What Entrepreneurs must learn from Fashion Models!

Posted on July 29, 2010 by Rodinhood

I have always admired fashion shows and their glamorous models. Not so much for their skinny and anorexic looks but for their amazing ability to change their clothes, make-up and persona within minutes and then walk the ramp with such élan and confidence.

What these models teach me is how to manage change without hesitation.

Some fashion tips that I have learnt!

When you finally get dressed, it’s time to undress.

In 1998, I spent 18 hard months creating a website called contests2win.com.  The idea was to aggregate and host all nationally advertised contests in one place and allow consumers to respond without the hassles of cutting newspapers and mailing competition postcards. Brands like Unilever, Channel V and Disney quickly embraced the concept and became my first clients. However, there weren’t lots of contests to keep the site really busy. One day, when I was on my regular ‘contest begging’ trips, I was stunned when the brand manager of Liril Soaps (a Unilever Company product) said, ‘Alok, don’t harass me. We make soaps here – not contests. If you like contests so much, why don’t you make them and pitch them to me, rather than the other way around’. While that attitude completely ‘disrobed’ my then existing business model, I was forced to invent the business of customized ‘advergaming’ (Advertising meets gaming) to make clients sign up. 12 years and 1000+ advergames behind, I am still smiling. If I had stuck to being a digital ‘post box’ for contests, I would have not survived beyond the first year.

Thank God someone forced me to undress.

The fashion show venue changed just as you arrived.

Post the dot com bust in 2000, everyone in India suddenly stopped believing in the Internet. It was like saying that if a plane crashes, the entire business of airlines becomes a suspect.  We were doing great business with most of the global Fortune 500 brands, but it became increasingly difficult to scale up the business. Softbank was one of our investors and was impressed by our business model. They invited us to China to start up the same business of contesting and offered to incubate us.

I still remember that January 2001 day when we packed almost half the office on a plane and sent them to a hostile land that most folks had never ventured into. It was a bizarre feeling to travel overseas to seek our fortunes just a couple of years after starting up in your own country.

But by 2003, China had become a larger business for us than India and we actually imported a mobile business from China into India.

Forcing a change  – this time a geographic one was a painful but beneficial lesson we learnt.

A cosmetic nose job is a must to walk the ramp.

Years ago, I used look at models with perfect ‘cosmetically altered’ noses and pitied them for altering their god gifted bodies just for a profession. Soon, I had to taste my own disdain. In China, our contesting business had migrated to the mobile platform and was scaling well. It caught the attention of Siemens Mobile who offered to invest in it. One of the shocking clauses in the term sheet was the condition that we alter the company name (from our famous dot com contesting legacy) into a ‘mobile’ connoting name!

It was almost like someone asking me to change my name and surname for a job. On inquiry, Siemens revealed that their investment committees were allergic to dot coms after the bust and this was just a simple ‘cosmetic’ change. We rebranded ourselves to be called Mobile2win.

The day I signed the term sheet, the perfect nosed models flashed in my mind.

Are fur coats best suited for Mumbai weather?

In 2007, I was lucky to meet Rahul Khanna of Clearstone Venture Partners. Rahul was keen to explore an offline Cyber Café Gaming business in India modeled on the success of China and Korea and I was happy to take on the challenge of creating one.

We raised 5 million US$ from Clearstone and Silicon Valley Bank and went gung ho into importing a ‘has to succeed’ business model into India. I signed up SEGA of Japan to license us their car racing game and then went aggressively into all the gaming cafes of India to host and promote the game.

In 6 months, the business failed badly. No one seemed to be interested in playing these complex games in dungeon like cyber cafes in India. On introspection, it was so clear why the games succeeded in China – with no mass entertainment options available (TV and films are state controlled) and very cold weather, Chinese teens were happy to lock themselves into gaming dens and play away for hours non stop. On the other hand, in India, with 3 bollywood movies releasing a week; 500 channels on TV and very warm and ambient weather, teens cared a damn to sit in suffocating game parlors and play online games with silly dragons and elves.

We were forced to replace our fur coat (MMOG game) with T-Shirt and Shorts (snacky flash games) and went on to become a top 20 global online games company.

But the misery of wearing a fur coat in Mumbai remained etched in my mind.

Miss beautiful, did you forget your stilettos and handbag?

Games2win became a global 20 online portal business by 2009, and my partner and I became absorbed into creating more portal centric games with an ambition to reach a top 10 rank.

While we got distracted just making single player games, young and nimble game companies like Zynga (now worth 5 BN US$$) arrived on the scene and took the humble flash game into social networks like facebook and created global phenomenas like Farmville and Mafia wars. Just by combining the dress (flash game) with sharp stilettos (social media) and handbags (virtual goods), they became the hottest models in towns!!

All of a sudden, old hags like us were playing hard to catch up.

Entrepreneurs when they watch FTV, shouldn’t dream of pretty young models as companions they wished they could date – rather they should think of them as fellow entrepreneurs who have important lessons to teach you.

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Experiences, Start-Up, VC & Corporate Stuff | Tagged , , , , , , , , , , , , , , , , , | 6 Comments

Have you partnered with thieves and robbers?

Posted on July 16, 2010 by Rodinhood

In early 2008, at games2win.com, we had created a huge hit game called ‘Bombay Taxi’. It was a really funny flash game that challenged you to park a Black and Yellow taxi in the crowded streets of Mumbai while overcoming obstacles like beggars, kite fliers, local trains and elephants. And in a typical Internet style, we began receiving massive traffic to our portal via viral traffic – especially from USA and EU since Bombay Taxi was a classic parking game blended in a new exotic theme.

