Monday, December 29, 2008

A Note on the TATA NEN Hottest Startup Contest

I stumbled upon the TATA NEN Hottest Startup contest yesterday. The site can be accessed at http://hotteststartups.in. The site features a slide show on the 30 finalists, 5 of whom get declared as the hottest startups in India. I spent some time going through the websites of the finalists and I found the array of ideas and business models extremely stimulating.

A word here. It is one thing having an idea, it is another making it work. "Making it work" involves pricing it right, selling it in packages the customer wants, having flexibility to adjust to demand, managing operations, managing short term and long funding etc. Essentially, the same idea can be operationalised in different ways. One way to break down the operational aspects of a company are in terms of the 4Ps. (Product, Price, Promotion, Place) One can take an idea as old as the hills and play around with this mix and come up with an entirely new offering. Therefore, you could have a lorry business, but maybe if you came up with an innovative pricing scheme, and if pricing was very important to clients in this business (which is the case), then just that innovation could make your company different. You can take this one step further and become a company that comes up with pricing solutions for the lorry industry. (Of course, the demand would have to be large enough and all that) This is on the marketing side. On the finance side, for a startup, if your idea does not generate cash quickly, the pressure is that much more. Getting all these elements right ensures success. Frankly, it is not as complex as it sounds. One must always remember this. The MBA program is 100 years old, Corporate Finance in the modern form is 50-60 years old. Business on the other hand is thousands of years old. Hence, all these fancy terms constitute a checklist of stuff that the entrepreneur needs to be wary about. A more organized form of this "checklist" is the business plan.

Enough talk. Let us get into some ideas that I thought were worth sharing. (Please note that the list is very very subjective. These views are shaped purely by the personal experiences of one individual and in no way a reflection on the other startups)

There is a startup called Wyn Brands whose business model is based on managing the supply chain for fresh vegetables for customers like McDonald's, Domino's, Pizza Hut etc. Till now, I assumed that this would be an in-house function. Apparently, these firms outsource vegetable procurement (maybe even cutting of vegetables) to vendors! Who knew! But once you are aware that this opportunity exists, it makes perfect sense. If I ran a big restaurant and my vegetable demands are well understood (which is usually the case), why not leave the headache to someone else and just focus on quality check. I like this because the idea is simple and the value is clear. The problem is that it is easily replicable and risk of margin pressures in the future (due to competition). But that is ok. I am sure something can be figured out in time. What matters is that someone has got this to work. The company started in 2003 has a turnover in the range of 1-5 crores. Again, it would be interesting to see the net profit margin, but I still quite like the idea.

Another interesting startup is FieldTurf Tarkett. This company offers artificial grass for landscaping, indoor sports flooring, synthetic tracks etc. I would have expected that designers/architects would have normally been responsible to find a subcontractor for this kind of thing. In the case of sports flooring, I suspect that one would have had to contact foreign vendors. Currently, there is a lot of interest in non-cricket sports in India and I think these guys have come in at the right time. Of course, there is always the question of pricing and profits. But the reason I am highlighting this idea is that just by looking around us and asking how did this get here, we could get thousands of ideas. All of us walk into beautifully designed offices day in and day out. Some of us admire them, but we just assume that the builder would have taken care of it. But even the builder would have to contact so many vendors to achieve that goal. Just breaking down those elements and researching about them could be a starting point to ideate for the budding entrepreneur. For example, maybe, specialized energy management solutions for buildings are a big business segment. Observe and ask!

One totally whacky idea on first encounter, but kind of obvious on reflection is Sacred Moments. The company offers designer pooja kits! Outwardly, all of us like to pretend we are oh-so-rational, but face it, all human beings need something to hold on to. One would expect that this business is not only recession proof but one that thrives in recessions! I am sure these Bhakti Packs are sold for a few hundred rupees, but I doubt if it would cost much to put one of these things together. The biggest costs should be packaging and transportation costs. I would expect it to be a high margin business. Since I am currently not a pooja doing type, I don't see the value of this product for me. It would be interesting to see how this evolves. But I still like the entrepreneurial thinking! :) This is to highlight that you don't need to have high funda to the max ideas to become a "succesful" entrepreneur. If your objective is to earn a steady and comfortable income by working a few hours, then such "low funda" ideas could give you more bang for the buck.

