About Me

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Mumbai, India
I run an IT Security consulting firm based out of India. We started off from scratch in 2001 when I was 21, and have offices in Mumbai, Bahrain, and UAE. The idea behind the blog is to share the stories of how we run the business, the deals we make, the deals that break, the heartburn, and the sheer joy.

The Ultimate Startup Guide

The Ultimate Startup Guide is an e-book that provides answers to all your questions related to starting and growing a business in India. Everything you wanted to know about entrepreneurship in India from ideation to registration to marketing to hiring. The book contains a large number of practical examples, anecdotes, interviews, and motivational material to help you get started, and to grow rapidly in a booming Indian economy. If you've got the idea, this book will help you through with the execution and realize your dreams. Here are some of the key questions you will find answered in this book:
  • When starting a business, what are the legal issues involved?
  • What form of incorporation is better suited to which type of business?
  • What tax issues are involved?
  • How do I start a business and what are the pitfalls?
  • How do I market my business in the absence of significant funding?
  • How do I get funded?
  • What are the basic accounting concepts I should be aware of?
  • What is a business plan and how should I build one?
The brief table of contents of the book is as follows:
  1. Getting started
  2. Ideation
  3. Forms of Enterprises
  4. Funding
  5. Basic Accounting and Taxation
  6. Import and Export Licensing
  7. Trademark and Patenting
  8. Rules for NRIs and Foreigners
  9. Building a Business Plan
  10. Marketing on a Shoestring
  11. Website and Branding
  12. Women Entrepreneurs
  13. Templates
To order the Ultimate Startup Guide - email me at kkmookhey@gmail.com.

Details of the book are:
Title: The Ultimate Startup Guide
Author: Kanwal Mookhey
Pages: 150
Additional: Companion CD contains numerous templates for building your business plan, calculating cashflow, preparing profit and loss, and balance sheets, preparing invoices, your resume and profile, marketing material, websites, contracts, and many other useful and motivational material.

Wednesday, October 29, 2008

Back to globe-trotting

For a while, I'd been more or less spending time in Mumbai, then suddenly about 3 months back work led me to begin my globe-trotting again and give way to my wanderlust. It started with a quick stopover in Dubai for a proposal presentation, and then on to Brussels to join one of our consultants who was working there on a project. This Brussels project is quite noteworthy in terms of the ingenuity of our marketing guy who won it. Seeing a dearth of leads in his kitty, he started to search on Google for tenders and RFPs in our area of information security. He then found this one for an organization in Brussels. When he first told me about it, I said, give it a shot, but mostly we might not win it, because we'll have the disadvantage of increased costs due to travel and stay, which a local company or one in Benelux (Belgium, Netherlands, Luxembourg) or even Europe would be able to avoid by deploying local consultants. But he gave it his best shot, we got shortlisted, and based on a couple of telephonic discussions, they awarded us the project.

Brussels was quite an interesting experience. The project went off very smoothly largely due to the work of our consultant there, and then the weekend before leaving from there we decided to spend exploring that area. My better half joined us, and on her insistence we ended up at one of the casinos. And inspite of my resistance to the slot machines, we actually ended up winning 1000 euros! And then we won a couple hundred more on the roulette and blackjack tables. When we left, we were richer by 1200 euros, which we decided to blow up by hiring a car, going down to Amsterdam - a perennial party place - and spend Saturday night there. It was one helluva experience, and when they describe Amsterdam as one long college frat party - its a very accurate description! I haven't ever seen so many people - not even during peak hour on the Mumbai local trains. And definitely never the sight of thousands of people eating, drinking, making merry, and generally having a collective blast!

After Brussels it was back to Dubai, to sort out my residence visa, since now we have opened up our third office there. Got that done, then I was back to Mumbai for a week or so. My next trip started by having to rush to Mauritius to rescue a project because one of our senior consultants who also was heading our Bahrain office decided to part ways. So I had to take on the project mid-way. But again the place is so beautiful and quite the tourist destination. However, the work pressure was quite a bit, and we managed to spend just the one weekend looking around the place. From mauritius, it was back to Dubai to open up a bank account for the company, then on to Bahrain to sort out the legalities and paperwork and other stuff. Then another week in Abu Dhabi to do a training and complete a project we were doing for a financial institution there.

