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How they breached theGREAT FIREWALL OF CHINA
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As a student at Delhi University, Ishita Anand
was part of a team that built the university’s fi rst online magazine. “I was in a startup without realizing it,” she says. At 22, when she was working on an idea of her own, she real-ized how diffi cult fund raising was. So, in 2013, she started crowdfunding platform BitGiv-ing. A campaign to raise funds for the Indian ice hockey team to compete in the Asian Championships was a success. “Now I don’t have to explain what my organi-zation is about,” Ishita says.
Anubhab Goel’s fi rst venture, soon after
completing his MBA-HR from MDI Gurgaon in 2006, failed. “I couldn’t handle it
alone,” he says. Then came the e-commerce wave, and Goel
wanted to be part of it. But do what? One night in 2013, an
airconditioner in Goel’s room malfunctioned and he couldn’t
get a repairman. That humid Mumbai day, he and friend Amit Kumar
realized the need for on-demand home services, and thus
was born Zimmber. The venture re-
ceived funding from IDG and Omdiyar
last month.
DONE DEALS PERSON OF THE WEEK
O ne meeting was all it took for Hrishikesh Kulkarni to start working on the details of Freshdesk's acquisition of his three-year-old
Bengaluru-based startup, 1Click. “When Girish (Mathrubootham of Freshdesk) made the offer, I called my team, family and investors. Everybody was thrilled, and you get a gut feeling,” he says. Kulkarni grew up and studied in Mumbai. He does not have an IIT or IIM pedigree, but has 12 patents to his name, most of them related to videoconferencing. The patents have helped Kulkarni develop products that enable businesses to collaborate. But Kulkarni is modest about the patents: “I got those patents when I was working for big companies. These companies are insecure and need to protect themselves.” Kulkarni worked in three startups in four years in the US. Two failed, one was acquired. He then worked at Alcatel-Lucent and Logitech and moved back to India. He calls himself a self-taught engineer. “I returned to India to become an entrepreneur but it took me ten years to take the plunge due to family commitments,” he says.
Source: Tracxn!
OTHERS WHO RAISED FUNDSScripbox ($2.5m), Zoojoo.BE ($1m), HyperVerge ($1m), BetaOut ($500k), Shadowfax ($300k), Edu4share ($210k), VoxWeb ($100k), NDTV Gadgets, GetLook, Fixy, MSM Box, VanityCube.in, MassBlurb, Orobind, Twyst.in, Yourstory
Abhinay Choudharico-founder
Hari Menonco-founder
VS Sudhakarco-founder
Mebelkart, Bengaluru; online retail portal; founded by Ranjeet Vimal, Nikhil Saraf, Rahul Agrawal; $20 million from AskMe
Roposo, Gurgaon; fashion website; founded by Avinash Saxena, Mayank Bhangadia; $15 millionfrom India Quotient, 5ideas.in, Tiger Global
OneAssist, Mumbai; management solutions provider; founded by Gagan Maini and Subrat Pani; $7.5 million from Lightspeed, Sequoia, Assurant
IntelligenceNODE, Mumbai; consulting firm; founded by Sanjeev Sularia, Yasen Dimitrov; $4.3 million from New Enterprise Associates, Orios Venture Partners
BigBasket,Bengaluru; online delivery
platform for groceries;
$50 millionfrom Helion, Zodius, and
Bessemer
EUREKA MOMENTS
ANUBHAB GOEL: AT YOUR SERVICEISHITA ANAND: GETTING CROWDS TO FUND
Naveen Tewari is now a regu-lar invitee to what China calls the G20, a select group of internet companies that come together to discuss the future of the internet. He represents InMobi, the In-
dian mobile ad network that he co-founded in 2007, at these meetings, sitting alongside the heads of some of the biggest internet companies in the region, including Tencent, Alibaba, Baidu, Huawei, and SoftBank.
The G20 is a quasi-government initiative, and InMobi is invited because it is the second biggest mobile ad network in China; Tencent’s WeChat is the Goliath in the space. InMobi entered China in 2012, and reached the No 2 spot in barely two years. But since WeChat is an app that serves ads within itself, InMobi is seen as China’s biggest independent ad network, one that serves ads across a multi-tude of apps.
Tewari says he has never felt in the G20 meetings that China wants to keep out exter-nal folk. “The preconceived notion is China is hard to crack. But China has evolved a lot since the early days of banning Google. They feel they have to open up or be left behind. All the big Chinese companies are coming to In-dia – Alibaba, Tencent, Baidu, Xiaomi – and they have global ambitions. They realize it cannot be one-sided ambition,” he says.
Build a Chinese mindsetGlobally, InMobi has a network that rivals Google and Facebook, but Tewari describes the company's success in China as unbeliev-able. “We have grown ten-fold in China in the last three years. Our popularity in China is ten times that in India. All big customers there know what InMobi does. And it shows the openness of China,” he says.
