you’re willing to roll up your sleeves. I was willing to do anything, I was fearless. When I started my company, I didn’t have that kind of money, so I would travel the length and breadth of India in a train or on a bus. I couldn’t afford a plane ticket. I would go to all kinds of places using the most frugal ways to travel. I remember my parents would get worried: ‘you’re a single girl, you’re going on your own to all parts of India, to factories etc.’ Those were very difficult times in Punjab with the Akali Dal etc. And yet I used to go on my own. I used to jump into a bus. Most of my travel used to take me to the north those days as a lot of business opportunities were there. I didn’t care, I was on a purpose and hence fearless. Very often in those buses, I would be the only woman. There would be all these guys staring at me, but the bus driver would be very concerned about me and he would say, ‘Aap kahan ja rahi hai madam?’ and I would say, ‘Mujhe woh Jagatjit industry pahunchaneka hai,’ and that poor chap would stop the bus in front of the gate and say, you get down here. I did not have money and it was fun to slog it out.

    Kiran with her family
    Kiran with her family

    YS: What has been the influence of your parents in shaping you to be the fearless person you are?
    Kiran: My parents had a great influence on me. My father was a man ahead of his times. He would say to me just because you are my daughter doesn’t mean you shouldn’t have an aspiration to pursue a career. In fact, I want you to pursue a career.
    He was also a brew master and he wanted one of his children to be a brewer so he said, you do it. And I was like but I am a woman. And he said, ‘why shouldn’t you? It’s all in your mind. You can be a very good brew master.’ He had that kind of faith in me. My father also taught me a lot of good values. He used to say, “I’ll tell you something, there is good in every human being, and if you’re a good manager you bring out the goodness in people. A good manager is someone who brings out the good in everyone. And it’s for you as a manager to actually bring out that goodness.” I always thought that was such a telling a piece of advice.

    Kiran with her parents
    Kiran with her parents
    He also instilled high ethical values in me. He used to say, “There is no point in taking shortcuts, there is a good way of doing business and a not so good way of doing business. And I want my daughter to run her business in an honest way. And I want my children to have a very high sense of integrity in society.”

    Kiran with her parents as a child
    Kiran with her parents as a child

    My mother was always there for me. She believed in the same values as my father. She believes in self-reliance. After my father passed away, my mother started her own venture to keep herself mentally engaged positively (she had never worked previously and was a homemaker). She runs her own business even at the age of 82. She said one day to me, “You know I read that Alzheimer’s and Dementia happen to people who don’t keep their minds engaged and I want to keep myself really busy, and if I run a business, it will keep me fully engaged.” (Laughs
    fondly.)
    (We will bring you the story of Kiran’s mother shortly, she runs an automatic laundry business, Jeeves)
    YS: Being a woman in business, successful entrepreneur and role model, what has it been from a gender lens? What would you tell all the upcoming women professionals out there?
    Kiran: When I went to Australia to do my brewing course I was on my own. I was the only women in my class. That was a very transformative time for me because I suddenly realized that I could stand on my own. I could basically match one for one with men and with my male colleagues. I topped the class even though the others had a lot of experience — they had all come from breweries. It taught me that being a woman does not have to be a handicap or a disadvantage. Being a woman has actually helped me gain confidence.
    I always tell women, it’s all in your mind. Why should you feel that because you are a woman you can’t do certain things? What can’t you do? Please tell me.
    What I think you have to learn (and many of us out there) to do is to basically almost turn a deaf ear to criticism that makes you feel different, that makes you feel that because you’re a woman you’ll have problems.  I learnt to do this early on. I found myself in a position that I was technically very competent at, so it gave me a lot of confidence. When I would go to breweries and I had to do business with brewers and technical people, I could speak their language.  And I could actually have a very engaging conversation with them, and I knew that quite a lot of the times, I had an upper hand because their technical knowledge was not as good as mine. I worked on my strengths. Work on your strengths and take advantage of it.
    I always say that as a woman if they treat you like, poor thing, you need help, then take the help (laughs). You may not need it, but take it. I remember I used to take full advantage in the government offices. I used to go to the government offices for licenses. I remember going to a senior bureaucrat and telling him, ‘you know I’m feeling very intimidated.’ Why?’ he asked. I replied, “When I’m sitting in your corridor waiting for you to call me in, some of these real new fixers and all come and tell me, you have to bribe to get this permission. My God, I’m getting quite scared, if I have to bribe then I don’t know whether I should run a business. The bureaucrat said, ‘No, no, no…don’t believe anybody, you don’t have to bribe.’ I said, ‘Oh great, I’m so happy then!’ He said, ‘Now don’t sit in the corridor, from now you sit inside my room. Don’t let people bug you. No, you don’t have to bribe at all.’
    And the best part is that there are really good government people and folks out there. We just need to learn to see it constantly. You think everyone is bad, but it’s not like that. I would say the majority of government people are very helpful, very good also. And I still remember, when I got my approvals, this poor chap sent me a telegram saying ‘congratulations, we’ve approved your company licence.’