Then I was back to Mumbai for a couple of days before flying off to Taiwan for the OWASP Asia conference. The conference was wonderfully well-organized by Wayne Huang and his team, with over 1000 people attending. My presentation was on Business Web Application Testing - getting the larger business perspective to the technical approach of pen-testing. I had to rush immediately after my talk to the airport in order to catch my flight and be back to Mumbai in time for Diwali.

So yesterday we had Diwali Puja at our new office in Andheri. While we will retain our current office and convert it into a training center, we'll largely shift all operational and consulting activities to this new office, where we even have a cool new SOC - Security Operations Center, with capacity for 36 people working in 3 shifts.

Things are only going to keep getting more and more hectic. We are aiming to have our 4th international office up and running within the next 3-4 months, either in the Far East, or if that doesn't work out, maybe at a second location within India. Our team is also growing and brand recognition is getting better and better. So if the posts are more infrequenty you'll know why. I intend to write my next posts on our experience in setting up our 3rd office in the UAE.

Tuesday, June 03, 2008

Customer delight - makes it all worthwhile

When you're in business you have to be geared up for the fact that there will be customers who will have issues with various services and products that you offer. Customer support and responding to customer complaints is part and parcel of any company. While quality controls ensure that your deliverables are up to the mark, sometimes clients can still have reservations about what you have given them.

Especially in the consulting line of business, where we're delivering skills, opinions, and knowledge, it often becomes subjective whether we are meeting with client expectations or not. Managing customer expectations is one of the biggest challenges of being in this line of work. In a number of cases, the end result of the engagement is a report or a set of documents and presentations. And very often during the course of the engagement the client often voices their differences of opinion and displeasure at some of the deliverables.

With one of our clients, I almost got into an argument over some points related to the consulting services we were providing. I do strongly recommend to my team to avoid arguments at all costs, unless it is an absolutely critical issue. Disagreements should be voiced, but spats should be avoided. Coming back to this particular case, eventually the client was pleased enough to give us the following testimonial, and it is events like these that make consulting completely worthwhile...

“KK and his team did a brilliant job in guiding us towards the 27001 certification. Their approach was very methodical and systematic right from the stage of gathering requirements in the initial stages to the documentation work and then trainings and audit readiness stages. In fact what I liked the most about their approach was that he focussed on transferring his knowledge to us which has enabled us to sustain the improvements even without his involvement. They never restricted themselves to the scope of the contract. They were willing to that extra mile to make sure that it added business value to us."

Friday, May 09, 2008

Narayana Murthy on Entrepreneurship

I was privileged to attend an interview of Narayana Murthy, the co-founder of Infosys Technologies. The interview session was part of a "Leaders and Learners" session organized by TIE at Welingkar's Institute in Mumbai. Murthy was interviewed by Anuradha Sengupta of CNBC TV18, and a select panel of entrepreneurs. Then the forum was thrown open to questions asked by the audience. Here were some of the key takeaways from this brilliant and humor-filled session:

Q. What does it take to start your own venture?
NM: You need 4 things before you can think of starting your own venture:
1. Idea. The key idea or concept of the service or product you want to sell in the market
2. Market value of the idea. You must have a basic level of confidence in the fact that the market values your product and is willing to pay for it.
3. Team. You must have a team of complementary skillsets - so identify your own strengths, and find people who have different, but complementary strengths.
4. High aspirations. You must be someone who sets his/her sights high, and is willing to work very hard to achieve those aspirations.

Q. What must a startup do for branding?
NM: Do unusual things. Infosys has always attracted the press and positive publicity by doing unusual things, which interest people.

Q. Who were your idols or people you looked up to?
NM: When we started our business, there were already well-established business leaders who had founded and expanded their companies while sticking to sound ethical principles - JRD Tata, even Mr. Birla, TVS, Mr. Kirloskar. Of course, by that time Bill Gates had also become well-known. Intel was one of the foremost examples of success for most security companies to follow.

