Physically, the brain uses dopamine to create a ‘good’ feeling. This is normal and natural. Dopamine is a neurotransmitter, a chemical that the brain uses during its normal functioning. Drugs of addiction cause the brain’s cells to excrete and flood the brain with the chemical dopamine or conversely, block the chemical from being reabsorbed into the cells.

Almost like a drug once you attend TED you can’t stop having more & more. It’s almost like the curators at TED i.e. guys like Chris Anderson, Bruno, Lakshmi and even Bill Gates have figured out a way to induce Dopamine in the brains of the TEDsters without the ill effects of Ecstasy, Marijuana or Cocaine.

My TED journey started in 2009 with my first TED, TED India in the beautiful city of Mysore. Before going to the event I was skeptical and did not really know what to expect. I was wrong; TED has now become an important part of my life and almost like a pilgrimage. A holy journey which I undertake twice or thrice a year to experience god in the form of countless ideas and inspiration.

Since 2009, I have attended TED in Mysore, Oxford, Lavasa (INK), Long Beach and recently in Edinburgh and in aggregate witnessed over 250 unique talks and got to connect with over 2000 people; and I want more!

However at a cost roughly of $5k to $8k including travel, stay etc. It’s probably the most expensive single dose of a drug in the world.

Drugs or no-drugs here are five reasons why I am on a high and addicted:

1. Potpourri of People

TED is an event where you meet people from all over the world. TED
Global in Edinburgh had people from 70 countries. These are people young and old, rich and poor, men, women, humanoids and robots. Over the period of 3 -4 days your start making acquaintances and after a few TEDs you make friends. One reason which takes you back to TED is the urge to make new friends.

2. Ideas beyond the TED talks

TED speakers share amazing ideas and all these TED talks are available free online. So what is really the point of attending a physical TED event? Imagine worlds where there are no schools or universities the top teachers have recorded their lectures and all students are doing are logging online learning and giving tests. School is as much about shared learning from other students some of my most important lessons in life came from sitting with friends the school canteen and learning from experiences of our seniors. At a TED conference everyone has an idea to share, knowledge to give, opinion to make and life to change. All you have to do is ASK.

3. Humbling experience

Every person you meet at TED is smarter than you. You meet people who have dedicated their entire life to find the cure of for a rare disease,a bird from becoming extinct , invent technologies and gadgets which can save or enhance our lives, create amazing art & design, and even create Mushrooms which can eat you. However none of them have a chip on their shoulder, they are approachable, articulate and willing to spend time with everyone without any bias. The person sitting next to you maybe a Billionaire from Silicon Valley or a poor activist from Tunisia they all eat the same food, share the same space and are treated equal. It’s truly one of the most humbling experiences

4. Spa for your brain and soul

A typical spa applies oil, herbs on your body, all the parts of your body as massaged by one or multiple masseurs, body is exposed to cold and heady aromas and scents. The process which can last hours and repeated many days and practices like acupressure pricks needles in different points of your body which somehow works. TED does the same over a period of 4 days your brain is treated with about 70 ideas each massaged for 18 odd minutes, you listen to all kinds of music from western classical to modern hip-hop, you are then made to drink exotic teas, coffee and in Scotland whiskeys and party all night but are expected to be back the next day at 8:30 am once again. If your brain ever had a CPU utilization bar like your PC I can bet during TED it would be at the 99% mark. Also during this period randomly you hear ideas, words, sentences or notes of music which touch your soul. Anyone who experiences this would certainly kill for the next!

5. Surprise

Even though the format of TED is similar every year yet there is a lot of difference. The difference is really the element of surprise. In a world where we think we know it all, we are connected and have access to all the wisdom via the Internet you encounter things which your probable have never thought about before, causes you passionately want to support which you did not knew existed 18 minutes back and do things you thought you never could do, in my case eat bugs, which comes to the finally to the point on why am I really writing this post.

Think about it; if TED has become the ultimate drug how do you think. The Drug Cartels rewards its star drug peddlers! So if you comment on this and retweet, there is a big chance that I get my next fix for free!

U are Stupid! This was the most common sentence I heard for a long
time from friends, family and early investors when I used to describe
to them my weird plans on how gaming is going to be big in India. That
was in an era when PCs were just introduced to India....and no one had
even heard about the Internet.

And recently we all witnessed 3 Idiots become the biggest Indian
blockbuster. I thought there is really something special about Being
Stupid! I want to take you through 3 of my learnings on the same.

As a student if you ever try confronting your teacher about a
particular subject or tell your boss something in the business
strategy is missing or tell your parents that you want to be an artist
or join a band and not do an MBA or Engineering... You will most
likely be called Stupid. Most people fall into the trap and leave
there stupidity and go ahead and do what other smart people do. But
some of them who do stick to their stupid idea change the world.

There are thousands of examples from Galileo to Gandhi who were called
stupid but later termed as the biggest visionaries of their time. Let
me give you a recent example of Mark Pincus the founder of Zynga. When
I briefly met Mark over 2 years ago in Seattle he described to me that
his company was named after his dog and his plan was to dominate
gaming with very simple games like FarmVille and Mafia wars. Many
people including me thought his ideas were stupid and his games
mediocre in comparison to $100s of million dollars spend on console
games.... Well the rest is history and Zynga games are the most played
games in the WORLD.

So my first lesson is something very simple

A. If people call you Stupid, you are onto something BIG.

The other thing which goes along with stupidity is risk. Formal
education and traditional structures of society define limits and
paths for everything. 4Ps of marketing, DCF valuation, career paths
and they even have Murphy’s law as an explanation for when things go
wrong. there is always some formula or right method defined which
people more or less follow. Taking risks is bad.
and everybody is now talking about taking a Calculated Risk which
takes all the boundaries into consideration including a Plan B and
Plan C. However for a stupid person there is no Plan B or C since they
don’t have the burden of being in the box, they can think out of the
box and attempt and achieve what other people think is impossible.