Just after the huge spurt of traffic, I was shocked to notice that visitors suddenly disappeared – almost like they had fallen off a cliff. This was not typical – traffic always tapers down and then plateaus out, so I decided to investigate. When I typed ‘Bombay Taxi Online Game’ on Google, I was shocked to find that overnight almost 400 websites had stolen our game and embedded it on their portals. These thieves had sniffed out a good game and now were enjoying traffic on their own sites thanks to our hard work!

My partner Mahesh Khambadkone and I huddled in our corner office conference room and brooded. This was a disaster. Each time we would make a hit game, thieves would steal it and we would never reap the benefits of tsunami like viral traffic. Flash files could not be protected and this was a big blow to our business model since we relied on advertising on our site to make us $$$. Also DRM (digital rights management) for flash games was really not a successful technology.

This led us to apply a thought process model at 2win group that we call “mental demolition”. Essentially it converts ‘how things are’ to ‘how things can become’.

Just demolish each fact and event and build it into something that works for you.

So, we realized:

  • Why do things get stolen?
    • Because they have value… no one steals the dirt of the streets and takes it home. So one big positive was that we had created some great content that the world loved to take home.
  • The sheer number of websites that had stolen our game in 3 days overwhelmed us. This proved that there was a massive distribution opportunity for our games amongst sites we had never heard of before.
  • What was really hurting us? The fact that we were missing on the ad revenues that these stolen games were generating on the pirate site.
  • Was protection ever going to work? Everyone we knew had pirated music and videos and films from all over the Internet. Protecting IP was futile on the Internet.

In a brain wracking session, there was a flash of inspiration and a ‘Eureka’ moment: We plotted to create a technology that would allow us to place INVISIBLE ads in our games (for the pirates not to notice them) that would then travel along with the game to the pirate sites and become automatically VISIBLE when the game played there!

We actually cracked this technology (MK and I are the inventors in our patent filing), and the games2win.com business changed dramatically after that day. To give you a perspective, we now touch 15-20 million users via Inviziads each month (comScore May data – extended web). These ads are fully controlled by us and we change and sell the ads as per our control in each of the 160 countries the games have been stolen in.  Over 8900 websites have stolen our games and new websites get added each day. Games2win from zero has become a top 50 global games business (comScore online games ranking May 2010) thanks to the traffic we pull into our sites via inviziads!  Internally, we now benchmark a game’s success by how many websites have stolen it!

Look at the love triangle – Pirates love our content and steal our games. We love ads and place ‘invisible to visible’ ads in our games. Consumers love games and they play them on all kinds of websites all over the world!!

Players such as Viacom, Ubisoft and Warner Brothers now license Inviziads and you can study the business model on www.inviziads.com.

What are the lessons for entrepreneurs and start ups in this story?

  • Try and create gold from dust. If you have a problem that is destroying you, look at it using a prism that could turn it to an advantage. I always feel that if Virgin Music and EMI etc., would have bought Napster (instead of suing it and closing it down) and then converted the site into their official mp3 website, iTunes would have been a me-too and not the gorilla it is today
  • Understand and accept the eco-system. If the internet is about piracy and lifting, flow with it – don’t fight it
  • Foes can be Friends just by a flick of a switch. Think of everyone as a Dr. Jekyll and Mr. Hide. Make your enemies work for you

Remember that winning the nuclear war in planet start up requires not just creativity and innovation but the ability to mentally demolish and rebuild yourself from scratch.

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Experiences, Internet, Media, Mobile and Tech, Start-Up, VC & Corporate Stuff | Tagged , , , , , , , , , , , , | 11 Comments

Mr. Marwari – Have you met Mr. Tata?

Posted on July 9, 2010 by Rodinhood

In the past 12 years of pavement pounding and boardroom hustling, I have had the honour of doing business with the biggest companies in India.  Nothing compares to the experience of dealing with Tata companies. For me personally, coming from a traditional Marwari (trader) family, this is special – it helps me juxtapose my Marwari training vs. how a corporation like Tata thinks and behaves.

Some brain waves:

My Salt tastes better than yours!

The best way to explain this is to narrate a conversation I had with Sam Balsara of Madison Media a few years back. Sam was invited by a Mega Marwari Corporation (MMC) for a chat to help create a Salt Brand. Sam was asked by the grey haired senior executive, ‘how much money would it cost to build India’s greatest salt brand?’ Sam thought for a moment and said ‘Say 20-30 crores (4-6 million US$) in media spends. Assuming your product is great, that should take you to the top’. Mr. Grey Hair heard this and almost fell off his chair… He said ‘Sam – with that money, I can build 5 more Salt factories!’. Sam pointed in the direction  across the street and said ‘Mr. Grey Hair – the folks just opposite your office created Tata Salt. Today, every salt factory in the country goes to them to supply them unbranded salt. The one solo Tata Salt brand is more valuable that 100 plain factories put together. Adding 5 more factories to your collection will not do anything for you’. Mr. Grey Hair looked perplexed.

From the first day of attending my father’s business, I was told ‘advertising is a waste of money’. It gets you mixed up with wrong people. Just invest all the moneys in factories and machines.

How short term is that! Once in a while, I look at a toothpaste tube of Colgate in my bathroom & flip the side and read ‘Made by xyz in abc fatory’. Mr. Grey Hair and his 5 factories come to mind. Just consider the economics – If he were in toothpaste supplies, he would be paid 4 months after supplying his goods to Colgate, while Colgate would have collected money from me in advance even before I opened my toothpaste box.

Its ironical that I left my father’s business to start a digital advertising business.  And I have learnt that no matter how great your service or product is, if you can’t brand it and communicate it, it will not create long term value.

What comes first – Reputation or Profits?