Q. What is a non-negotiable component when starting your own business?
NM: A sound value system. You have to lead by example, you must walk the talk, eat your own dogfood. Only when will your team trust you implicitly, and only then will they deliver and help achieve the common goals.

Q. What are the characteristics of a successful entrepreneur?

  • Ability to work with other people and work in a team
  • Passion and will to persevere
  • High degree of optimism
  • High aspirations for oneself and for the company
  • Ability to put long-term interest ahead of short-term benefit

Q. How do you judge the value of your idea?
NM: You should be able to express your idea and its value to the market in a simple sentence. Not a compound sentence, nor a complex sentence.

Q. How do you attract and retain talent?
The leadership must articulate a grand vision - an exciting future. This will create a challenging work culture and attract future leaders to the company. The vision must be a story that is compelling, believable, and intrigues and excites the minds of the team members.

Q. What do you think about work-life balance?
I remember K V Kamath's answer to this question: first let's make a life, then think about work-life balance. I don't understand the concept of a work-life balance.

Q. How do you define success, and at what stage did you consider yourself successful, and why?
NM: I have thought a lot on this subject, and my definition of a successful person is one who when he/she walks into a room, people's eyes light up. If he/she brings a smile to people's faces, then irrespective of whether that person is educated, not educated, self-employed, employed, I would still consider that person to be successful. And going by that definition, I am still not sure whether I would consider myself as being successful.

Interestingly, Murthy's favorite books are Richard Feynmann's "Lectures on Physics", and "History of Mathematics" vols 1,2,3.

Wednesday, May 07, 2008

How to get started on your own business

Just a quick short post to answer a number of similar sounding emails I get on how to really get started on one's own business. Here's the lowdown on the logical flow of any enterprise from birth to growth.

  • Ideation. The idea is the key. First come up with what you want to sell. Whether it is a product or a service or a combination of both. The main thing is to come up with an idea or a set of ideas.
  • Marketability. The next step is to test the market for the viability of your idea. Before you quit your job or your college or even your current venture to start a business, you must have a reasonable amount of confidence that the idea works. You might even be looking at funding, so before you approach friends/family/VCs you should be convinced yourself that your idea has a market.
  • Team. This is a tough ask. But if it is possible you should put together a team that complements your skills. So for instance if you are technically very good, find out someone who is good at marketing, and if possible, also someone who is good at finances. When I started out, I filled in the technical strength, and my father was around for the financial part. We still remained weak on the marketing front, and it took us quite a few years to fix that.
  • Business plan. The next step is to articulate your idea. To put together a formal business plan which outlines your main idea, lists out potential target markets, the resources required to bring the idea to fruition, the competition you face, a SWOT analysis, projected cash-flow for the next 2-3 years, and most importantly your team profile.
  • Funding. You may or may not need funding. So this stage would be one where you go out and seek the minimum amount of money that you need to start off your business.
  • Registration & Incorporation. There are legal formalities to be completed before you start on your own business. For a sole proprietorship, there is not much to do, but for private limited there is quite a bit of paperwork you will need to get done.
  • Stationery & Website. You will have to get your basic marketing material in place - a website, visiting cards, logo, letterheads, etc.
  • Execution. This is the rest of your life - beat the pavement trying to get clients, call up all your contacts, try to advertise and market your services/products in the best manner possible, land a few deals, execute on them, invoice them, get the money in the bank, go treat yourself to a nice dinner somewhere!

Friday, April 18, 2008

How I got my first 5 clients

Someone suggested that I should write a post about how to market a consulting service. While I have a post on the subject, the reader also suggested that I could write about how I got my first five clients. As you might guess, most of these project wins were due to luck rather than any marketing skills from my end. In fact, our first marketing person came on board only after 3-4 years of being in business.