In the Indian business environment, legal services and logistics are two huge huge gaps. Remember both of these are essential for the smooth functioning of companies in the macro operating environment. In the field of legal services, the startup featured here is TakeOverCode.com. Imagine, there is a fresh faced kid right out of school who wants to start something. The biggest stumbling block or the "fear factor", in my opinion, is the labyrinthine legal system that one may have to confront. I guess most people would go to their family lawyers. What if you never had a family lawyer? Then you would go by referral. Normally, lawyers do not advertise. (Someone told me that they are not allowed to advertise) This kind of a site, while clearly not advertising, serves just as that. By presenting some oft needed resources on the net, the company must be able to strike up quite a few clients.

Coming to logistics, we have Chennai based Ennovasys. Ennovasys' company profile says that "..[It] is a software company providing real-time asset visibility across supply chain." This is a really cool idea. Imagine you were a trucking company owner and could monitor your assets on real time basis. For the right price, I would buy it.

A related idea is Rasilant Technologies which offers tracking services based on RFID. However, their product offering is quite interesting. They offer inventory management systems, smart card solutions for campuses and clubs as well as secure access systems. There is nothing new about the business model but the reason I have featured it is because they have claimed in their profile that "Rasilant tackles Security concerns and improves organization processes through RFID automation and has a turnover of INR 1 Billion in three years." If this number is true, damn, who knew!

This post has gone for too long. The full list of finalists can be found here. In the IT services sector I liked DeskAway. I did not understand the exact value proposition of some of the other ones, but some of them have really high turnovers.

I will conclude shortly. There are two business models that I found to be very innovative but not sure about the take off for these ideas. One is librarywala.com. This startup uses the internet to revive that beautiful tradition of lending libraries. You choose a Price plan and the books get delivered to you! They claim that there are no late charges! Even with all that, I don't see myself signing up for such a service. But again, I would be very interested to observe this startup.

The other one is Mumbai based Ecomove solutions. While the argument that increasing pollution would see people switching to alternative modes like bicycles is well taken, unless the government makes special facilities for cyclists I don't see the idea taking off. Again, I could be wrong. It is not for nothing that these startups made it to the top 30 from over 500 nominess.

There are many more exciting startups here. Happy ideating!

10 comments:

San said...

And when did Anna start tracking startups? :)

Helmet

themiddler said...

Hey Helmut!

I am not tracking, chumma spewing half baked gyaan. If I knew high funda analysts were going to read it, I would have toned it down a bit.

FreaKick said...

i have an idea.
Taxis are too expensive.
Autos have painful drivers who don't come where you want and overcharge you for where they go.
There are a loooot of single person travelers for whom buses are a nuisance.
Why not have a Two Wheeler Taxi of sorts. It would work out cheaper, faster and less polluting that any other means.
@reader: Please do not copy this idea. :)

Anonymous said...

@FreaKick: I think they already have those in Thailand.

Radhika said...

*ahem.. i wonder where the inspiration for this post came from!

C-lay said...

Isnt a "two wheeler taxi" a fancy word for motor cycle :)
you should patent the idea :)

themiddler said...

@FreaKick

Hmm... sounds nice, but I doubt if people may like it.

themiddler said...

@Radhika

Haha... I admit. I visited the site after our GTalk conversation.

Karthik Sivaramakrishnan said...

Library was interesting because:
http://s-kar.blogspot.com/
ctrl+F 'an idea'

Ayshwarya Singh said...

This is such a nice list for commenting and also help us in the search engine ranking.krishna decors rohini