If you go to most family owned companies, their core focus is profitability. How much and how soon? Little time or money is spent in building a reputation. When I visit many of the big India business group offices in India, I rarely see a poster in the visitor’s area that communicates:

What are their business practices?
What do they stand for?
What are their values?
What are their views on treating their employees?

In most Tata Companies, I see that Value Statement at eye level while sitting on the sofa at the reception. It makes me feel nice.

By not aggressively creating a positive reputation, Companies stand the risk of being determined by legacy and hearsay. That’s a big risk that can cost you your business.

A few years ago, after buying a new car, the showroom lady called me up and asked me my preference of insurance companies. All the insurance offers were uniformly priced. I asked her to rattle the name of the Insurers and the minute I heard a Tata Company name, I just said ‘buy that one’. Why I made that decision, I still cannot rationally explain.

Building a reputation may be tough and non productive in the beginning, but ignoring it can have serious implications on your business.

White money is more nutritious that black.

After my first round of VC funding, I ran into my uncle at a dinner. He had read about the financing in media and cornered me. ‘So you’re rich! Why are you looking so gloomy?’ he said. ‘Huh’ I asked? ‘My Company’s the one that got funded, not me! No one got rich. The VCs got poorer and a long arduous road lies ahead of me to return the money to the VCs many times over’. He chuckled and said’ ‘What nonsense! The first rule of the funding game is to siphon out 25% of the funds and make yourself-rich. Investors can be dealt with later’. Shucks… hadn’t I heard that story before? Many of my relatives have floated public issues that were nothing short of scams and they still boast about it!

This ‘get rich, siphon out’ philosophy left so many old industrial houses bankrupt. They were never capitalized to take advantage of acquisition opportunities and punished their shareholders so harshly that they could never raise capital again. Think Mafatlal, Dalmia and many more.  Even today I meet embarrassed professional managers working in ‘family’ firms who get paid salaries in ‘half white and half black’ to avoid taxes!

It takes a Tata DNA to create a TCS, Tisco, Telco + 100 other Companies with massive cash reserves on their balance sheets. This was especially tough during the Indira Gandhi emergency tax regime when the Income Tax rate was over 90%. Almost everyone gave up and resorted to siphoning off money from the Balance Sheet, but the Tata Companies hung on.

When you build a cash war chest, and deals like Corus or Land Rover come your way, you have the ability to execute.

On a depressing note, look at the state of Hindustan Motors and Fiat India today. Even though they dominated Indian roads for decades, they are bankrupt today. Even the mighty Bajaj could not build a Nano (the natural progression after a scooter). It took the Tata group to do it. Of course, on the flip side there are the Mittals and Ruias who have built massive empires in the past 20 years.

Outsiders stay away. We are the Adam’s family.

12 years ago, I visited a large (100 crore+ topline) textile factory in Gurgaon (Delhi) and met the CEO, COO, CFO, CMO, and CTO. They all had Kumar printed as their last name! On inquiring, it turned out that the family tree right down to the grass roots was involved in running the show. In conversations, all they did was nod at each other for consensus. No one had the guts to tell Grand Dad Dinosaur that he was wrong. It seemed so stifling and stuck. When I asked the young 23-year-old MBA what his vision for the Company was, he said something that I felt was his father’s vision and definitely not his own! 12 years later, I did a recon – the Company had shrunk to 20% of its market cap.

Companies like these have no future. Their boardroom antique furniture doesn’t think laterally and has no clue of new business lines. They would get a heart attack to pay Accenture Rs 1 crore to suggest a strategy to uplift them. They don’t hire gold standard professionals because they can’t expose their business loopholes to them.

Think of it – most of the old family run companies I know still make steel, cement, ingots, rods and all kinds of cloth, while the Tatas play in Software, Telecom and other value added businesses.

Like the Tata retirement policy, all the granddads need to be sent home and professional CEOs hired across the board to run the Company. Else, most family concerns will cease to exist.

Sometimes an Opera Singer can make the best CEO.

If you go for a live music concert or a dance performance at the NCPA (National Center of Performing Arts) in Mumbai or listen to an Opera at the Jamshed Bhabha auditorium next door, you will marvel at the massive contribution the Tatas have made to the Art scene in India.

Given this background, if I were an Austrian CEO who can run a steel plant as efficiently as I can play the Oboe, I will be far more motivated to join the Tatas as the CEO of TISCO rather than become the CEO of some Industrial House in India whose CEO cannot understand if the Oboe is a wind instrument or a Shoe.

Life and business is being cultivated way beyond the dusty corridors of factories and sheds. I wish that all wannabe entrepreneurs and inheritors of family businesses understand this early on!

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Experiences | Tagged , , , , , , , , , , , , , , | 25 Comments

Do you know ‘Board’ Room Dancing?

Posted on June 30, 2010 by Rodinhood

So, you can burn the dance floor, but can you tango in the Corporate Board room?

I have had the pleasure of attending many board meetings and am happy to share some experiences and tips in the lessons on how to dance in the Board Room:

Always Maintain Direct Eye Contact

One of the biggest learning is to maintain direct eye contact with your fellow board members – at all times. The eyes speak a thousand sentences. In VC funded companies, you can quickly understand what your investors like to hear and what they don’t find palatable – just by looking into their eyes.

An interesting strategy I follow is to place my co-founders at direct eye contact with the VCs so that all partners get a vibe of who is reacting to whom and how in the meeting.

See my Eye Contact Flow below.

Keep your eyes Open!

Keep your eyes Open!

( The entrepreneurs are your co-founders and the VCs are your investors)

Your CFO is the best observer. Since she will be doing the least talking, she will be ideal to gauge body language of the other attendees.