  1. Client #1 - State Bank of India. Sitting around in office, we asked ourselves (there were only 2 of us), who needs our services most. The answer was banks. Who's the biggest bank in town - the State Bank of India. So we went to the SBI website, found a link to their organizational chart, found out the number of their chief manager - IT, called him up, and went to meet him. We explained that we could do a penetration test - an attempt to break into his site after receiving proper authorization from him. He was convinced, we sat down to negotiate the price, and within a month we had our first order.
  2. Client #2 - Western Railways. A friend of my father's heard about my venture, came to meet me, introduced me to the head of IT at HPCL who was a friend of his, who in turn introduced me to head of IT at Western Railways, and we did a free penetration test for him. Later on, he gave us the contract to fix the vulnerabilities.
  3. Client #3 - a US security firm. An elderly gentleman from the office next door to ours used to drop by to chat away, since neither he nor I had much work back then. On his 3rd or 4th visit he actually asked me what I did. I tried to explain to him in layman's language that I was running a computer security consulting firm. He excitedly explained his own know-how on the subject, which was surprisingly good. He then told me that his nephew was in the same business, but in the US. And this gentleman in turn was running a leading-edge security product company. I dropped him an email, his India partner contacted me, and then put me in touch with a leading Chartered Accountant who was doing accounts audits for a number of large firms in India. These firms were approaching him to do IT audits as well. These he started to outsource to me, and we still do excellent business with him. Later on the US company also outsourced security research work to us.
  4. Client #4 - Directorate General of Shipping. The head of IT at Western Railways was a good friend of the head of the Directorate General of Shipping. When the DG Shipping person spoke with the WR person about an IT problem he was facing, he recommended my name.
  5. Client #5 - Middle East partner. In our free time, we used to keep ourselves busy developing free tools, writing articles, and trying to get speaking engagements at various seminars and conferences. All these activities resulted in increasing our visibility and enhancing our brand image. It also helped enhance our individual consulting profiles. A security solutions company from the Middle East contacted us for selling them one of the tools we had built. We explained that the tool was free, but they wanted us to make modifications to it, and asked us to price the effort. That specific deal never went through, but slowly they started outsourcing various security engagements to us, until the Middle East became our largest source of projects.
So to summarize, some of the things that a fledgling consulting firm could do is focus on:
  • Use references, contacts, and word-of-mouth as much as you can. I still evangelize my products and services shamelessly at every opportunity. But there is a way to do it
  • Search engine optimization
  • Writing articles, toolkits, and maybe even books on the subject
  • Contacting the larger consulting firms in your space so they may throw some projects your way
  • Hold free workshops for people who might be interested in the subject

Wednesday, April 09, 2008

The art of the bounce back

We all talk about the fact that winners never quit, and quitters never win, etc. But here's a very nice article that talks about the fact that most high-achievers in life usually fail often, and fall harder than most of us. But then they also succeed far more spectacularly. So I guess it is about taking calculated risks and sticking with your ideas if you really believe in them.

The article talks about Steve Jobs who was unceremoniously kicked out of Apple, and then was brought back in to script one of the greatest turnaround stories in corporate history. Not to mention his amazing success with Pixar animation, and of course the iPod and iTunes and iPhone innovations. It also talks about Donald Trump (read his Art of the Deal) for someone who went completely bankrupt and then rose back again to become a multi-billionaire.

Then again you should not be one of those people who stick with an idea even though it has no chance of working. Here's the irrepressible Seth Godin in "The Dip - a little book that teaches you when to quit".

Tuesday, February 26, 2008

Interview on entrepreneurship

Quite some time back (when my blog used to be anonymous) I'd done an interview with the folks over at Voice of Ambition (VOA). Now that the blog isn't anonymous, I thought it would be a good idea to link to that interview in case anyone wants to hear it. Here are the details:

"K. K. Mookhey founder of NII consulting tells us how he quit his engineering and started his own company. He answers questions like where did he get his capital from? What was his business plan? How much was his initial capital? How he registered his company? How much it costs to register a company? What sectors provide an opportunity for new entrepreneurs? Who is their first client? Who is their biggest client? Is he willing to provide advice for new entrepreneurs? And much more."

Direct link to the episode is

Friday, February 22, 2008

(Almost) all your income tax queries answered

I just chanced upon an excellent blog that has answers to quite a few interesting income tax queries. I don't like the layout of the site, but the content is quite good. Check out Tax Worry.