Its more risky crossing the road, than swimming with the sharks,
however conventional wisdom will want you to take what is perceived as
a safe bet which according to me is actually very risky and by
crossing the road you end up as one among the millions who are doing
the same, verses the few who swim with the sharks. There is a
difference between knowing the path and walking the path.

I still remember in 2004 when I told my investors that we would spend
all our money to acquire the rights to Spider-man and release a game
worldwide ..they thought I was stupid betting the company, while I was
convinced that it’s Spiderman who would save the day....and no doubt
it became the best selling game of that time.
That brings me to my next lesson

B. It’s the stupid who swim with the sharks
When we talk about successful people whom we initially though were
stupid we somehow start talking about Passion. Whether it’s
entrepreneurs, sportsmen, artists or writers the most common word used
to define their success is passion.

So what really is passion? While most people look at the world through
numbers, formulas, research and charts, it is the gut feeling which
powers the decisions of the stupid, they look at things like
relationship and conviction and always really have no real logic to
defend their decisions. They are always optimistic about their plans.
They are not afraid to fail, as something worse than failure is not
trying.

Now if you are Steve Jobs people call you a visionary, but what powers
this irrational optimism in ordinary stupid people on their way to
greatness is what I would call passion. This is what makes them keep
trying even after the 100th failure with the same excitement

Hence my 3rd lesson is

C. Stupidity drives passion and Passion drives Stupidity

So whether it is a risk or a hunch or a gut feeling, if you know it
will work, ignore the voices you hear because soon instead of stupid
you will hear super, and go ahead and bet the farm, Be Stupid!

Having started my business career at the age of 16, I had a great
handicap, the handicap of not knowing many of the basic fundamentals
of business and finance. What I was doing during my early days could not
really be classified
as business. I would call it a way I had adapted, to keep paying for my
pocket money, a source of income I had created to fund my hobbies and
have fun with my friends.

In 1999, I was approached by a company which I thought was into plumbing
and water supply. They gave me a proposition which according to
them was irresistible. The company was Price Waterhouse Coopers and their
plan was to help me raise venture capital for my big ideas. Having not
knowing what venture capital was, I rejected their proposal to get me
‘a loan’. I only accepted to work with them when they told me venture
capital was like a loan I never had to return. And they would help me
make a business plan. Basically a spreadsheet which would help
investors see why my business is a great place to invest in and get
amazing returns.

After spending some time with the investment bankers they were able to
create probably the most complicated excel sheet I ever saw. It had
over 10 sheets all interlinked with each other, all the numbers would
change by changing just a few numbers on the master sheet. It had
graphs and columns which were in 2 currencies and was spread out to
cover 5 years of my grand vision. I was told to quickly mug-up some
numbers for the meetings and nod my head at certain points of the
presentation. And since I was really great at Q & A and BS, voila my
first business plan was ready at the age of 22.

I was amazed to see how all the major VCs who saw my plans were
getting super excited on the business plan. Some even took copies of
the excel sheet and added their own columns and connected sheets to
it. Soon I was looking at term sheets from multiple investors with
many complex formulas and terms which I had not heard from Adams.
That was the time I had to hire a lawyer.. I quickly found one in the
bowling alley- a senior in college, Somashekhar (Soma) Sundereshan who
had just completed his law studies and was a qualified lawyer, just the
trusted friend I needed.

Having no understanding of what valuations, cap table, liquidation
preference and just a basic concept in mind that I am going to get all
the money in the world to fulfill my dreams. It was a easy negotiation.
I agreed to all the terms after Soma explained me one concept - the
investors won’t screw me till I do my job well!

Ever since my first business plan I had made many such business plans
and even without fully understanding the plan have not only achieved
them but in certain cases exceed them.. Now you will ask me how?

A. Compass and not a navigational map
For me the business plan was always more of a compass which guided me
towards the general direction I should take in case I got lost, ask
strangers and make the journey to turn the business plan a great
adventure. It was not perfect but I got there. Most people in my
opinion take the business plan to be some kind of a Google
map which would take them to their destination forgetting that
business is an uncertain terrain which not even Google has mapped!

B. People and not numbers
Happy and motivated employees and satisfied customers is what it takes
to make a great business. Companies which are run by accountants and
managers who measure everything on numbers IMHO are average not best.
People are not robots, they respond more to emotion and not process.
Excessive processes can KILL your people and make them just head counts.

C. GUT not the BRAIN
Gut is my primary brain and has the power to override the confusions
and uncertainty which complex plans bring to the table looking
at large historic data. In fact it’s the GUT which gives an entrepreneur his
vision and the ability to see into the future. Unfortunately in our
current business environment gut calls are a taboo and business plans
are credible if presented with past research and predictions by some
stupid research agency. Businesses have only been able to be
successful by GUT calls....

D. Trust v/s qualifications
Many a times you have to make choices in business based on advice from
people who are extremely qualified in their jobs and people who may
not be as qualified but are people you trust. While it may sound
counter intuitive but business is about balancing both and it’s
important to have both sets of people around you and let your gut take
the final call. However on pure personal preference I tend to always
go by people whom I trust.

E. Journey not the destination
Running a business is a journey. Every time even before a goal is
reached another impossible goal is set this is what keeps people
excited and going forward. For people whom business is all about
making money, they surely get successful in the short run but are
really never able to go beyond the initial success. A business which
claims it has met all its goals has failed!

F. Story not a Formula
A successful company is always a story. A story of ups and downs, a
story of fights and friendships, a story of how you did the
impossible, a story of patience and passion. No two stories are alike.
There are many authors and management consultants who try and make
successful businesses into formulas and many young entrepreneurs make
the mistake of applying such formulas to their businesses with
disastrous results. If there was any truth in these formulas by now
we would have had numerous Googles, GEs, Apples and Bhartis. Therefore
think of your business like a never ending story and not a finite
formula.