One of the most interesting lessons that I learnt in this strategy was thanks to Sandeep Singhal (now of Nexus Venture Partners India). A few years ago, the Mobile2win CEO of India – GK was making a passionate pitch to Sonali De Rycker (now with Accel Venture Partners) for a series B investment. Sandeep and I were present as board members (we had nothing to do with the day to day management of mobile2win). GK was very lucid and charged in his pitch, and I thought that it went well. The next day, Sandeep called me and told me, ‘Alok – Sonali has passed on the investment’. She said, ‘every time GK completed a sentence, he looked at Alok as if to check if he was on track. It showed that Alok, the founder is actually the CEO and not GK. I cannot invest in a company whose CEO is not in real command’.

Look into the eyes of your partners at all times.

Figure out who likes to Dance with whom

I have always noticed that sides between external board members get created instantly when the board meeting starts. It’s almost like dancing partners getting magnetically aligned when the music starts.

Typically, if the meeting is going to point towards an objection or disagreement, you will notice one Board Member (VC) make a strong comment and the other VCs (who are in agreement with that thought) quickly follow suit.

As an entrepreneur, it’s great to get feedback. Pay attention to the groups on your board that think in the same manner. It later helps figuring in out what the motivations of those objections could be and if there is an external influence that is channelizing the discussion, etc.

In my humble experience, VCs typically have a chat on the board-meeting outcome before they enter the room and hence the moves they make inside the room are choreographed.

Pay attention to song requests!

OK – so you are the DJ, but you have to listen to the requests of the floor. One of the biggest failings I see in fellow entrepreneurs and myself is the inability to LISTEN to investors and interpret the point they are making. Sometimes, we (entrepreneurs) get so swept by the passion and emotion of the business that we blank out to anything that doesn’t sound like the tune we like.

A couple of years ago, after raising our series A from Clearstone Venture Partners for games2win, Sumant Mandal (from the Santa Monica office) and Rahul Khanna (from Mumbai) were present for our first board meeting. At that time, we had just started rolling out our larger MMOG game formats. I remember pitching ‘concurrent’ users to the board and Sumant kept asking me the relevance of that metric to the business we were trying to build. Mentally I kept saying ‘Sumant – that’s what the world measures MMOG performance with’. Almost 2 years later, I realized how meaningless that metric was for a market like India in which concurrency was hardly available. I should have just listened to Sumant carefully rather than spend my time measuring something that was redundant!

Control the Dance Floor

Typically, discussions tend to flow into several directions and it’s common to see the meeting spill over beyond the time slot planned. Your investors may not wait forever. This harms the entrepreneur team who was supposed to expose all the items of the agenda across investors.

It’s a good practice to run a quick run of the PPT (at least I do) and then rewind to slides that either you want to focus on or any of your other external board members may want to discuss further. This allows the not so involved board members to at least get a bird’s eye view of what’s happening in the company and not be an ignoramus when they speak about your Company to the outside world.

Get your dance troupe in

Once every alternate board meeting, I usually invite the core team members to come inside the board room and present their slides (integrated into the master presentation) to the board members.

This expands the perspective of how the Company is being managed and is also very encouraging to the team to actually come up and present to a full-blown board, comprising of powerful VCs and other members of your board.

If there is a scuffle, play bouncer!

Rarely but not never, a nice brawl will break out in the boardroom. (This is an excerpt from my recent blog Toughest decision on my life ‘….Just a month earlier I had come back from Shanghai and attended the most bizarre board meeting ever in my memory. The meeting started at 9 am and by 9:30 am, there was war in the boardroom. 2 Germans (Helmut Struss and Oliver Kolbe from Siemens), 1 Indian (Gopala Krishnan (GK) – the CEO) and 2 Chinese (Peter Hua and an Observer from Softbank) were all screaming at each other simultaneously in German, Chinese and in Hindi (me telling GK to control himself). The issue was typical start-up stuff – scaling up, finances, hiring, firing, etc, etc, and while I let them go at each other (Softbank shouted at GK for pointing fingers at them– a very ‘disrespectful’ act in China)’

In such events, you MUST take control. Disagreements are a good sign – and usually result in a positive outcome. But you must control it before the argument becomes PERSONAL and then turns into a vindictive styled riot.

Everyone in that room is there to create value and hence need to be listened to. In my case above, Siemens and Softbank actually rescued the company from destruction in China!

Ask to teach the steps you don’t know!

Finally, you may be Mr. Know All, but there are lots of moves that are still unknown to you. In my board meetings, what I really appreciate about Rahul & Sumant of Clearstone is their insistence to ask me how they can help my business scale further. Be it introductions, best practice guidelines and definitely recommendations to other VCs – there are always things you want. Be bold enough to stand on that floor and ask the DJ to teach you a move or two!

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Experiences, Start-Up, VC & Corporate Stuff | Tagged , , , , , , , , , , | 8 Comments

The toughest decision of my life…

Posted on June 29, 2010 by rodinhood

By 2005, a company I had co-founded called Mobile2win (originally started in China in 2001 and then brought into India in 2003) was sailing…

We were first movers in the India Mobile VAS (value added services) space and things were looking up – thanks to all our learnings in China. The first Indian Idol voting platform had been successfully handled by us (and ever since) and Sony India had made us a long-term partner. We were partnering with lots of media companies, selling our mobile games on Vodafone and creating creative marketing platforms. Rajiv Hiranandani – head of the business was doing a great job.

The success was also creating a sweet problem:

The business needed a series B investment to scale and my existing investors – Siemens Mobile Acceleration from Munich and Softbank Ventures from China were not at the best of terms with the management of mobile2win.