    Kiran at Biocon construction site
    Kiran at Biocon construction site

    Similarly, in Bangalore every time I used to go to the industries, the secretary’s office, there would be a whole bunch of people, but I would always be asked first because I used to be the only woman there.  It’s a great advantage being a woman. We just need to see it differently.
    And I never had to bribe. I would get all my stuff done. My male colleagues would be like, we are very envious of you and it’s not fair, you never have to pay a bribe and we have to. Once they told me, ‘oh this fellow, he’s a real corrupt guy, I challenge you, let me see how you will get away without paying this guy a bribe. He demands at least 10% cut of the subsidy otherwise he will not even give you the cheque.’ And I would walk in and get the cheque without doing anything. The guys would tell me, ‘this is not fair, how come he gives it to you and not us.’ and I remember replying, ‘yeah because I’m a woman. He has no guts to ask me for bribe.’ ‘But I’ll tell you the real reason,’ I said. ‘I go personally and do all this work, you guys send your peons, your clerks, your subordinates. It serves you right.’ The moment you send in your subordinate, they will ask for money. But when you go on your own, who will ask you for money. That’s a very important lesson that I taught myself and I am sharing it with you; if you want things done, do it yourself.
    My father also taught me one more thing, he said, when you ask for certain things from the government, don’t do it with a vested interest for yourself, do it with a vested interest for the entire sector. I have learnt to do that, and today whenever I talk to the government, either the state government or central government, I don’t go and say Biocon needs you. Maybe some of it Biocon doesn’t even need, but I talk for the industry because I want the industry to grow.

    Embrace this mindset of growth for all and see how growth embraces you in abundance.
    K-M-Shaw

    In a way, I fully subscribe to what Prime Minister Narendra Modi is doing in terms of dealing with crony capitalism. I’ve always had a lot of, you know, skepticism for this close nexus between industry and government. I’ve seen too much, where industry is constantly trying to corrupt the government to get a few freebies for themselves. I think that’s wrong. I believe you have to do it for the whole sector so that whatever you’re asking for, let everybody benefit, not just you. Although a lot of people might say Kiran is stupid, she doesn’t realize how business works, but those are  the values I’ve grown up with — ask for everyone, not just yourself, and see how you can impact all.

    Wednesday, November 5, 2014

    The duo who reshaped the idli, literally

    Chennai-based Idli Factory sells up to 200 boxes a day

    For a large part of his professional life, he was working for overseas clients. But when RU Srinivas decided to turn an entrepreneur, he wanted to do something for the domestic market. His argument: not too many people were taking the domestic consumers seriously enough.

    And, being a self-confessed foodie, what better than get into the food business, catering to consumers at home. The dish that he decided to serve them: the ageless and timeless idli, re-shaped, packaged and served to eat on the go.

