Category Archives: Innovation

Innovation, StartUp

How to build a lean startup in a Tier 2 or 3 city in India ? – Part 1

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If you are exploring an option to start an IT / Digital startup in a Tier 2 or 3 city in India and are searching for some advice on how to do that in a lean, cost controlled way – here is some help:

  1. Register your company preferably in one of the three modes: Limited Liability Partnership, One Person Company OR Private Limited. There is a 4th option of proprietorship as well which is the easiest with less compliance requirements but with some other disadvantages. Select the one which suits your revenue, risks, appetite, customers and few other factors like in which line of business you are. You will need help of a CA and lawyer. Should include GST registration, Udyog Aadhaar, etc. Typical cost – Up to Rs. 20,000 plus invested amount for paid up capital – one time cost.
  2. You will need a business plan to chart out your path for at-least 1 to 2 years in the future. What will you offer: Products / Services / Or a mix of both? Where will you get the revenue from? Where will the funding come from? Who all will be your customers? What is the geography you will serve? Who will be your partners in management team? What partnerships in software / hardware with various companies do you need to have? How will you market & sell? What are the things you will outsource vs. do in-house? Where will the growth come from? Where are the future opportunities in the business space you want to serve? These are some basic questions that need to be answered in the business plan.
  3. Build your website preferably by investing time and taking help of another IT startup or SME. If you have the skills you can build it on your own. Typical cost for hosting & website, emails, some tools, cloud applications like project / requirement / salary management, storage, collaboration, CRM, etc. – up to Rs. 50,000 to 70,000 per year depending on what options, products, etc. you select.
  4. Register your Trade Mark. Typical cost – Rs. 10,000 to Rs. 50,000 depending on what all classes you file in and what are the further steps / objections. Once in 10 years.
  5. You will incur expense on office like properly lease, electricity & salaries along with maintenance of current account, debit cards, internet banking, etc. – Depends on the city and location along with employee strength – Typically Rs. 75,000 to 200,000 per month for 3 to 5 employee company in Tier 2 & 3 cities.
  6. You will need to meet legal & compliance requirements for filing taxes, annual meetings, audit, lawyer, etc. via a Chartered Accountant – Rs. 40,000 per year.
  7. Digital marketing & sales activities will be required to be done regularly. Here are some major ones: Advertisements on Google AdWords, Promotions on Facebook, Twitter, LinkedIn, etc. – Typically Rs. 50,000 to 75,000 per year.
  8. You will need to maintain Internet, computers and other associated administrative activities. Expenses – Rs. 20,000 per month.
  9. Setup and regular filing / maintenance for EPF / EPS, Employee medical / life / accident / professional liability insurance will need to be done. Related expenses – Depends on the size of your firm and revenue. But a reasonable amount for a small company of 10 employees is about Rs. 15,000 to 25,000 per month. Some of these are optional depending on the size of your company.

My suggestion is to go with a Tier 2 or 3 city as your base and use digital medium to offer your services along with usage of online products on taxation, legal, compliance, audit, salaries, collaboration, sales, marketing, etc. to manage your company as much as possible with as small a footprint as possible in physical world to start your venture.

You can save a lot on office lease, physical sales & meetings, fuel, meeting customers, collaboration and managing data if you go digital.

Reach out to me for any discussions, help, suggestions on building a lean and low cost startup. Good luck ! !

Innovation, Internet, Social Media

Integrate and evolve with digital, not resist and disrupt

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We hear lot of thoughts by people worrying about integrating with digital world like cloud, internet and so on with respect to privacy. Humanity is all about evolution and not about resist and disrupt.

What we need to do is embrace the digital world and find best practices and standards to move forward. Digital is not going anywhere. Its only going to be more and more around us. Rather than fight and disrupt, lets embrace it and integrate with it. Its just not about data and cyber security, its about what to store where, how much access, when, governance, what to do incase of data breach, backups, best practices, standards and so on.

Lets evolve with digital. 🙂

 

Innovation, Security

Encryption

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We all have seen passwords, SSL, HTTPS, public private keys, hashing, salting, digital signature, biometrics, honeypots, vpn key generating token, etc. which are ways of achieving authentication, security and encryption. But what if we use our surroundings and few other parameters as a private key/password.

You store profiles for your home, your office, garden you go to. Profile is a mix of your personal attributes (could be biometrics), surroundings like structures, sun light direction/strength/etc. which together form your unique private key.