Just a month earlier I had come back from Shanghai and attended the most bizzare board meeting ever in my memory. The meeting started at 9 am and by 9:30 am, there was war in the boardroom. 2 Germans (Helmut Struss and Oliver Kolbe from Siemens), 1 Indian (Gopala Krishnan (GK) – the CEO) and 2 Chinese (Peter Hua and an Observer from Softbank) were all screaming at each other simultaneously in German, Chinese and in Hindi (me telling GK to control himself). The issue was typical start-up stuff – scaling up, finances, hiring, firing etc, etc, and while I let them go at each other (Softbank shouted at GK for pointing fingers with this hand – a very ‘disrespectful’ act in China), clearly this was a board that was not going to co-operate with me for raising money in India.

Back home, when I started showing mobile2win around, there was massive interest. Sandeep Singhal of Sequoia India was kind enough to stay up late night in his room at the Taj, Mumbai and hammer out a term sheet for me the next morning.

All these and more got no responses from Softbank and Siemens. So I asked them what they really wanted?

Softbank was not going to put money in and Siemens wanted out. They were non-Indian VC’s and only Indian VC’s would understand Indian Mobile VAS space and hence invest.

This was going to be a tough deal to close out.

One afternoon, I met Pramod Haque and Vab Goel of Norwest Venture Partners. ( I later learnt that Anupam Mittal of shaadi.com fame had turned down a term sheet of Norwest for funding Mauj.com).

Norwest stepped on the gas and took an active interest in talking to Siemens and Softbank and understanding their motivations. They engaged with mobile2win management and also spoke to other investors.

A few days later, late afternoon I received a phone call that precipitated into the ‘toughest decision of my life’ :

Vab indicated that he had settled all issues of valuation, exit and new investment between Siemens and Softbank and the management of Mobile2win (GK and Rajiv), and that Norwest and another VC was ready to go ahead in massively funding mobile2win at great valuation terms.

Except, there was one condition:

Alok (me) had to exit the company!!!

At first I thought he meant Alok had to be distanced from management and I told him that I was barely involved. “Exactly” he told me – “You have no role to play, do not have the capacity to invest more money and your chunk of equity will free up lots more space for new investments”. Essentially Norwest wanted to buy out the promoter, make the company totally VC owned and then drive the management themselves.

Over weeks, I understood that this was a non-negotiable stance by Norwest. Also, the other 2 investors – Siemens and Softbank were sold on this solution and began to pressurize me to exit (For the innocent – if most VCs want an exit to happen, they can force the promoter to do the same using the ‘drag out’ clause).

So, here I was – someone who had founded a good company, sitting on the brink of VAS value explosion in India, and now being offered millions of dollars to walk out. It became a very puzzling and difficult situation to handle..

Since the Company was structured in China, I took a legal view from a historic law firm in Hong Kong called Haldanes and I remember the very polite British accented lawyer talking to me for 1 hour non stop till I interrupted and asked him – “Do I have a case to stay in”? He replied “No Alok”.

I then consulted my most supportive VC and guardian of all these years – ICICI Ventures. Bala Deshpande and Nandini Satam were so objective in their advice and mentoring – I still regard ICICI Ventures as the best thing that ever happened to me as an entrepreneur.

Late night at 2 am, I got up and sat in my living room and brooded about the exit from mobile2win.  I would be rich, the company (contests2win) would receive substantial cash to do other things etc, etc … At the same time I would also have to sign a 3 year non compete from doing anything mobile in the world (!!) and have to live without what may become a billion dollar company without me.

Legally, I could battle it out… A ‘drag out’ would take months to execute and kill the deal and also the funding – so it would finish the company. I would have at the most won a Pyrrhic victory…

The next morning I called Vab and said ‘ I’m selling’.

The deal closed within 4 months. It made me a dollar millionaire and more importantly put cash into the mother company (since share were held by contests2win) that allowed us to pay a 1250% dividend to shareholders. We invested 1 million US$ into games2win that jump started the business and received funding from Clearstone and Silicon Valley Bank.

The months that passed were dark. VAS continued to haunt me and I would wonder if I had lost the biggest opportunity of my life… Mobile2win India hired big wigs from TV and elsewhere and moved into a 10,000 sq feet office (from the 1500 sq feet office I had). They hired over 200 folks and seemed to the hottest company around…!

So, what was the outcome you may ask?

In 12 months post the deal, the cracks in the VAS business began to appear in the Indian Mobile space. Operators were unrelenting to share more than 20-25% revenues, payments were delayed by months and the business became strangulated with lots and lots of wannabes giving away content and revenue share for free.

24 months later, mobile2win was flipped over by the VC’s to a Chandigarh company called Altruist for a non-cash deal. The business had collapsed and this was clearly the VCs saying it was over.

For me, this was not sweet revenge but just the toughest decision (to sell or fight) that had turned out so positively!! Added to this was the fact that the non compete got over in 2009, so I became free to do anything in VAS!

And what happened to Mobile2win China? GK left and a smart Chinese called Nick Zhang was hired by Softbank and Siemens  as the CEO. Nick turned the company around and then astoundingly sold it to Walt Disney (USA) in a multi million cash $$ transaction. Softbank China, Siemens and my group got lucky again!

If you liked this piece, you may also like my blog ‘Confessions of a digital entrepreneur‘

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Experiences, Start-Up, VC & Corporate Stuff | Tagged , , , , , , , , , , , | 57 Comments

If women could use the memory they have…

Posted on June 25, 2010 by Rodinhood

My wife and I are part of the regular party circuit. For those occasions when we head out to gatherings involving friends and family, my wife selects her clothes in a rather unique fashion:

She first asks me to choose an ensemble for her to wear. I am a predictable kind of a guy and quickly pick out something that is functional, dressy and most importantly speedy to put on. My motivation is my favorite saying – ‘time is of the essence’. In a few seconds of announcing my recommendation, it is ceremoniously rejected and dismissed by my wife. The reason (if I can luckily extract one) is always the same: ‘ Everyone we are meeting today saw me wearing these clothes last time and so I can’t repeat them’. She then authoritatively theorizes that the folks we met a few weeks or even months ago will actually remember what my wife (amidst 15-25 women) had worn!!