G. Relationships and not deals
The biggest currency a business and an entrepreneur has is
relationship. Business is not all about deals, it’s not about winning
or loosing. Sometimes you have to lose to win and sometimes you have
to win to lose. A lot of companies and their managers get so
arrogant with their success that for them every partner and customer
they are dealing with has to work on their most unreasonable terms.
Even though most of the people for no other choice start working with
these companies, the bottom-line is they will be the first to desert
these companies the minute they get a glimpse of an alternate
choice. Companies are doing only one sided deals without giving a
win-win situation to the person on the other side thus failing to build
a relationship. In your toughest and best times, it’s these relationships
that count.

When I started, I was naive and probably that is what got me here. If I too was a MBA or Accountant I would have been still digging my
heals on some spreadsheet creating crappy businesses.

In each and every deal, the losers got the shorter end of the stick and being treated unfairly was the rule, not the exception.

Have you looked around your father’s generation? Many of them were with the same company for 25 years with little growth, while all those companies and their so called ‘Seths’ grew richer and richer.

Culture of win-lose

A lot has changed in India over the past 20 years. Unfortunately, the culture of win-lose has only grown and we now have a new breed of ‘Seths’, far sophisticated and ruthless and extending the win-lose proposition to their employees, their investors and their customers (the losers). However, as long as these ‘losers’ get benefits, though disproportionate, somehow they are very happy.

The bonus and compensation structure for MNC employees in India is mostly different (read lower) than their counterparts doing the same job in other territories. I am not comparing India and the US, say, compare with China or Brazil. The Indian stock markets are full of companies where promoters mess up their shareholders but as long as they make ‘some’ money for the shareholders, they are made into poster boys.

At the same time, employees are used to accepting things, moving to the next winner who can pay them more than the last winner they worked for... forgetting the fact that they are still losers.

Our education system is not helping either. In the past, there were few top Management and Engineering colleges and the quality of these students was outstanding. Today, however, anyone with half-a-brain spends lakhs of rupees on private MBA institutes thinking this is going to turn them into winners... However, in reality they are the losers.

Winning factors

So how can a loser be a winner? Generally, higher education, family status, and a comfortable job are the things that make you lazy...The path is clear — you would join a big company as a Manager, join your family business and take up a well-charted career path as presented to you by a professor or a text book. You do the predictable and as part of the predictable, being part of a win-lose situation is absolutely normal. All these people end up in generally good situations but good is the enemy of best and they do not end up achieving the super success they are capable of, while they are successful by normal definition.

A loser is someone who is always bottom in his class, drops out of school or college, is not as good at academics, or ‘slow’ in a job. But I believe these so-called losers have the best chance of becoming the super winner. Let me explain why.

You have nothing to lose: Being a loser gives you a great advantage, the advantage of being able to take risks and bigger risks... They can be very disruptive as status quo has already rejected them.

Dummed down by education: Once you study MBA or engineering, you are trained to use centuries-old conventional wisdom to apply to modern day situations.

While this is great if you are going to run traditional businesses, however, to disrupt, you have to challenge these very traditional norms... I feel being a loser gives you this great advantage.

Team player: If you are on top of your class or work you are very competitive and normally always try to make friends with people of higher authority, such as your teacher, or principal or boss. But if you are a loser, your friends are your best support. It’s not uncommon to see a bunch of losers together, but have you ever seen a bunch of smart people together?

Unfounded passion: Winners normally have a path worked out for them by the system. They become managers, doctors, engineers and fit into the moulds created by society. However, a loser cannot excel in any normal thing and would be a disaster with the traditional jobs. However, if and a big if ....this loser is able to figure out what he is really passionate about — it could be anything and if he is able to use his risk taking ability, with his disruptive powers and team skills towards his passion, that is what creates a super achiever....

Take any story of Dhirubhai Ambani, Bill Gates, Steve Jobs, Laxmi Mittal, Sunil Bharti Mittal and many such examples and you would know what I am saying....

So, in today’s India, I am proud to be a Loser!

At the later date Johnny arrived for the meeting and started discussing with my colleague I joined the meeting in a little while. Johnny had some aggressive plans he was going to grow his business to a top line of Rs. 13 Cr (approx $3m) and a net profit of Rs. 6 Cr (approx $1.3m) surely an exciting business. And in three years he was going to build a Rs.3000 Cr ($600m) revenue company. He had acquired 300 customers in the past 4-5 months with a team of 2-3 people and his plan was to acquire 13,000 customers in the year which would get him to this revenue and bottom line. Johnny spoke non-stop and was hundred percent confident that he is going to hit the numbers. Therefore I had to ask him the basic question on why does he need funding as looks like the way he has bootstrapped he could continue the same. Instead of answering this question he went on and on about how much his customers love him, he started talking abut customer case studies, I had to interrupt him and ask him the same question to which after beating around the bush a million times he answered that currently the 300 customers he acquired were offered the service for Free and he plans to start charging a free of Rs.2,500 ($50) per customer soon. To much my logical next question was could he walk me through his customer acquisition process and cost. He once again went off on a tangent talking about his passion, how he knows he is going to succeed etc etc. I pulled him back to answer the question. He explained that he has 3 people in acquisition who make 2 sales a day each and hence he is budgeted 50 sales per person (assuming 25 days) and said he plans to ramp up the team to 30 people. I told him at 30 people he can maximum expect is 1500 per month but that’s on a free model, how much has he estimated the sales to be on a paid model. He once again went on a tangent and started talking about his unique concept and how no one else is doing it and how a few other companies who are in similar space just don’t have the capability to execute what he has done. This time I had to tell him PLEASE ANSWER THE QUESTION and not go into stories to which he answered that the answers to my questions required explanation and were not that straightforward. This was the first time both of us raised our voices..

I then asked him what is his current revenues a fairly basic and straight forward question to which he once again started spinning a yarn. And finally said his revenues are Rs. 0.8m in April and Rs. 1.8m in May and he had no idea what would they be in June. I asked him how does he realize his revenue ... he got offended to this question and asked me if I don’t believe his word. However my point was how is the revenue booked after probing him for 15 mins he finally said that in April while he has made sales of Rs.0.8m his customers have only made a booking of that amount and are expected to only pay in June and therefore his real sales in only Rs.50,000 and he had a similar story for the subsequent months.