    As to why the focus on the domestic market, a peek into Srinivas’ career provides the insight. He studied for CA during the day and attended evening college for a B.Com degree, then studied M.Com by correspondence, went to the US for an MBA and worked in a bank in Boston for three years as a loan analyst. He returned to India in 1993 and worked for companies that would allow him to, as he says, “have one foot in India and one foot in the US.”

    He was largely in the IT/BPO space with his last job being CEO of Caliber Point, the BPO arm of IT company Hexaware. His job meant that he had to travel a lot and found that being a vegetarian, food was a major limitation. “It was beginning to get a little tiresome and I wasn’t enjoying myself as well. I decided to quit and do something else,” says Srinivas, in his first-floor office in the same house he grew up in, in what was once a quiet residential part of Chennai. The ground floor serves as his “factory”.

    Triggering point
    But the trigger, he says, for getting into the food business and deciding to make idlis was a trip to a restaurant in Chennai, when he had to fork out ₹77 for a plate of idli. He thought that was exorbitant and without any reason. He realised that a large part of the cost was the real estate and salaries for the numerous waiters hanging around, all of which were getting billed into his idli.
    So, even as his mind was made that he would get into the food space, he was sure that he would not set up a restaurant, but would have a central kitchen and thus substantially minimise the real estate cost. This obviously meant that the food could be enjoyed even if it was not hot. His mind went back in time, to the train journeys that his mother and grandmother would go on, when they would pack food that would last the entire journey. And, one of the items was the idli, which would be made fresh, soaked in milagai podi (chilli powder) mixed in gingelly oil. The longer it soaked, the tastier it would be. Bingo, he had the dish that he would make in his central kitchen and sell. And, thus was born his venture Idli Factory, which he started with friend Rajan.

    Various combinations
    The two partners tried various combinations of rice and urad dhal, till they were convinced that they had got it absolutely right. Both were keen that they make something that was world class. But, then Srinivas felt that the “idli market needed some shaking up.”

    They thought the easiest thing would be to change the shape of the idli. Only later did they realise that this was easier said than done. Moulds to make idlis were available only in the circular shape. For good reason, they realised. “Getting the right sort of mould was a nightmare. It is only then we realised the wisdom of the current shape, because you are able to scoop it. After a lot of effort, we worked on a mould that allowed us to get consistently shaped products,” says Srinivas.

    Srinivas and Rajan persisted and then came up with a rectangular shaped idli, coated with milagai podi (chilli powder) mixed in gingelly oil. What did they call it? Madras Bars. Then there were the small, circular mini idlis coated in curry leaf powder and garlic, branded Madras Roundtana. Srinivas credits the Chennai-based Firebrand Labs, which he says is “our marketing arm for the branding and packaging.

    “They have been pretty much joined with us at the hip right from the beginning.” It was in April that Idli Factory took off. The products are available only in Chennai through select retailers. They sell up to 200 boxes a day and can make around 1,000 boxes a day if there is demand. Srinivas would like to get into other similar traditional foodstuffs that are popular in different regions.

    Challenges
    But he is aware of the challenges. Distribution and shelf-life are a challenge. The idlis do not have any preservatives and though they can last for a couple of days, retailers prefer to return unsold boxes the next day. “Is there some way where I can work on the packaging to improve shelf-life without adding anything, without altering the composition of the products,” wonders Srinivas.

    How does he reach out to more retailers in the city, especially when he offers an attractive 20 per cent margin? Is there somebody else in a similar business? Can he pool logistics resources with them, he asks, listing out the challenges.

    Spreading beyond Chennai would mean that he should either set up central kitchens in different cities or adopt the franchise model. “Is franchise the right route? I don’t know,” confesses Srinivas. “We seem to have made a mark by being paranoid about quality. Can I expect the same sort of thing? Do I know how to drive quality in a remote location in manufacturing? All our lives, we have driven quality in remote locations. But this is a new game for us,” he says, adding that both Rajan and he are in the process of learning and growing their business.