Really??

If that were the case, then my wife should in turn remember the clothes the other women wore. In that spirit, I ask her about to describe what my aunt or cousin was wearing in that party 2 months ago, but my questioning is cut short by wife slamming the bathroom door on me…

If I were to play CSI, I wonder what is the possibility of a human being (who is not trained to be a detective) to arrive in a dimly lit environment, then immediately meeting lots of folks, getting busy in husband bashing and gossip and even high on white wine to remember weeks later the clothes of other folks in that party setting were. I think ‘impossible’.

Still she may have a point…so if women can, so can Men. I mentally conduct an advanced google keyword search of my memory and try to remember what was the color of the trouser of that idiotic Uncle when we met the last time over dinner in a restaurant…. Hmmm… awwww….it just slips me. Ok – wait a minute, there was this moron who spilled his full whiskey glass on my brand new woolen trouser on my dad’s birthday dinner. Half an hour later and 2 whiskeys down, I had unsuccessfully tried to download a nice bloody Mary into his shirt….but he got the vibe and vanished… So what was the color of his garment? Hey…wasn’t it a white shirt…?? Errr….it could have been black… why can’t I remember the colour of my target i felt so strongly about??

To conclusively accept or reject this Einstein memory theory, I consciously made an effort to memorise what my wife wore on a couple of occasions, and then a few months later quizzed her on what she had worn for that event?

Believe it or not she remembered everything in detail and scared the wits out of me. I repeated this test on my mom who also passed with flying colors.

My perception of human memory has been altered forever.

Can women please channelize this memory power to fulfill 3 wishes I have for them:

1- Mentally absorb every chess move ever played and then beat the pulp out of all the Grand Masters out there and became the Grand Mistresses of Chess!!

2 – Remember every General Knowledge question that exists and monopolize all the Who wants to be a Millionaire Shows.

3 – Imbibe every musical score and nuance of the world’s best musical compositions and please conduct the New York and London Philharmonics…

And if you wear Black and White doing all the above, the world will still clap for you.

I dedicate this to my wife who is always the guinea pig of such posts of mine :-)

If you liked this piece, you may also like my blog ‘Why do Women carry Large Handbags‘

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Just for fun | Tagged , , , , , , | 3 Comments

Dear God, Do you understand your Mobile Bill?

Posted on June 11, 2010 by rodinhood

I swear (on GOD), that I can just about manage to run a Company, keep investors happy, drive cars on both sides of roads and even identify a western classical musical piece, but I just cannot understand my mobile bill.

Consider this simple chart:

In Mumbai (Maharashtra), if you want to get a post-paid connection, these are some of the options: (haven’t considered some of the latest entrants):

Operator

 No of schemes Total Items on the ‘Confusion Menu’
Tata Indicom 11 11
Airtel 19 30
Vodafone 13 43
Reliance 16 59
BSNL 8 67
Idea 9 76
Aircel 8 84
MTNL 15 99
Reliance GSM 11 110
Tata Docomo 6 116

So, lets assume that you go to a gas station driving your car, harried, late for a meeting and ask the pump attendant to ‘fill her up’. ‘Sure!’ he says and  gives 116 options to choose from  (what I call the item on the confusion menu in the table above).  ‘Sir!’ he says, please tell me if you want ‘ super 149 or saver 99 or gold 599 or Lifetime of …… (brand names of the 116 choices)’

Depending on how your day has gone, you will either:

  1. Shut the car, walk out, thank God for the sunshine and hail a cab. Hell to the world… and cars and 116 types of gas choices…
  2. Blow your fuse and create some healthy  blood pressure for yourself… hell, we have to die some day anyway..
  3. Tell him ‘Boss!’ – Fill in whatever you want – I have to quit in 5 minutes’
  4. Be a moron and say “Acha (ok), let me ‘study’ the plans”. So you park your car on the side, take the 116 print outs of the options and then spend 8 hours studying what you need to buy… (Remember you are a moron).

Telecom Companies BET that you are the Choice 3 person ( Charge what you have to but get on with it types) and that’s how they thrive!

Why creating confusion is the best way for profit maximization:

Have you studied your mobile bill carefully? Can you really claim that you know EXACTLY what is being charged for what? The different ‘schemes’ of sms, Internet gprs, talk time, roaming local, roaming international blah blue blee…?

Creating unpronounceable and incomprehensible cost plans make you weak – they make you drop your guard and say the golden words ‘whatever’.

How this works:

  • By creating massive confusion on the pricing, telecom companies take your attention to the easiest thing you can understand – your ‘budget’ or monthly commitment to your mobile bill. Let’s say you make up your mind to spend Rs 1000 (US$ 20) per month on your bill.
  • Immediately, you have stopped paying attention to what you will GET by paying this amount – rather you will have already committed on what you will GIVE someone.
  • When sharks-like Telcos get  you in that mindset, they create myriad and bloody awful pricing plans that GIVE you the LEAST and GET them the MOST.
  • Interestingly, they measure their quarterly performance in monthly ARPU ( Average revenue per User) – how much they make you pay per month!
  • As you trudge along, a stray colleague or friend will give you a ‘tip’ on how to get the best ‘scheme’ or mobile plan. You secretly call the operator up, make a few changes and feel satisfied. You just fooled yourself all over again.