Rather than generating and storing your private key on pedrive/device, etc why not build a private key as a mix of surrounding, sunlight, physical parameters like wind/structures/etc along with personal physical attributes. You could create multiple profiles for various places. This though works for limited number of places only. But to take it to multiple locations mix these personal attributes with Google maps building an equation together by digitizing both – that’s our private key that works everywhere.

You would say what’s the advantage over just using personal attributes as a private key. Well this varying key made of Google maps data plus physical parameters plus personal parameters is varying. Its like our VPN key generating token which generates a new key as you move, just that this can’t be stolen. 🙂 There are lot of sensors and lot of computing power to help us in this.

Culture, Innovation

Race to be leaner, lighter, faster – limits will hit us

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Whether jet engines, aircrafts, IT outsourcing, manufacturing or services there is a race to be leaner, faster, better, higher quality, etc with lesser resources – humans or machines or steel or fibre. In itself its an oxymoron or irony though not always. It actually stops innovation at times.

Let us look how:
Innovation and peak performance happens when a system/entity (human or machine) works at optimum load. Pressure equals force divided by area. If you decrease the area, pressure increases. It causes more stress per unit area. Whether new entity can tolerate it now due to advances is a different stream of research but definitely stress per unit area is increasing. For aircrafts its pressure or stress per unit weight, for humans its stress per person as its assumed people will work with higher efficiency in lean/agile mode.

A fundamental rule which we ignore here is that systems/entities/people will work optimally within evolutionary biology/theoretical physics limits only. We can’t change them. Like if you want to occupy an area you need specific number of people/police/army/robots, this rule doesn’t change. You can augment this by technology but can’t change rules 100%. Extrapolate to innovation/optimum peak performance, its not possible always to be more and more lean, lighter, faster and get better quality and innovation. We need to follow nature’s limits, nothing goes faster than light in this universe.

Continuous interaction, Disconnect fix, Innovation, Onsite Offshore Delivery, Software Delivery

Continuous interaction and collaboration rather than fixed time and schedule meetings

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Working over the years in the Information Technology industry I have learned that face to face interactions lead to success in delivery and innovation which are the important areas in this industry.

But this is the result of imperfect interactions from a distance. For this let us analyze what is a successful interaction:

  1. Successful interactions for good delivery and innovation are continuous in nature and not just fixed hours per week/day/month
  2. If we restrict ourselves to a very fixed schedule say every week or month we come with a very specific preset agenda and miss out on human emotions, behaviors, motivations and so on which also have a big role in success for delivery and innovation
  3. Face to face meetings add on top of the set agenda an aura of informal interactions around friendship, relationship, behaviors, emotions, motivation, what we like / dislike, etc.

To augment this from offshore for countries like USA & Europe and remove the disconnect better way would be to have continuous interaction.

Connect boardrooms, developer areas, testing team rooms, agile rooms, finance rooms, operations room via video conferencing and audio with a view of full team and area on live and continuous basis. Once you do that you remove the fixed agendas and schedules of meetings which cut out the soft side of human behavior, etc. which is only visible in a face to face conversation. This disconnect of fixed schedules and fixed time meetings can be overcome by continuous interactions. We already have continuous integration for delivery teams and AGILE as a model for delivery. Taking it to the next level would be continuous interaction between offshore and onsite.

Culture, Excellence, Innovation

Formula for Successful Innovation Driven Companies in IT industry

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There are many formulas to build a successful company:
1. Passion
2. Great investors and board with good mentors
3. Great product
4. Niche skills and services
5. Great legacy
6. Recruit the best, train them, mentor them, give them good career growth, etc.
And so on

But one that I have observed and learnt is another one. We won’t go into the discussion about the earlier ones given above but let’s look at another way to build excellence.

Excellence and innovation is driven by freedom, creativity, knowledge, skill and right intervention by management with positive re-enforcement, promotion of good attitude and removing the bad apples at the right time.

One of the primary enablers for this is less internal friction and a culture to deliver excellence, promotion of passion to perform and learn without unnecessary hindrance.

One of the best ways to do this is to find people in your core teams to go into the non core functions over time willingly and on their own. These people can build a culture that appreciates the problems of the majority core function employees.

An example, if you over time promote in any Information Technology company your core development/product team members via training, education, etc. into Finance, HR, Project Management, Support, PMO, Legal, Sales and other departments you will build a company that appreciates the problems that the core function faces and they will help/enable them which in turn results in innovation and culture of synergy with excellence.

This is not the only formula out their to build a great company but one of the many ways. Only when we perform as one unit do we succeed most of the times, don’t we?