    Wednesday, October 29, 2014

    Google developing cancer and heart attack detector

    SAN FRANCISCO: Google is exploring a way to search inside people's bodies for early signs of deadly illnesses such as cancer or heart disease.

    A Life Sciences team at the special projects Google X Lab are experimenting with having "nanoparticles" hunt for signs of medical trouble in bloodstreams and then essentially report findings to sensors people could wear.

    "This is still early-stage research, but we've done a number of promising experiments, so we're going to keep going," Google said in a description of the project made public on Tuesday.

    Imagined applications include a test for enzymes given off by arterial plaques that are about to rupture and cause a heart attack or stroke, or a way to watch for cancer cells after surgery or chemo treatments.

    Early detection is known to dramatically increase chances of successfully treating a number of life-threatening diseases.

    Batches of specially crafted nanoparticles, each microscopic in size, could be swallowed in pills and then absorbed into bloodstreams where they would stick to targeted cells such as cancer.


    In a description of the project, Google said that they have done a number of experiments.

    Magnetic qualities designed into nanoparticles allow them to be drawn to worn devices and counted using non-invasive detection methods such as light or radio waves, according to Google.

    If successful, the technology could "help physicians detect a disease that's starting to develop in the body," the California-based technology titan said.

    Google said that it would license the technology to companies interested in using it for medically approved diagnostics.

    Google Life Sciences team innovations include contact lenses that measure glucose levels in tears to allow people with diabetes to track blood sugar, and eating utensils that cancel out trembling hands caused by diseases such as Parkinsons.

    Google also last year formed a company called Calico with a mission to address problems of health and aging by harnessing advanced technologies.
     

    Thursday, October 23, 2014

    Who's moving where?

    Global migration patterns, by the numbers

                        By GE Look ahead

    EMERGING MARKETS / ASIA, AUSTRALIA, EUROPE, MIDDLE EAST, AFRICA & TURKEY, NORTH AMERICA, SOUTH AMERICA

    Who's gone where?
    Global migration statistics, which keep tabs on who’s moving where, reveal interesting shifts in global migration patterns. According to the Wittgenstein Centre for Demography and Global Human Capital, the largest regional migration from 2005 to 2010 was from Southeast Asia to the Middle East while nine of the 10 largest country-to-country waves were in Asia. The face of migration has changed and emerging markets are its rising stars
     
     

    Wednesday, October 22, 2014

    Wipro takes baby steps into $6 bn world of 3D printing with lone printer

    On August 14 this year, Maltesh Somasekarappa received a call from one of the largest hospital chains in Mumbai. The caller, a doctor, sounded impatient and demanded how soon Somasekarappa, who heads Wipro's 3D printing unit, could make a human skull.

    The doctor explained that the hospital was looking to replace a portion of a patient's fractured skull after a car accident. The patient could slip into coma any moment if not operated upon immediately, the doctor stressed.

    "How early can you do it?" the doctor asked again. The hospital then emailed skull scans and other specifications for Somasekarappa to "print it out". Somasekarappa, who had recently convinced the top bosses at WiproBSE -0.27 % to invest in an additive manufacturing unit with a 3D printer that cost around $1 million (Rs 6 crore), asked his four-member  team to assemble and being work so as to ensure that the titanium replacement skull was ready within hours.

    "By lunch on Augus ..August 15, we were ready to ship the skull," he said, "but the patient slipped
    into coma and is still not in a condition to be operated upon." Interestingly, printing skulls is not the core part of Wipro's fledgling 3D printing business,  which is now printing objects ranging from satellite antennas to parts of hydraulic pumps and even fuel nozzles for airline engines.

    For Wipro, these early investments in additive manufacturing -next-generation manufacturing that involves 3D ..are aimed at transforming its traditional hydraulics business, and at the same time finding an alternative revenue stream.