The SOLUTION

  • The TRAI (telecom regulator authority of India) has to allow folks to flip operators but not their mobile numbers ASAP. This is called Mobile portability and means that you are no longer forced to stick to one Operator for the rest of your life since he sold you a mobile number! Its like signing up to fill petrol from the same gas station for the entire period you own a car!!
  • Once this happens, a simple MARKET of ‘Mobile Minutes’ and ‘Mobile SMS’ needs to evolve – almost like buying Gold or Silver from Banks or from commodity exchanges. In a country where 400-500 million people consume a daily requirement (talktime and sms) this is hygiene!
  • So, if I want to buy 300 minutes – look up the ‘best rate’ at that time (and so 100+ operators can compete basis what minutes they can offer and at what rate) and you snap it up. Same for SMS. It’s just like saying – I want to buy 100 shares of a company – look up BSE/NSE and buy it there and then. Add to this, consumers should also be able to SELL unused minutes at their price choices – truly making this a highly LIQUID market.

Confusion has always been the creator of ill amassed wealth and profits.  Information is the enemy of confusion and brings order, competition and massive efficiency.

The same applies to the Indian Telecom industry. The players need to quit confusing 500 million consumers and deliver the truthful value to them.

Send me your experiences as a comment and contribute to this piece!

You may also like my blog ‘Alok’s driver plays obscene film songs on his mobile and why Alok pays for it‘

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Internet, Media, Mobile and Tech | Tagged , , , , , , | 10 Comments

Why service at India Retail stores is so bad…

Posted on June 9, 2010 by rodinhood

A few weeks back I invested a princely sum of money to buy my Airmax 2010 Nike shoes from the flagship store in San Francisco. Last week, just before traveling again, I washed my shoes and was aghast to see a big hole on the inside lining of my brand new shoes. I photographed it and sent the complaint to the marketing folks at Nike India – got ‘Shunya’ (zero) response. This made me madder. Armed with the receipt and with war in mind, I stormed into the New York store determined to make a fuss and noise. This was the ‘Indian’ consumer psyche kicking in – ready to fight and draw blood to set right what should not have gone wrong!

The ‘returns’ counter had a very pleasant girl who greeted me and asked me my problem. When I snarlingly showed her the hole, she shrugged, said ‘oops’, and asked if I wanted my money back? Her reaction took less than 7 seconds. I melted. Yet the Indian consumer was still kicking. ‘Yeah- gimme my money back’ I grumbled. She did and then pulled out her trump card – she gave me a 20% discount on any purchase bought within the hour in that store. Well, you guessed it – I bought the same pair of shoes (new color), pocketed enough dollars for a great dinner, walked out feeling like a prince and started doing social marketing for Nike!

Can you ever imagine this happening in India?

Why does Retail Service in all the stores we visit in India – be a boutique or a super mall suck so much?

I believe:

  • The staff at the retail counters doesn’t use the goods they sell and have no information about the product.


The folks in Nike USA are athletes. They know everything about running or the sport that interests you. The guys at the Nike store in Mumbai have fat paunches. They wear Nike shoes but I’m sure only as ‘store wear’. The Nike guy in SFO asked me what kind of running stride I had. I had never heard of this before. The guys in Mumbai did not understand the difference between running and jogging.

The brand owners have to make these sales folks use the product and ‘get into’ the brand they sell.


  • The Brand owner hasn’t educated the sales folks about the philosophy of what their service standards globally are.


The Tommy Hilfiger stores in India are pathetic! The store sales folks never smile – they look like they are recovering from an epidemic or something – neither offer fashion advise nor bother checking if your size is available beyond what’s upfront. When I walk into a Tommy store in the USA – the experience is absolutely the opposite. The problem is that I expect the same experience irrespective of which Tommy store I visit!

Big brand owners must learn from the original software exporters of India who sent young engineers abroad on assignments and then ‘contracted’ them legally to work with the firm when they came back.  The big retail brands should send a few key Sales and Service folks to their International flagship stores or even as just consumers walking the high streets of New York or LA. The investment will be well worth it.


  • The orientation should be ‘service’ and not ‘sales’ because sales precede great service automatically sooner or later.


The Apple store in San Francisco gives you free lessons on how to use and juice Twitter or begin blogging. It’s an open classroom – just come, sit, learn and go. Nowhere do you get the feeling that someone is going to sell you something. In India, within a few minutes of walking into any store, someone will ask you what you want. When I answer – ‘nothing’, I get glared at! Why the hell did you ask me in the first place?

The Oberoi and Taj groups in India and my favourite – Jet Airways have done a spectacular job in selling service to the India consumer not the product. Stay put in an Oberoi or Taj lobby for hours and no one will disturb you. Put the key brands sales teams thru a hotel or airline experience and then put them in front of consumers.


  • Don’t focus on looking smart yourself – make the consumer smart instead!


I still remember walking into the Levis counter at Vama (Mumbai) a couple of years back (Vama incidentally wins my prize for the absolutely worst store…in terms of service in the world). The girls at the Levis counter were slim and pretty, chewing gum, strutting around and constantly chatting among themselves without a bother in the world that they had a job to do. I saw a few customers (girls and their moms) standing on the side absolutely intimidated and shadowed by these ‘modern’ girls! I asked one of these wannabe models what was the difference between all those red, blue and black ‘tabs’ of Levis  – she looked snidely at her partner and asked if she knew… in a tone that made me feel like a moron. (hmmm… shouldn’t she have known in the first place)?

The customers in the corner had vanished and so also had vanished valuable sales for Levis.

Tell Sales people to either become models or Sales people and thus choose between one profession. Don’t mix them up.

International brands can open as many stores in India as they want and stuff them up till the walls burst, but it’s the sales folks who will make the cash register ring. Set that right first.

Send me your retail experience in India or anyplace else as a comment and contribute to this piece.