He said that his current sales conversion percentage is 85% and he believes once he makes it paid service it would go down to 50% to 60% and hence he was looking for funding. I was shocked and surprised as I had never seen that kind of conversion percentages in any business in my life. I asked him what data does he have to back a ridiculous conversion percentage like his. He had none he best he could come up was that he personally made 60 calls and sold almost 45 (free) he is confident enough that he is going to achieve his numbers. I could see his temper was rising...

I once again asked him that to me he is talking of going from Rs.50,000 to Rs.130 m in 1 year and at a conversion percentage of 50% from lead to paid on a new business model... that seems to be very risky proposition. This time he lost it and started lecturing me on how i have no understanding of his business and I should not pass judgments on this plan and all I am saying is all crap. Seeing the situation go out of hand my colleague intervened and told Johnny that he needs to learn to listen and back his assumptions with data or examples on how it can work. We cannot invest in businesses where all the assumptions are based on fiction and not facts. To which he once again went on a loop on how he has Mr.X , Mr Y and Mr. Z as his advisers and based on their advice he made many changes in his business plan. I asked him to name 5 major changes he did in his plan based on external advice after a lot of thinking he could come-up with 2 major changes i.e Start giving his product for Free initially and once established start charging, target the right customer to whom he should sell the product instead on going on a blind database. I burst out laughing since this was the most basic advice which one get on any business and I then asked him that we normally invest in businesses where we can actively mentor and advice companies and given our discussion so far did ht think we can add any value.

That’s when the shit hit the fan! he started shouting on top of his voice and declared that he is going to be India’s youngest billionaire at any cost and is one of the smartest person on the block and I have no clue on the business and have not been able to see his vision and that I will be a big looser if I don’t invest in him. The then said that given the line of questioning I took him through he doesn’t think i can add any value to his business and I don’t DESERVE to be an investor in the business. Now this was bizarre and I said enough is enough and told him thank you we don’t intend to invest in his business MAX and he can go.

From being a hot pot he suddenly became cold and calm and wanted to continue talking. I told him 2 more times that he can go but this dude refused to leave the room. And he replied to me that I can leave the room and he will continue to discuss this further with my colleague. It was clear in my mind that Johnny’s passion has made him insane and he looked at me and my colleague as a threat to his being India’s youngest billionaire dream Finally I had to tell him that if he doesn’t leave I am going to call the security...... and thank god finally he left.

While me and my colleague are still recovering from the shock and are thinking of hiring private security guards to save ourselves from entrepreneur’s who’s business we would have not invested in or asked them many a questions the biggest question I have in my mind is that are entrepreneurs like Johnny the reason why VCs and investors are not as hot on the startup space. Is the mentoring provided in India not good enough for entrepreneurs to get basic business concept right. Do entrepreneurs take rejection from investors so badly to the point they can loose their mental balance or become a threat to the person on the other side. I am sure any investor who meets entrepreneurs like Johnny may become vary of touching startups with a bargepole... however as it is said that a diamond is find in a coal mine and as part of the process you have to dig out the dirt. So are far as I am concerned I am looking forward to meet many Johnny till I find my Mark... which according to a dear friend of mine is co-incidentally is the most successful first name in the valley for successful entrepreneurs Mark Anderson, Mark Pincus, Mark Zuckerberg ...

The brains of the VC’s are wired differently and startups should know how to deal with them.

A venture capitalist is a person who invests in a business , providing capital either for start-up or growth. Venture capitalists aim for a higher rate of return than would be given by more traditional investments. My years of interactions with VC’s have made me come to a conclusion that their brains are certainly wired differently. Just like entrepreneurs demonstrate certain common traits across the world VCs have certain traits. And when it comes to India I think the breed goes through another generation of transformation. To help entrepreneurs and startups better understand how to deal with the complex brains of the Indian VCs, I have put together my version of their brain map. Of course this is generic and there are many exceptions to the rule.

EGO
Being a VC in an emerging markets like India is like being a VIP. You are at a very high pay scale, constantly being pitched by smart entrepreneurs, called to give speeches at every
major conference. At business plan events they are almost mobbed and receive endless amounts of emails, phone calls, SMS most of them trying to desperately convince them into liking them. They meet CEOs of top companies, are in influential company boards, and get an ego massage
from everyone who meets them, what a great tie! I like your hair style, i love that advice you gave me, that investment of yours is the next Facebook are very common compliments. Its but natural for any human who is living in an environment like this to develop a bit of an EGO. Its really complex dealing with such people and you too can easily get into the EGO massaging mode. However I think what really works with VC’s is being real and challenge them, question them and you dont have to agree with them on everything and deal with them like a real person.

Valuation
Industry multiples, PE ratios, Fair Valuation, value of intangible assets, value per subscriber, value per eyeball, value per friend in social network the VC’s are valuation geeks. Constantly reading long reports from Morgan Stanly, Goldman Sachs etc and since their business is to invest at a low valuation and exit at a high valuation they seem to be in a constant valuation mode. Many VCs have a formal year valuation exercise for their portfolio and their bonuses and valuations are linked to this. Even though the VC’s know that most of the valuation is theoretical unless there is a clear cash exit in a company. They would spend months negotiating a valuation which they believe is true. Normally the number is very low if they are investing in a company and the numbers flips to be very high when they are in selling mode. Its very tricky working with VCs on valuation as I have seen many deals fall apart of valuation and its best to bring this up fairly quick if you are in a detailed engagement with a VC the difference could be a lot.

Attention Span
Stop looking at websites and MBA books which told you how to make and present business plans. The world has moved on and today a VC is constantly pitched with plans, ideas, tweets, Facebook status messages, blackberry messenger messages and dosen’t really have the
attention span or time to go through 45 mins. of a 50 slide power point slide. Don’t get me wrong they will certainly sit through the 45 mins of presentation but in about 10 mins fingering his blackberry or playing brick breaker. So it is important for you to work on 30seconds and 10 minute elevator pitches and see how you can really explain your business in a matter of tweets. PowerPoint is becoming more and more pointless.