Tewari and others in the InMobi leader-ship are convinced other Indian companies can be similarly successful, but they note that it has to be tackled differently from many other parts of the world.
The most important element is to acquire
a Chinese mindset. It’s a very different cul-ture and we just don’t know the language, says Abhay Singhal, InMobi co-founder and chief revenue officer. He remembers the first time he landed in China. “Nothing that I was used to could be accessed in China – no Gmail, no Hotmail, no Yahoo, no Google; most of the familiar apps don’t work. Customers would invariably ask for my QQ number, which was the biggest messaging service (now it’s called WeChat). They don’t work with email, or phone numbers,” he says.
The Chinese are hierarchical. The boss is God. So communications have to be top-down.
The whole system is extremely aggressive and everything moves fast. Indian systems and processes cannot handle that. “The sales folk are so aggressive that in China we give commissions for every transaction, not peri-odic bonuses as elsewhere,” Tewari says.
Singhal notes that Chinese work at least one-and-a-half times more than Indians. “China knows that the only way to succeed is to move fast. So you have to multiply all your definitions of scale by 10x in China,” he says.
Singhal is clear: Never send Indians to build your business in China. I have seen IT
services companies trying to do that. The busi-ness has to be built by the Chinese. And trust the local person to take the right decisions.
For the launch of its latest product Miip in China earlier this week, all invites went out on WeChat. At the event, Tewari spoke his entire seven minutes in Mandarin, some-thing that the company put a lot of effort into. And unlike in the Miip launches in the US and India, where Tewari hogged the show, in China, most of the time was given to Jessie Yang, head of China operations, and Bill Qiu, head of business development & publisher relations.
Leader must be global-localGiven the need to localize, the leaders you choose for your Chinese ops have, obviously, to be Chinese. It must also be global quality talent, says Tewari. Yang has an MBA degree from MIT and has worked at several global companies, including McKinsey. Qiu studied at MIT, and worked at McKinsey and Baidu.
“There are lots of such talent. They are expensive, but extremely ethical, aware of Western ways of working, and have good con-trol over the English language,” says Singhal.
Yang says she lived in the US for ten years, so she has a global view. “But that’s not good enough. You have to also know the local mar-ket really, really well. China is the most dy-namic mobile market in the world. Alibaba and Tencent are among the world’s biggest internet companies, so there’s huge local com-petition. This means we have to move very fast, adapt,” she says.
Create for ChinaMobile is by far the most dominant screen in China, which is the world’s biggest and most dynamic mobile market. No wonder the prod-uct you deploy in China has to be hugely cus-tomized. Piyush Shah, InMobi’s chief prod-uct officer, says initially the company would launch products and services for the Eng-lish- speaking audience, and then take it to China. “But we realized quickly that doesn’t work. The Chinese appetite for trying out new things is very high. So we started launching new products and services in
China at the same time as we did globally, and in some cases, like with our native ad service, we launched first in China,” he says.
The payment infrastructure in China is dominated by mobile wallets like Alipay and WePay. So partnering with wallet players is critical for commerce. For tracking and ana-lytics in the domestic market, Chinese adver-tisers are most comfortable with local players. So again, InMobi had to identify the best of these local analytics players, and build deep technical partnerships with each of them, allowing them to extend their targeting and optimization capabilities to advertisers work-ing with them.
“Our product and technology has always been ahead of competitors. Every quarter we bring a new product,” says Yang, explaining why InMobi has been the most successful in-ternational internet company in China.
JV not a good ideaThe company says you should avoid a joint venture if you can. In some areas like media, communication, messaging, and money trans-actions, the country will not allow an inde-pendent business, and you will necessarily have to do a joint venture. But in all other areas, it is feasible. “It becomes easier to ex-ecute if you are independent. Few JVs have been successful in China,” says Tewari.
But you will require a license if you plan to go as an independent company. “This de-layed our entry by 5-6 months, made it a little uncertain. But eventually, you are masters of your own destiny,” Singhal says.
No government interferenceThe common perception is that the Chinese government is like a big brother constantly watching over you. Tewari says nothing can be farther from the truth. “We have never met government officials, except at the time we needed a license to set up the company,” he says. He goes on to note that India-China collaboration is a big new trend. “It’s a new world order. We are simi-lar countries, hungry, aggressive, mobile-first. So China is a land of huge opportuni-ties for Indians,” he says.
BEAUTY CLICKS
China is often regarded by foreign companies as impregnable. InMobi has demonstrated that it isn’t. The Indian ad network has become one of the leaders in its space in China, perhaps the first Indian
company to make an impact of that intensity. The way it has done it, has lessons for all
How they breached theGREAT FIREWALL OF CHINA
BEING CHINESE: It's goal-setting time for InMobi founders Naveen Tewari and Abhay Singhal, CFO Manish Dugar, their Chinese team, and its head Jessie Yang, at Beijing, in January
Create a milestone-based city launch plan
Make employees believe they are part of a mission
What are the best practices in managing teams in multiple cities as a company
expands rapidly while ensuring all teams are independent as well as centrally aligned and sharing best practices?