    Also known as additive manufacturing, 3D printing uses an automated process that can create the units in one metal piece through successive layering of materials. Globally, GE, Nike, Boeing, Siemens and Rolls-Royce are some of the early adopters of 3D printing, making it an over-$6 billion (Rs 36,000-crore) industry in three years, according to a report  according to a report by consulting company Wohlers Associates. According to research firm Gartner, over 14,000 units of 3D printers will be shipped across the markets of Asia Pacific by 2017.


    The big driver for Wipro, according to Pratik Kumar who heads Wipro's infrastructure business, was
    that most of his existing customers appeared interested in 3D."We were seeing at least 25-30 new product launches from our customers every year: they needed prototyping and iterations on the go," said Kumar. Most of these customers are in the aerospace, defence and healthcare segments where the stakes are high for each new product launch.

    Indeed, when WiproBSE -0.45 % incubated its 3D printing division last year, the idea was
    to tap into a small but fast-growing market for printing machine parts used by aerospace and defence companies. Healthcare was not at all in the plan. The  possibilities, it now seems, are only limited by imagination, the challenge being not to dilute from the core areas.

    "Initially, there was a temptation to get into the retail side of 3D printing, but we realised it could
    be a distrac ..distraction," said Kumar. So far, the company has invested around $2 million (Rs 12 crore) in the 3D printing plant with just one printer, and the early results seem to be encouraging.

    The early customers include Hindustan Aeronautics Limited, which is taking Wipro's help for 3D printing Vane Guides — machine parts that go into the combustion chamber of the engines, and even a two-wheeler maker that wants Wipro to help with manufacturing some parts as it  prepares to relocate its plants. Wipro declined to elaborate specific work being done for clients, including the engagement with old-time partner General Electric, which according to several people is already running pilots to print fuel nozzles. Globally, GE is looking for ways to manufacture around 85,000 fuel nozzles for its new leap jet engines. And 3D printing is at the core of this hunt. At a time Prime
    Minister Narendra Modi is pushing to create more manufacturing jobs through "Make in India"

    Wipro believes the country needs to embrace next-generation technologies, and not just compete on
    low-end projects. "Any economy cannot leapfrog by missing the manufacturing bus — this (additive manufacturing) is our opportunity to catch up, especially given our design skills," said Kumar. Wipro's partner, Singaporebased EOS, which specialises in additive manufacturing and has even sold its 3D printer to Wipro, said India is best-positioned for this. "Some studies show that atleast 30% of the products designed in the world are designed by Indians; however this has not translated to manufacturing in India," said Terrence Oh, vice-president, EOS Asia Pacific Operations.

    To be sure, 3D printing cannot match conventional manufacturing in scale, and most of the next generation  manufacturing is still focused on fewer units (in hundreds or thousands and not millions of units). But in the areas of defence, aviation and healthcare, companies such as Wipro are hoping to produce high-quality machines without having to wait for "economies of  scale" advantage. "Will this be a billion-dollar business someday? Of course, we would like it to be. But for now, the focus is on scaling what we currently have to 4-5-10 times," said Kumar.

    Tata group’s Ramadorai to mentor tech entrepreneurs

    S Ramadorai, a doyen of the Indian IT Industry, is eager to be a father figure to budding technology entrepreneurs. The former Vice-Chairman of Tata Consultancy Services says he is open to mentoring start-ups that have the potential to put India on the global map for indigenous software products through affordable technology.
     
    “If a young entrepreneur comes to me with a good idea, I am more than happy to provide inputs and guidance. Hand-holding is always the first step. I have not invested in any start-ups till date, but I am open to it now,” Ramadorai told Business Line in an exclusive meeting. Recently, Tata Group’s Chairman Emeritus Ratan Tata picked up stake in Snapdeal.com, India’s largest online marketplace, for an undisclosed amount.
     
    Ramadorai, who recently retired from TCS after over 40 years of service, says he is more interested in start-ups focused on non-invasive health monitoring, digital learning, big data, analytics and skills augmentation.
     
    “I would like to see an increase in the scale, size and number of companies that own intellectual property in India. Shared wealth and IP that can make a global impact is what we should aim for,” said Ramadorai.
     