Buzz
VCs always tend to react to the current buzz. If the last big acquisition was in the cloud application space they would suddenly start looking at cloud investments. If a high profile investor or entrepreneur invests in a segment that becomes the flavor of the month and as most VCs react to trends and buzz its easy to assume that they are following the herd mentality. However there always seems to be some kind of strategy in this herd mentality. VCs bet on 3-4 players in any given segment and space. Therefore a smart entrepreneur would focus on catching on the buzz early on and hit the VC at the right time with his plan. The buzz has a very short life and in no time the VC would move to the next trend.

Disclaimer
A typical VC is highly educated normally with a PhD or MBA degree, they are well read, traveled and even though most of them have not run any real businesses these business fundamentals are solid. When they start liking a company they are most forthcoming with ideas as part of
their poking holes in the business plan process. However the biggest mistake any entrepreneur could do is take these ideas at face value. VCs are quick to disclaim any advice they provide and the basic rule is if you get screwed by the advice they would shrug off saying that they did not have enough inputs and if you succeed they will be the first to take all the credit.

Questions
VCs are nothing but sophisticated detectives. Probing is their first nature and to question everything is their motto. It is generally a very good sign if a VC starts probing and questioning your business plan. They can ask the the most basic to the most complex questions and ask the
same questions again and again almost like a 3 year old. However it is important that as an entrepreneur you answer each of the question hopefully with the same answer and the
same passion. In most cases VCs are doing this not because they don’t know the answer but more to understand the entrepreneurs though process and find possible chinks in the armor.

Management talks
VCs love Management jargon’s, geek talk and case studies. Since most of them have spent a large part of their past lives in management schools, technical institutes and later on in investment banks and financial world, they love when people use these Jargon’s as part of
their pitch they feel that their are in familiar territory and your information gets a lot more credibility. They love case studies as it gives them an opportunity to apply their theories at a much smaller scale and see how most of what they learn at school is actually used in business. They also love complex deal structures and excel sheets were every cell is linked to 500 other cells and formulas all over.

Scale
VCs exist because they believe that businesses can scale and if the VC can identify such companies in their growth curve they can make a lot of money. Therefore its very important for any entrepreneur to demonstrate how the business can scale. VCs are known to walk out of
deals where companies had a good topline and great margins but they operated in business verticals which according to the VCs represent a small market or are difficult to scale. There are many entrepreneurs who run absolutely great and profitable businesses but don’t seem to
understand why VCs are not looking at their business.

Exit
If a VC had to visit a movie theater he would get more excited by the huge red EXIT signs than the movie itself. Exits is what they live for, this is what gets them their billions and completes their sense of purpose. A VC would talk to you more about his exits than anything else. It is natural that before your chat with the VC do good research on his past exits. And in your chat if you can make positive reference of your plan with that exit you may just have that aha! moment with the VC. And if for any reason the VC sees no exit in your company he would be the first one
to walk-out of the deal.

Domain Knowledge
VCs end-up becoming jack of all trades they look at so many business plans from various industries, they are in boards of half a dozen companies. They have the best macro level knowledge across domains but its only when you scratch the surface that you realize. But I think
this is actually a strength of the VCs, smart VCs would always relay on entrepreneurs to know their domains well and relay on the entrepreneur to take operational decisions. However, the danger is if the VCs decides to apply his domain knowledge on a business.

Silicon Valley
VC’s love Silicon Valley most of them have their HQ in Palo Alto or Menlo Park. Its this small stretch of land which is responsible for bringing to the world- startups like Google, Facebook, Twitter, Yahoo etc. VCs are obsessed with the Valley they are constantly trying to find out what is happening there, what are the hot startups, domains and tech gossip. Its not wrong to say that most of them who operate outside of the valley have a Silicon Valley hangover. Therefore during
your talks with them giving silicon valley examples, talking about the the valley and generally showing that you too are clued on the what is happening in the valley helps a lot. Even though this may not have any co-relation or impact on the local market conditions or business this is undoubtedly the biggest influence.

Beating around the bush
In the past many business plans which were rejected by VCs become billion dollar success stories and currently while a VC would not like your business in many cases they would never say NO. It is very hard to get any direct answer or feedback out of the VCs unless your plan is absolutely pointless and you have to relay on other cues which includes no answers to emails or phone calls and statements like they are currently busy closing another deal, or they love your company but have another investment in similar space, or they would like to see the company at a later stage currently it doesn’t fit their deal size, they don’t have the bandwidth to do more deals now etc. etc. It is not really their fault as they are in a business where they cannot really
afford to close the door on anyone. For entrepreneurs who don’t get this it could mean a lot of frustration and loss of time.

Risk talking ability
On the surface the investments made by VC’s in companies seem very high risky but the reality is quiet different. VC’s make investments only after detailed business diligence, they like to get comfortable with the management team and work with a battery of lawyers, auditors, analysts etc. before funding any company. They have special rights as a shareholder and all major decisions require their approval. So if you have a very high risk business plan best if to approach friends or family.

Finally dealing with VCs is a complex process while the above rules would apply to most of them there are many entrepreneur turn VCs who’s brains are wired completely differently and like everything there are exceptions to the rule and a lot of these VCs have small corporate or
individual angel funds. This brings me to my last point which is still unconfined i.e most of the VC turned Angels have, 666 the gesture of the satanic salute to the devil! don’t you agree?

NASSCOM the premier software body of India is once again organizing the NASSCOM India Leadership Forum 2010. Overall a great conference, mostly attended by senior level executives of most top software companies of India, global Industry leaders,CEOs, Entrepreneurs etc.