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Experiences | Tagged , , , , , , , , | 20 Comments

My driver plays obscene songs as his caller tune and I pay the bill

Posted on June 8, 2010 by rodinhood

My long standing driver – Yadav aka ‘Maharaj’ is a rather decent bloke. He is demure, soft spoken and usually never has an opinion. All he loves to do is drive and polish the car. Yet, when I call him on his mobile phone (provided by me) for logistical coordination and other errands, the caller tune he forces me to hear makes me go insane. He has chosen the choicest of bawdy, vulgar and obscene bollywood songs available as his caller ring back tunes. If Hugh Hefner called Maharaj, he would probably never kiss a Playboy bunny again. Maharaj has taken mobile embarrassment to a nuclear level.

The least gratifying part of this story is that I pay his mobile bills and hence I am actually funding this spectacular entertainment strategy of his.

So what makes me do something so stupid?

Well, I have no option. This is the Indian Mobile Mafia at play that adds all kinds of value added services to their subscribers’ phones without their permission.

Maharaj has been subscribed to a monthly CRBT (caller Ring back tune) service without anyone asking him or me. If you try and call the ‘big’ telecom operator that powers his phone  and request to get that service switched off, the pain and the trauma of being passed around amongst villager sounding operators  and then pleading them to just get that damn service switched off is just too much of a pain. It’s better to hear those amazing songs. And if I ask Maharaj to pay for his own bill, he will just hang up – he only receives my calls!

Allow me to explain the real math behind the biggest organized crime racket in this country:

India has 50 crore mobile users (500 million) and their ARPU (average revenue per user) each month is plummeting. Thanks to all out wars between so many operators, voice as a stand alone business will be a very competitive space to make money.  SMS at one time was a couple of bucks – now it’s been reduced to almost nothing.

So, if you are an operator and have massive investments to recoup, what do you do?

Enter ‘VAS’ – or value added services. Ringtones, Wallpapers, Games, blah blah. Sure they seem exciting, but it’s a relatively small % of people who are really interested. And after the newness wears off, you really don’t care. The bulk of India is oblivious to such services since they only want to speak and make calls.  Also, the remaining subscribers being added are coming from rural areas (all urban areas in India now have almost 100% mobile penetration) and these folks don’t want VAS at all.

So the next best thing is to thrust it on them!

In a mobile bill, very few consumers keep checking every small item and then calling up their operator to cancel, change schemes, etc.  Mr. Maraharj’s orchestra costs me Rs 30 (0.60 cents) a month – and I don’t have the time and effort to bother and get a ear pain calling up his service provider. It’s also amazing how many times his service provider calls him (while he is driving) to plead with him to say yes for song downloads and other useless services. Forget the embarrassing songs; these guys will cost us a car accident!

Multiply Rs 30 (o.60 cents) with 10 crore (100 million) users (20% rotating guinea pigs) and you have 300 crores (60 million US$) a month in a scam that is just too painful for consumers to switch off.

This is not just an India scam. While in China when we were operating Mobile2win (subsequently acquired by Walt Disney), we were always tempted to send mass sms messages to Chinese consumers to lure them into subscribing to Astrology and Love services. If the innocent consumer would message back, they would automatically be subscribed to 6 months of such services with very difficult ‘unwinding’ procedures. I remember a vendor showing us a machine that would be fitted with 24 sims just as a spamming device to lure subscribers.

I understand that TRAI in India (The Telecom Regulator) is really taking the operators to task and getting them to clean up their act.

Till their bullets hit Mr. Maharaj’s operator, I will merrily listen to his songs… and who knows…even hum them when I am drunk?

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Internet, Media, Mobile and Tech | Tagged , , , , , , , | 8 Comments

Why do women carry such large handbags?

Posted on June 7, 2010 by rodinhood

I have given up trying to figure out what my wife is upto with her obsession of  massive handbags. Big new ones appear each week at home. In the morning, a new one is selected for the day. Its takes a while for complete ‘content transfer’. In the car, the phone in the handbag rings, and since the bag is almost the size of a cave, it takes forever to find the irritating ringing thingy in the tunnel – by which time the caller gives up and hangs up. Each new store we visit, she first heads to ‘womens bags’

Why are women fascinated by big handbags? And why do they buy new ones ever so often?

  • It’s primitive DNA gene:

I think women were the hoarders or safe keepers in the caves and that’s why clutching bushel like parcels is hard wired in their brains. The bag replicates that experience – it makes them feel that they are in possession of something very material and hence the comfort of the big wobbly cushiony thing near them.

  • It is a baby-cradling fetish:

The bag is a surrogate baby. Cradling and holding it delivers the same effect. Stuffed with things women never use, the weight and proportion is almost that of a baby. It’s a good way to feel.

  • Its that industrious feeling:

In India, women in rural areas carry  large water vessels on their heads. Or on their waist. It makes them industrious. Some toil with sickles in the paddy fields. Are handbags the avant garde tools of industriousness of the modern woman ?

  • It feels like protection

These large handbags are perfect for swinging and protection.  Think of carrying a soft manageable boulder hanging out with you. A swig or two can do the job. It’s a nice feel safe thing.

  • None of the above – women are just richer than men.

The economics of the handbag business are mind boggling. Women buy them like clothes and its just plain simple economics – They have a better cash flow than us men.

I’ve given up reasoning and hope to get some answers.  And watch out – the next handbag is going to become the trolley bag.  I’m gonna get my car an overhead bin!

Sign up for free Rodinhood.com posts below:

Your email:

 

Anyone who likes any of the blog posts is free to reproduce the same without my permission. Do mention my blog’s name (Rodinhood.com) and its link www.rodinhood.com as the source.

Reach me on Twitter , Facebook & Linkedin.

Posted in Just for fun | Tagged , , , , , | 12 Comments