    He continues to hold key positions with various Tata institutions. Apart from being the Chairman of Air Asia India, a three-way joint venture between AirAsia, Tata Sons and Arun Bhatia’s Telestra TradePlace, he is the Chairperson of the Tata Institute of Social Sciences governing council and Chairman of the Bombay Stock Exchange.
     
    Bridging skill gap

    Software products that could help the cause of bridging the skill gap at the grassroot level are high on his agenda.
     
    “From the point of view of corporate social responsibility, the Tata group is looking at skilling in addition to education and healthcare. We are trying to put together a strong programme on that front,” said Ramadorai, who also serves as the Chairman of the National Skill Development Corporation.
     
    ‘Try new things’

    So what is Ramadorai’s advice to emerging entrepreneurs? “Be willing to try new things at a young age. Do not worry about success measured by revenue and do not be disheartened when people say you have failed. Don’t write off a particular product or concept just because it failed in the market at the first attempt,” he added.
     
    Ramadorai was made TCS’ Vice-Chairman in October 2009, after serving as the company’s CEO and MD for 14 years. Between 1996 and 2009, TCS grew from a $160 million firm to a $6-billion behemoth

    Sunday, September 28, 2014

    A quarry that produces organic fruits

    Those who visited the laterite quarries near the industrial park at Ganjimath in Mangalore taluk three decades ago would not have imagined that they would see an organic farm in the years to come.
    Efforts by U Rajesh Naik, owner of this 100-acre Oddoor Farm, have made it an integrated self-sustaining organic farm.
    Now most of the fruit-bearing trees such as mango, papaya, cashew, rambutan and commercial crops such as coconut and arecanut along with a man-made lake and a dairy are the main strengths of this farm.
     
    Naik told BusinessLine that though he inherited family property, he wanted to do something on his ownand went ahead with buying dry land at Ganjimath 27 years ago. The quarries were levelled and a cultivation plan was made after that. He planted coconut, cashew, mango and arecanut.
    Taking into consideration the immediate requirements such as irrigation and manure for farming, he began working on them simultaneously.
    Water

    Thankfully, there was a small well on the land he bought. Slowly and gradually he converted the water body into a lake. Now it is a 60-ft-deep two-acre water body. It sustains the entire operation of the farm and his house.
     
    Even during the last summer, water level did not go below 25 ft, he said, adding that the water table has gone up in nearby areas in the recent years.
    As he was determined to make the farm organic, he began rearing a few cows with an intention to provide manure to the farm.
    Dairy

    The total number of cows has crossed 200 now after 27 years. With pride, Naik said he is a major supplier of milk to the Karnataka Milk Federation’s dairy in Mangalore. His dairy supplies around 800-1,000 litres of milk a day to the federation.
     
    Three veterinarians visit the dairy regularly to care of the health of cows. The green fodder for cows is grown in his farm only. Naik is getting multiple benefits from the water used in washing the cow sheds also. The slurry from the dairy, which contains cow dung and cow urine, is stored in a tank near the dairy. Fermentation in the tank leads to formation of methane, he said.
    Power

    One of the outlets from the tank collects the methane to run a 65-kv power generator. Power for farm operation and house is generated that way. The methane-free slurry is sent through two different outlets as liquid and semi-solid manure.
     
    Naik claimed that he gets around one lakh litres of liquid manure a day. There is good demand for this in the nearby areas also. Semi-solid slurry is used for the production of solid manure through composting.

    Monday, September 22, 2014

    Learning from Alibaba

     
     
     
     
    The most exciting event of last week was undoubtedly the listing of Chinese e-commerce giant, Alibaba Group Holding, on the New York Stock Exchange. The Alibaba share listed at $92.70, a whopping 36 per cent premium to the offer price, proving right analysts who felt that the IPO price was conservative.
     
    The scale of Alibaba’s listing success should be evident from the following: the $21.8 billion it raised (could get close to $25 billion if the issue managers decide to accept the excess subscriptions) was the highest amount ever raised by an internet company in the U.S. It was much larger than Facebook’s $16 billion and Twitter’s $2 billion.
     