Monday, February 18, 2008

Insights of the day - building a core management team

I happened to attend another excellent TiE session on building a core management team. It was headed by Parag Paranjpe, Director, HR at ICICI Venture. Some of the key takeaways from the session based on inputs from Parag, and the other attendees were:

  • Talent looks out for opportunities for that talent to be harnessed. So your key USP has to be what opportunities do you provide for exploiting potential.
  • Star employees look for autonomy and freedom - an equal stake in the organization. They want to make the organization bigger and share in the wealth that they help to create.
  • Every leader must aim to make himself/herself obsolete in order for the people working under that leader to reach their full potential. The leader must then redefine his role and responsibilities and work to achieve a different set of goals.
  • One of the most important attributes to look out for in a candidate is personal integrity. And the best way to determine this is to check for references and learn to read between the lines when the references respond to your queries. Parag gave an example of ICICI Venture contracting an international firm to do a background check on a candidate they were hiring for their Zurich office. And they looked at the huge fees paid to this firm as an investment that would pay off. But he said, that was only reducing the risk, we still would never know for 100% sure if all that we were told by the candidate is correct or not.
  • Also, while hiring try to determine whether the employee is joining you for money or for a higher purpose. Does the candidate seem to buy into your vision or is simply making the jump for a better pay package?
  • The past history of a candidate is the best indicator of future behavior. Dwell into it, and ask deeper questions based on the candidates previous profile. Everyone promises great things in the future, but have they delivered in the past?
  • Try to determine as accurately as possible the real reasons why the candidate is leaving his previous company and joining your company.
  • Another important aspect is the cultural fit. How well do you think the candidate would fit into your existing corporate culture. If your existing culture is open and autonomous, does he or she have the ability to work and excel in such an environment or is he/she a very hands-on micro-managing type leader?
  • Other ideas were to ask candidates to write down their answers on questions such as achievements, failures, goals, and dreams, rather than ask them to answer verbally.

Friday, February 15, 2008

Insights for the day - V. S. S. Mani from JustDial

I just came back from attending a very insightful personal session with V. S. S. Mani the founder of Just Dial, which was organized by TIE.

JustDial was started somewhere in 1995 after a lot of false starts by Mani, who was earlier director at Ask Me services. Started with a capital of Rs. 50,000 it is now a Rs. 100 crore company with a valuation of over Rs. 500 crore. From days when they were selling wedding planners to generate revenue to today where PE's and venture capitalists are being rejected because they simply don't want any more funding. Here were some key takeaways:

  1. When the whole world and its aunt was harping on about the dotcom boom, Mani decided to continue his information services business through the telephone model, and not chuck it all away for an online model. He profited at that stage by selling part of his stake to a US investor, but didn't spend truckloads of cash on building a dotcom and promoting it. He says the Internet infrastructure was so pathetic in 2000-2001, that there was no way that a dotcom business would possibly work well.
  2. The key to a successful business is scalability. If you can tell a story to your employees, your partners, and your investors about how you're going to be scaling up the company, how you're going to grow and expand, then you've got a winner on your hands. If your business doesn't scale, do it differently, or do something different.
  3. If possible do a short course on financial accounting, and learn the basics about accounting, balance sheets, profit and loss, and cashflow. That is essential, because if you take financially bad decisions your business will crumble. It is like a baby that needs proper care and nurturing.
  4. He doesn't stick to any office hours, but does not believe in delegate and forget. He is not operational, but when he delegates, he follows up - every day! He says, in India, your managers and employees will start nodding their heads about how they've understood what needs to be done, but won't do it, or won't do it right, until you follow up and oversee them.
  5. When you are growing your business, don't be pretentious. Don't try and show off that you're doing great. Investors don't necessarily want to see great infrastructure, they want to see the virtual reality world you are going to build and that you are asking them to invest in that world. Not the world you live in today. He started off with a small cubicle in Nariman Point, before moving to a 300 sq. ft. shop in the suburbs, and then adding two more shops of 300 sq. ft. each. And that was his situation even in 2000 when the US investor decided to pump cash into his business.
  6. When asked about the importance of branding, he said the most important branding is excellent executions. Happy customers will build your brand much better and much bigger than anyone amount of advertising or PR will. Word of mouth is the best publicity you'll ever generate.