Outlined are few of my observations related to how Indian IT Leaders are adapting to social media and traditional email :-

a. Paper Email :Its common to see most of the senior managers of these IT companies in business class of airlines browsing through files and files of printed emails which they are rapidly writing some notes on. These notes are then passed on to their secretaries who would neatly type out and reply to those emails. When I asked an ‘insider’ he told me that this is a well know practice by the ‘old school’ senior management of these companies... What do they do with the fancy blackberries and email technology which they supposedly build for others and why wast so much paper.

b. Blog PR Stunt : Case in point Indias biggest software company Infosys has a blog the most popular post has 7 comments and 5 tweets. Now a company as big as Infosys with hundreds of thousands of employees its hard to imagine that only 7 people in the entire company had anything to say about this. even after some amount of googling i could not find official blogs of most of the IT companies or ceo’s of the top IT companies.

c. Twitter : You have to see the Twitter Page of TCS to believe it. Someone in their PR department thought it was a good idea to take the entire Investor Call and past it in form of tweets... even a 10 year old can tell you how to use twitter...

d. Facebook = faceless once again i could not find much in Facebook about these companies. TCS has an official facebook page looks like the last time someone looked at it from TCS was in the last century..

e. LinkedIn = could not find a single job posting from the major Indian IT companies in Linkedin . Microsoft is advertising 59 jobs, Cisco 122, HP 47, Google 571 Jobs... however Linkedin has the highest base of Indians on its social network.

Well the point I am really trying to making is that as the world evolves to social media and technology is moving at a rapid speed. It will be encouraging to see the TOP IT companies of India adapt and change and as most of the change starts from the top I would urge CEO’s of these companies to JAAGO RE...and invest their personal time along with their senior management and not leave this to some junior PR or Marketing person who will get you a #FAIL

This is surely one SOCIAL Cause which the Indian IT Leaders should Wake UP to.

PS. There are certainly few exceptions Anand Mahindra, Ganesh Natrajan who completely get this and if you have any other names kindly add to the comments with links to their blogs/tweets etc. Similarly there are companies in the non IT space which have even worst social media plans...but the idea is atleast the IT Guys must eat their own dog food.

India has witnessed a tremendous growth in its media and entertainment business. In the past decade, we have seen the growth of billion dollar home grown media conglomerates like Network 18, Zee, UTV, Reliance ADA, Yash Raj, NDTV, Bennet & Colmen, and Hindustan Times to name a few. At the same time the foreign players too have done extremely well either directly like Star TV or via investments and partnerships with local players. Today Disney, Viacom, Turner, Sony, you name it and they have a large presence in the Media and entertainment business. When it comes to Television, Newspapers, Magazine, Sports, Movies, Theaters, DTH and entertaining over 700 million people in India, these companies rock.

However, one area where none of these companies have been able to make a dent is the Internet and New Media space. Leaving a few exceptions in most cases, Internet and New Media ventures of these companies have been a complete disaster. And it’s not that these companies have been not spending enough money or time on the space. I think in aggregate, all the Indian media companies put together over the last 5 years would have invested between $300-$500 million in the space but the result is, we have an online advertising market dominated by Google (over 60% market share), the mobile operators are taking away majority of the moola when it comes to VAS revenue, ecommerce is dominated by players like Ebay, jobs is Naukri, matrimonial is Shaadi, gaming is Indiagames :-), VAS is Onmobile to name a few. There are tons of examples like Makemytrip, Cleartrip, Hungama, Sulekha, Justdial, Rajshri, Rediff , Smsgupshup, who have dominated their respective sectors even though they had to compete head-on with competition with large media companies who had companies in the same space, with high capital, technology and ‘quality people’.

I wonder if these big media companies will ever understand the real reason for this situation and continue to fund their internet ventures by replacing the CEO with an even more expensive CEO who will rubbish all the past strategies and invest another $20m in marketing and brand repositioning :-)

Having interacted with a number of such companies here is my take:

Large Media Companies STRONGLY believe:
1. That they have the ability to create ICONIC brands with the help of their media power and it’s the BRAND which is everything.
2. By hiring somebody from Google, Microsoft, Rediff, Yahoo, Facebook, ebay, or Amazon, to head their business they can build a business equally successful as these companies.
3. By poaching an entire sales and creative team of a startup competitor by offering them triple the salary, they can overnight wipe out competition.
4. By investing millions of dollars on server farms, high end technology from Microsoft, Complex CMS and video solutions, Oracle, SAP they can have a super competitive edge over a startup competitor who is mostly using (cheap) open source software.
5. By offering something FREE over what a startup competitor is charging for they can kill competition.
6. By Exclusive content, movie stars, prizes, tickets and every possible incentive they can make customers switch to their brand.
7. Using their Television, News and other media vehicles they can create enough PR to create viral effect.
8. They have piles of cash and unlimited resources over a startup who is constantly scavenging for funds and resources. That startup will DIE someday on its own.
9. The value of these startups is very high because of the stupid VC investors in the company. Actually, these startups are worth a lot less and one day they will buy it for peanuts or hire the founders as their employees.
10. They can always sell Internet and Online inventories as a bundle with their Television and Print inventories.
11. ESOPS in their media companies are worth a lot more than STOCK in some arbit startup with no revenues and cash.

While the reality for Startup Internet and New Media ventures is quiet the reverse:

1. Most startups were able to build brands with very little marketing spend but more on innovation and word of mouth on the strength of their product.
2. Founders and core teams of startups are driven by ‘PASSION’ and not just ‘MONEY’. Hiring a CEO with a $200k package and saying he is passionate is quiet a joke. Most founders take huge salary cuts over their last jobs.
3. Being low on resources actually drives startup teams to deliver a lot more as they now have to go the same distance with lesser cash. In fact, having too much cash is not good for an early stage business :-)
4. Open source solutions perform better, faster and have proven to be more stable than the expensive ones... a startup with no cash understands this and is forced to find the most cost effective solutions.
5. Having VC’s investors who look at investments very objectively is a boon to startups. As they are able to spend a lot of time mentoring the startups and at the same time if the startup is going nowhere they are unemotional about this and can ‘pull the plug’ anytime. This is a big motivation/scare for a startup team, which once again drives them to perform. Over a media company startup where irrespective of the ‘division’ making or not making business plan the media company can never really pull the plug...since there is a lot more at stake, including stock market expectations, face etc.
6. One of the worst things any startup can do is to hire some heavy hitter from a successful company like Google or Microsoft (unless he is willing to join at a huge discount to his salary with stock in the startup). The concept is simple when you are with Google, Facebook, Rediff and Microsoft you are not doing any selling at all. The product demand is created by the product itself, it is designed developed and managed by the masters in America and your role largely is to create fancy presentations, graphs, business plans, paperwork, strategy and keep the firang bosses happy. That is why these managers do very well at media companies since they can always create a great strategy document and why the last strategy they made did not work.
7. Startups are fast in responding to situations, changing course, modifying business models, modifying product and respond to customer situations. The corporate structures of most media companies make any major change an exercise for which they would require a board approval.
8. The hunger to win, the fire in the belly, aggressive, passion, dedication and terms you would normally associate with a startup how many times can you use these terms for a Media Company startup?
9. Finally, for a startup team there is a lot more at stake. It’s not a job they are doing... which a media company CEO and team can change 4 jobs in one year and no one will blink an eyelid.

So, if these are the facts, why do we still see more and more media companies pumping money in their Internet ventures verses investing in startups or acquire startup companies?

A lot of this I think can be attributed to the early stage our new media industry is in and slow development of the startup ecosystem in India. The good news is that media companies are owned and run by some very intelligent entrepreneurs themselves. I believe that in the next 18-24 months, many of these companies will have no option but to get into an active startup investment/acquisition mode as their counterparts in the west had to do. There had been many examples in the west where establish media companies made the same mistakes in the early 2000 and now we are seeing ventures like Hulu and their participation in early stage startup funds where they don’t want 51% stake in the company but operate like a strategic VC fund and at the right time happy to acquire the company. Sony, Cisco, Google, Microsoft, News Corp, Disney, Electronic Arts, Facebook, Time Warner and many others have largely got into new media ventures by aligning with successful startups.

Will this happen in India?

PS:- I think I have opened a can of worms but have to make an important disclosure that before writing this post I had 20 shots of vodka and was watching some crappy saas bahu show on TV and lost a game of T20 Fever to some guy called ‘BIG Daddy’.

I must admit I too was suffering from the soda bottle effect, where initially it was all the bubble fizz of agitation but slowly things started to settle down and life got back to normal and 26/11 became a phrase Indian’s started to use with a bit of ‘pride’ it was India’s 9/11 and became a much popular topic of discussion whenever I met friends and business associations abroad.

few months post the 26.11 massacre, we received an interesting email and phone call from Bihar, a kid claiming to be a game developer and wanting to meet us to discuss a proposal. We took it lightly however we did agree to meet the kid in person to see what he has. The first meeting was conducted by Sachin Janghel our Technology Head, Samir Bangara our COO and Reena George our Head of Human Resources. They were so impressed that they wanted me to meet the kid. When I first saw Shivam Gupta, I saw this timid little boy, with a smile, a bit nervous who had come along with his dad Mr. Gupta. Initially Mr. Gupta, who is a school teacher in a government school, initially did all the talking. And told us about Shivam’s love for gaming, animation and how he is surfing the internet and learning all these new technologies. The further explained us about a medical condition Shivam is suffering called, ‘Klippel-Trenaunay Syndrome’( http://k-t.org/) where one half of his body is growing faster than the other, the first such medical case in India. He showed us medical reports and talked about the help he is receiving from experts in India and all over the world in treating Shivam. His dad is making sure that since gaming & game development seems to be his son’s passion, he is making every possible effort to get this son to meet us at Indiagames. It was a touching story but still we were skeptical what kind of game could a 13 year old kid make? He comes from Patna a city in Bihar, he can’t even speak fluent English, he did show us some demos which he claimed he developed, but anyone can download stuff from the internet and say he made it, I thought maybe we will give him some pep-talk and let him go.

However I let our senior programmers and designer interview him to see what this kid really knows. The interview shockingly lasted a few hours and post that the response I got from my team was ‘This Kid possibly knows as much as some of our trained programmers’. Now I was not expecting this, we immediately had an internal meeting and decided that we will do everything to support and help Shivam to fulfill his dream of becoming a games programmer. He was introduced to Varun Bhavnani our lead game designer who along with Sachin Janghel our Director of Technology set to work. Their task was to come up with a game which Shivam wanted to develop. Shivam worked from his home in Patna in between going to school and was connected with our team over email, phone, chat etc.

Fast forward 2 months. Shivam reverted to us with an idea to develop a game on The Mumbai Terror Attacks of 26/11 where you get the play a NSG commando wherein the objective was to fight terrorists and rescue the hostages, re-enacting history. His idea was that since millions of people sat helplessly sitting in front of TV sets the terrorists killing innocent people, he wanted to enable a common citizen an ability to take on the terrorist and at the same time remind people about the Mumbai Terror Attacks. Suddenly my thoughts went back straight to 26/11 and the soda bottle effect. I thought young Shivam has come up with a unique idea in the era of social media and power to the crowd, enabling millions of people to virtually experience the 26/11 incident with an ability to save innocents life would clearly be appreciated by one and all. At the same time the terrorists and bad guys across the world will get the message that even a 13year old kid in India has the imagination and idea to take on these evil men. We immediately green lit the project and the funding for the same. Shivam guided by Varun our lead designer started work on a 3D game to be made available online free of cost. All the programming work was done by Shivam from his home in Patna and he made a few trips to Mumbai to gain feedback from us on how he could turn it better and better. We then thought why not develop a 2D mobile game along the same lines to get a ‘Mass effect’ to nurture this child’s perception, also since we wanted to make sure this game is available as widely as possible

Both games are in hardcore development and we are all set to release it in January. However we thought wouldn’t 26.11.09 be the ideal day to unveil this grand and ambitious project conceived and developed by Shivam possibly the world’s youngest game programmer. Shivam despite all his health issues, his modest background, limited finances & small city upbringing has the courage to dream big and work towards it. I and my team are honored to be part of Shivams grand project. I started my career with a game on the Kargil War, made Yoddha both targeted against terrorism. And I believe with this game and significant contribution towards Shivam’s passion I have grown as an individual, a father and a friend.