    The valuation of $231 billion that it secured on listing day now makes it the 11{+t}{+h}most valuable listed company in the U.S. ahead of the bluest of blue chips such as Procter & Gamble, Pfizer, IBM and Coca Cola.
     
    Jack Ma, who founded Alibaba with $60,000 in an apartment at Hangzhou, south-west of Shanghai, in 1999, is now the richest man in China with a net worth of close to $22 billion.
    The 49-year old former school teacher has not only inspired a thriving start-up culture in China but has also created immense wealth for employees, a number of whom are vested with shares in the
    company.
     
    Scene in India
     
    In the backdrop of Alibaba’s success, it is tempting to look at the scene in India. Admittedly, there is no comparison between China and India when you consider key numbers such as internet penetration, on-line buyers and e-commerce sales volumes.
     
    Compared to China’s estimated $180 billion e-commerce market, India’s is a piffling $13 billion, according to a study by KPMG and Internet and Mobile Association of India. About 70 per cent of India’s market comes from online travel transactions.
     
    India’s internet users number a little over 200 million: China has more than thrice that at 632 million and is projected to touch 850 million by 2015. India is projected to cross the 500-million mark by 2018. The number of on-line buyers in India is expected to cross the 39-million mark by end of this year; in contrast, Alibaba alone has 279 million active buyers in China!
     
    There are two ways of looking at these numbers. The first is to fret over how far ahead China’s e-commerce market is and how Indian consumers are still in the brick-and-mortar shopping era. The other, more optimistic way, of looking at the comparative data is to realise the potential that India holds for growth in the e-commerce space. That is exactly the attitude and approach of those such as Flipkart, Jabong, Snapdeal, eBay and Amazon in India.
     
    The optimism seems to have rubbed off on financiers as well — Flipkart bagged $1 billion in funding in July which valued the company at $7 billion. In barely three months since the previous funding round in May, Flipkart’s valuation had more than doubled prompting founder Sachin Bansal to dream of turning into a $100-billion company in the next five years.
     
    Not just Flipkart, its much larger rival, Amazon, has also been stepping on the accelerator in India. Within a day of Flipkart announcing its $1 billion funding, the U.S. e-commerce giant said it would be investing $2 billion in India. Why this burst of optimism in the industry?
     
    For one, the number of on-line buyers is projected to treble to 128 million by 2018 according to research firm Forrester. If the growth in mobile penetration is any indication, this is a conservative projection given that half of all internet users in India are based on mobile platforms. The competition is to grab as much of the new users as possible.
     
    Yet, where the players could be going wrong in India is on their revenue-first strategy unmindful of profitability. While the likes of Amazon and eBay may have deep pockets, the same cannot be said about their domestic counterparts, the large funding rounds notwithstanding.
     
    Alibaba was smart in its business strategy which ensured that it would be profitable. For instance, with millions of products vying for customer attention on its portal, Alibaba devised options for sellers to advertise on its site and also set up attractive online storefronts for a fee.
     
    It also leveraged on its massive size in terms of registered customers by blocking search engines such as Baidu from trawling its e-commerce portals when users search for shopping options. Perforce, Alibaba forced buyers to approach it directly and thus made its portals attractive for advertisers. Alibaba thus captured the advertisement revenue that would have gone to Baidu otherwise.
     
    While it is understandable that the Flipkarts and the Jabongs may be eyeing Alibaba’s success longingly the fact is that they need to devise similar innovative strategies to turn profitable. Flipkart already boasts of 27 million registered buyers — two-thirds of total online buyers in the country — which can be leveraged to attract advertisers in a bigger way. The Indian e-commerce industry is obviously beginning to take-off.
     
    It will be interesting to watch whether it will eventually spawn a local Alibaba or will it be consumed by giants such as Amazon or eBay. Or who knows, even Alibaba.