Friday, February 08, 2008

Married to your idea?

I just had an epiphany of sorts a few days back.

I was attending a TIE forum meeting, when Manak Singh, the convener of the forum and I began exchanging notes on business in general. And he told me that at an earlier TIE conference, they had invited Vivek Paul of Wipro. One of the key things Paul said was that the problem with a lot of Indian entrepreneurs is that they often get married to the idea with which they start their business.

They first decide that they are going to sell a particular service or product, and then go out to look for a market for that service or product. The way it should ideally work is an outside-in approach, where you first see what the market really demands and then try and deliver that, instead of an inside out approach.

The entire discussion started when Manak Singh asked me about scalability, and I said pure security consulting services does not seem to have the ability to scale - the market demand does not enable the kind of growth that I would ideally like.

I then took this discussion to our annual bootcamp, where once a year we all meet and present on various topics, and throw ideas around. When I presented the vision for the next 3 years, the teams started to question our ability to achieve the numbers based on pure consulting services, and then the suggestions started to pour in. We need to go beyond just pure advisory services, get into implementation, product reseller-ship, and maybe even into network and system integration.

I'll keep posting on how the expansion plans work out, but I got a good feel about this. Although, we might have been earlier leaving money on the table by not aggressively pursuing other projects, it won't be the case any longer!

So maybe a key question that an entrepreneur needs to ask is whether they are the only buyers of their idea. And maybe even more importantly this is a question that entrepreneurs need to keep asking throughout the lifetime of their companies. I could quote a couple of very interesting examples here: Nokia started off as a wood-pulp unit, then was bought over by a rubber manufacturing company, and then merged with a company manufacturing telephone cables. This fusion company was manufacturing paper products, bicycle and car tires, footwear (including Wellington boots), personal computers, communications cables, televisions, electricity generation machinery, capacitors, aluminium, etc.

Another intriguing example is 3M, their most popular product being the Post-It notes. Very few people would know that the name 3M stands for Minnesota Mining and Manufacturing Company, which went through a financial crunch, got out of the mining business, and became what it is today because the people running the company did not feel that they had to remain "loyal" to the original idea! Read about its fascinating history here.

Thursday, February 07, 2008

Funding your business using credit cards?

I just came across an article about using credit cards to fund your startup. Although, the article is for the US environment, I think this is a patently bad idea, especially in India. The current interest rates on credit card debt are close to 2% per month, which is 36% per year! If that is not usurious, I don't know what is. It might actually be cheaper to go and raise money from your neighborhood money-lender!

The rules in India allow the directors to pay for certain expenses of the company from their own resources, and to then get reimbursed a few months or maybe a year or so down the line when the company has started generating enough funds. Knowing that fewer than 5% of new ventures actually succeed, why take such a huge risk and be saddled with debt and surmounting interest costs?

In any case, rolling over credit card debt, or switching from one provider to another just because you're exceeding your credit limits on the first card, means that you're spiraling way down a debt trap. Doing this, when trying to get your business up and running is a horribly bad idea. So don't fall for the temptation of abusing your credit ratings you might have built up by religiously paying off your credit card bills while you were in a regular salaried job. Your income when running your business is going to be close to nil for the first year or so. It is far better that you work harder at building up the funds yourself or rallying family and friends around to the idea of supporting your business.

Tuesday, January 15, 2008

Choosing my problems

One of the biggest challenges of being an entrepreneur is the fact that in most cases you've got to fight your battles alone. Some of us have mentors, some of us come from a family with a business background, and maybe some of us have an excellent core team. But for a lot of us, the problems that we face in running a small-medium business are more or less entirely ours to face and resolve. Whatever be the case, one has to accept that problems will occur. There is no business, or for that matter no serious activity, which is not beset by its own unique set of problems.