I bow my head in respect and regards to Mr D.K Gupta, Shivam’s father who has extended his whole hearted support to Shivam, Mr. Gupta took leave from teaching and stood by Shivam’s side all the time, encouraging Shivam, provided him financial support with his limited income, took him to all the doctors to treat his condition, and unlike other parents who would normally shrug a kids interest in sports, arts or gaming, he has taken Shivam to tread the path which will make everyone in the world proud of him.

“All men dream, but not equally. Those who dream by night in the dusty recesses of their minds wake up in the day to find that it was vanity; but the dreamers of the day are dangerous men, for they act on their dream with open eyes, to make it possible.”

For the past 10 years i have attended over 100 conferences in India and abroad. In most cases while others paid hundreds of dollars to attend. I used Juggad and almost always got in for free mostly being a speaker. The format for attending such conferences became quiet standard. Before the conference you setup number of meetings with people you know. Attend the keynote speech where you meet many random but sometimes important people. Setup more meetings with them.

Its almost like a jungle where different animals are looking for different prey. Startups looking for investors, established companies looking for business, many looking for jobs, everyone seems to be having a different agenda and the conference is just an excuse for everyone to get together under one roof.

Most sessions have thin attendance, mostly consisting of journalists organizers people from your company and few competitors .huge round tables with few chairs around them are kept to make the room feel full.. I think some of them have also started using recorded applause :-)

the only place were you meet people is the cocktail party and dinner reception but soon realize that there are six such parties going on and most people are juggling between the parties to hunt for prey.

The sessions itself are boring and mostly nothing but corporate marketing pitches and the panels get really bad when each of the panelists makes a ppt slide instead of discussing the topic at hand.

When i heard about ted happening in India for the first time. I was all excited another big conference circus. When the official website was launched i couldn’t believe what i saw..it had little info on the speakers or content.. A huge photo of infosys ex.ceo nandan and they were asking for applications based on which they will decide to let you in and the cost.. A whooping $2500. This officially became the most expensive 2 1/2 conference in India. The $2500 included food airport transfer and stay at infosys campus in mysore.

I first thought it was a mistake and some one added a zero to $250 well how much could food and stay cost in infosys campus in mysore. (assuming they gave it free) and the organizers are gone nuts..

However having watches the ted videos online. My simple ideas was if these videos which i have watched for free can give me so much knowledge and inspiration, getting to meet some of those speakers and being able to exchange notes with even one of them would be worth $2500

reluctantly i filled a 3 page form with all kinds of questions and soon got a seal of approval from the organizers and i finally paid the $2500 with no idea what to really expect. I convinced myself by Calling it a gamble..

Fast forward to when i reach the Infosys campus on day 1 of the event. The registration process was super fast and smooth i checked into my room fast and in no time was roaming in the Infosys campus.

I must say there was something about the atmosphere which was electrifying i could see hundreds of people from different counties, some in formal suits, some in t-shirts and shorts all intermingling with each other. While the softbot army of Infosys was zombie marching across the campus..guided by smart guards with whistles.

The night started with a gala dinner at some palace where we were taken in buses. Saw a lot of familiar faces there mostly venture capitalists, successful silicon valley entrepreneurs, consultant and investor banker types, successful Indian entrepreneurs, senior corporate executives, you could not miss the huge Google presence, industrialists and people from the media. But the striking difference was when i saw many bloggers, twittes, newspaper tycoon, startup entrepreneurs, artist types, professors and musicians.

Now that was different.

The dinner was nice the wine was flowing and i had quality interactions with prof hans, a classical piano player, an industrialist who wanted to use gaming for developing skills in illiterate peope, abhay deol who bashed me on why film contracts are one sided :-), Chris Anderson the organizer of ted & a young film maker from Cairo. Now that was some time well spent.

You will soon be able to see videos of about 50 sessions which were delivered at TED online but what you will not see in those videos was the electrifying energy in the room, the sparks which were flying amongst the Potpourri of people from very diverse backgrounds. I started by thinking oh i will attend a few sessions but ended up attending each and every session 100% during the course of the 2 1/2 days. In each session I made sure I sat next to a new person and once again managed to spend time with a technologist, a wine expert, senior bureaucrat, an entrepreneur, a doctor from New Zealand, a MIT graduate, a social entrepreneur just to name a few.

The dinner events made a good setting to interact with many others net net... unlike other events where you meet the same set of people talking about the same boring stuff, at TED India it is fresh...I met new people, made new friends, gained knowledge from bells, to bees, to snakes, to planet, to technology, to women’s liberation, to arts, to architecture, to world economics, to bottom of the pyramid, to top of the pyramid, to technology in rural India, to technology from MIT.....all in a short span of just 2 1/2 days. And believe me when I say that no a single sales pitch...everyone just interested knowledge sharing and brainstorming.

The 18 mins format of TED is like Twitter where you are forced to communicate your pearls of wisdom in 140 characters similarly TED makes smart people communicate their years of wisdom in 18 mins.... with lots of entertainment and light moments thrown in.

If University is like Test Cricket, 1 Month Executive MBA Programs like One Day Match, TED is the 20-20 version of going to the best university in the world and learning from the best teachers all in 3 Days..... though I missed the Cheer Girls :-)

My journey way back was also equally eventful with me and Film Make Shekhar Kapoor having a flat tyre in the middle of nowhere and missing our flight. Now that’s a different story to tell.

So why am I calling TED a absolute waste of time and money...simple because I learned from a professor Hans at TED that people like to read negative stories. The actual headlines should have been from 14th July 2026 all Schools and Colleges will switch to TED Education System :-) and the people who did not attend TED even though they could afford it would just read the headlines and move on...