Even after raising $500k - $1.5 million kind of seed rounds, startups find it difficult to hire for
key positions. There is a big mismatch between what they can pay and what these executives are being paid at larger or more fund-rich startups. In such a scenario, what kind of hiring strategy should a startup follow?
The key to effective, consistent and sustainable city-wise expansion is to have measurable indica-tors, defi ned milestones and effective transfer of
knowledge. I’ve learnt the below from some companies where I’ve invested and from my own experiences: First, before you start expanding:
Build a process-wide key performance indicator (KPIs) framework; this is the foundation
Set up processes and document them Try and computerize as many processes as possible
Then, each city roll-out should follow a structured script: Create a milestone-based city launch plan Create a city launch team which goes from city to
city to launch. This team can be a mix of people from existing cities or a specialist launch team. It must contain one recruiter who goes six weeks ahead of the rest of the launch team. In the fi rst four weeks, the team should execute the milestones which have been set; in parallel, the recruiter should hire people locally. From around the fi fth to the tenth week, the city launch team should transfer the processes and knowledge to the local team
Lastly, to ensure quality sustenance and improvement post launch:
Set up a city monitoring team which ensures standard compliance across cities. You can use a compliance framework like ISO or Six Sigma. This framework should be a key part of the process.
Hold regular calls/meetings to collect learnings across cities and upgrade processes
Maintain a knowledge Wiki and keep it updated It also helps to have infl uential members from a city
work in another city for some time to exchange best practices.
You have to bring key hires on "mission" sala-ries not "market" salaries. For this to happen you have to set out to shape the market and
aspire for something bigger than just doing dhanda. Zappos took this approach even when selling shoes. In India, Team Indus uses this method to, sometimes, hire at 10% of their market salaries!
People love to be part of a mission that is larger than life. This is why open source thrives. Think of it… people write for Wikipedia for free, stay anonymous and yet love the experience. Foradian, in Bengaluru, has leveraged this dynamic brilliantly. They've gone open source, hired some good people and prospered. Bottom-line is that if you become a missionary entrepreneur, attracting others who buy into the quest becomes a lot simpler. All this sounds counter-intuitive, perhaps even crazy, to a traditional businessman but it works like a charm. Try it!
In this column, young entrepreneurs ask questions that they have found important in the course of
building their ventures, and Startrek gets them answered by seasoned entrepreneurs,
investors and other startup experts
DOUBT
FIRE
Q
Q
A
A
Rehan Yar KhanGENERAL PARTNER,ORIOS VENTUREPARTNERS
Avinash SaurabhFOUNDER,ZOOJOO.BE, A SOCIALWELLNESS PLATFORM
Sharad SharmaCO-FOUNDER,ISPIRT
Varun Khaitan CO-FOUNDER,URBANCLAP,AN ONLINE
MARKETPLACE
FOR SERVICES
On-demandbeauty services have emerged as one of the hottest new sectors of 2015. These startups aggregate beauty service providers who deliver the service at customerhomes
OTHERS WHO ALSO COMPETE WITH ON-DEMAND STARTUPS
VyomoBacked by cricketer
Yuvraj Singh
GetLookUndisclosed
angels
The Home Salon
Venture Nursery
STARTUPS THAT SHUT SHOP
8 7 4 2 2
BENGALURU MUMBAI NCR PUNE OTHERS
More than
75 startups were cre-
ated in the space over the last 12 months
Of these,
23have created
good traction with consumers
Orange N Lemon
Beauty On Call
BeautifyMe
GetMyLooks
PURPLLEFocuses on
beauty products and appointments
at spas
ZIFFILets
consumers book spa and salon appoint-ments online
NYKAAPositions itself as a
beauty e-commerce
site
STARTUPS THAT HAVE RAISED MONEY
StayGladSahil
Barua, Tracxn Labs
OF THE
23VanityCube.in
Undisclosed angels
Belita*India
Quotient
*Except Belita, all the startups were
funded in 2015
Most of them report an average ticket size of
around Rs 1,000
LET'S LEARN THE CHINESE WAYS As Indians we are fascinated by the Western world. But in terms of demography and
sociology, China is exactly like India; only the political system is different. So we can learn more from China than from the US. Chinese companies are aggressively coming to India. They know mobile so well that they will know how to capture market share in India. For our own survival, we need to learn from them. We can’t make ex-cuses like ‘I don’t know the language’. Take Paytm, they are also learning from China, given Alibaba’s involve-ment with them.
Abhay Singhal | CO-FOUNDER, INMOBI
Sahil Barua
Yuvraj Singh
Source: Tracxn!
22 THE TIMES OF INDIA, BENGALURUFRIDAY, AUGUST 21, 201516 THE TIMES OF INDIA, AHMEDABAD
FRIDAY, AUGUST 21, 2015STARTREK