The trick is to accept this fact, and to face most of your problems with as much equanimity, humility, and introspective ability as you can. In most cases, I find I can manage all these virtuous qualities in some measure or the other. Cash-flow issues - we've faced them earlier, and have managed to come through. Plus the receivables list does tend to give one comfort that sooner or later the money is going to come through. Client issues - some clients are generally painful, most others have genuine grievances. Nothing that cannot be resolved by openly asking them what they would like us to do, negotiating the extent to which we'll go, and then delivering on it. As long as they see we are sincere in our commitment, they'll usually stop being adversarial, and start looking at how they can work with us to solve the problems at hand. Lack of a strong pipeline. We've faced that situation earlier as well, and usually the lull lasts for no more than a month or so. A weak pipeline also means people sitting twiddling their thumbs. But constant communication, research projects, and trainings can help keep them productively occupied. Employee performance issues - again set targets, agree on them, measure them, and if they consistently under-perform, ask them to leave.

The one problem where I can simply muster up no equanimity is attrition. And we usually have waves that come in about once a year, when the level of attrition can quite simply be called an exodus. Each time, I try and introspect what we could have done better, and we try and do it. And each time it seems as if we're building a castle right near the shore, and a huge wave comes in and washes it right away. Last time around we introduced incentives and a team structure to help curb attrition. I also reduced my own involvement in project execution. This time it seems we need to dig down deeper to find out what we need to do, to get ahead of the attrition ratios that plague us. What hurts about attrition is the feeling of loss. You spend time building a relationship, investing in people's learning/training, you see them grow in confidence and technical skills, and then one day it's pretty much all over. I can tell you the worst day in office is when an email with the subject-line "Resignation" or "Sign-off" or whatever term is vogue lands up in my inbox.

So if I had to choose my problems - I'd say give me anything except attrition.

Thursday, January 10, 2008

Due diligence of Indian companies

Came across an interesting paper on what investor should look for when investing in small and mid-sized Indian companies. It is an important read, because for a small business entrepreneur it gives you a lot of ideas on what your company should have to be able to impress a potential investor. The full paper can be downloaded here.

Here is a summary of the key points from the paper:

Operational legitimacy - is the company running a legitimate business, or are the bulk of its revenues coming from front-ending operations. There have long been rumors that a number of small and mid-sized IT companies serve as fronts for small to large amounts of money laundering.

Quantitative Criteria Matching - most investors have specific criteria which the target company needs to match. These are typically in terms of turnover, profitability, number of years in operation, etc. If your company does not meet these criteria - say $2 million in turnover - it would naturally not be in contention.

Leadership & Management - the investors will want to see who is in your core team, or even if there is no core team, they would want to evaluate your skills in terms of management ability, leadership, vision for the future, principles and values you espouse, your track record, and experience either working for other firms or successful ventures in the past.

Growth potential: How quickly can your product/service lines grow, and if they cater to specific market segments, are those segments by themselves also poised for exponential growth in the overall picture of the country's economy? What is your business plan, and what strategies have you envisaged to achieve your targets, and your degree of innovation.

Possible exit strategies: At the end of the day, all investors want to see returns on their investments. And investors in small- to medium- firms are usually taking a much higher risk, and consequently would expect much higher returns. Especially, since only 10-20% of their investments actually pan out.

Market reputation: What do your customers, your partners, and your employees say about your firm? As a small business it is unlikely you will have achieved a lot of press publicity, so your reputation almost completely depends on the people who know you or your company on a one-to-one basis.

Wednesday, January 09, 2008

NEN - an interesting resource for entrepreneurs

I was recently contacted by the NEN - the National Entrepreneurship Network - to take a look at their website and what they do. I quite like the resources available on their website, and would recommend that you may read up on some of the more interesting articles and interviews. They also have an Ask The Expert section, where they have experts address various aspects of entrepreneurship.

They claim to be non-profit, so I guess they will continue to provide as many resources for free as they can. Some of the links I would like you to check out would be:

  • Ask the Expert. The current link features Pradeep Gupta who answers questions on Angel Investing
  • The Weekly Startup. This section looks at promising and successful startups and can be a good source for ideas and inspiration.
  • Resources. All the rest of the resources on the website packaged together
So let me know if you liked the website, and I'll check and see if there are other such websites out there.