April 25, 2005

What motivates Indian entrepreneurs

Business Standard has an interesting article on the above topic based on a survey conducted by Subodh Bhat and Richard McCline of San Francisco State University:
The respondent entrepreneurs were motivated primarily by the desire to create something new, the desire for autonomy, wealth and financial independence, the achievement of personal objectives and the propensity for action ('doing').

The excitement of entrepreneurship was another major motivator -- this was nicely captured by one comment: "We are not sure what's coming down the curve but it is a thrill." Importantly, most entrepreneurs stressed that the objective was never money for its own sake.

They wanted to leave a legacy in the form of a profitable long-lasting business.

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

April 16, 2005

Model investment documents

Paul Allen points to a great resource page on the US NVCA's (National Venture Capital Association) web site hosting a set of public domain model legal documents including a model Term Sheet, Stock Purchase Agreement, Certificate of Incorporation, Investor Rights Agreement, Voting Agreement, Right of First Refusal and Co-Sale Agreement, Management Rights Letter, Model Opinion Letter, and Model Indemnification Agreement.

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

Start-up business plans are useless: Mike Moritz

According to BusinessWeek's Deal Flow blog, Michael Moritz, a general partner at VC firm Sequoia Capital and an early investor in Google, Yahoo! and Cisco, while speaking at the VentureOne conference in San Francisco told a story about Google that demonstrated why VCs always say they invest in entrepreneurs or ideas--and not business plans.
As you might know, Google started out thinking it would sell its technology to corporations for internal use. After a year or two, that plan clearly wasn’t working. So the entrepreneurs started casting around for another strategy. "There is nothing like a declining cash balance to focus the mind," Mortiz quipped. Google's founders noticed the success of GoTo (later renamed Overture and bought by Yahoo) and set out to improve on its paid-search model. The rest is history--and so is Google's original business plan, which, to the founders' credit, they never formalized.

When evaluating a nascent startup, Moritz doesn't look for a detailed blueprint of the future. "The longer the business plan, the worse the prospects for the company," he said. "The more comprehensive the financial projections, the more unlikely a company is to meet those expectations." The business plan for Intel was famously written on half a sheet of paper. Yahoo! never had a formal plan, Mortiz said. But in both cases, the founders had a very clear idea of the product or service they wanted to build.

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

April 15, 2005

Hustle, Passion, Resiliency

Jason Calacanis has a great post on the three things that entrepreneurs need to succeed:
The older I get the more I realize that business is about three very basic things:

1. Hustle
2. Passion
3. Resiliency

You have those things it really doesn’t matter what the idea is… you can change your ideas all day long, in fact evolving is what you’re supposed to do in business. However, you can’t substitute hustle, passion, or resiliency.

Aside: I absolutely agree on Passion and Resiliency. But, I didn't fully understand what Jason meant by "Hustle" and hence bunged it into Dictionary.com to get the following results:

1. To jostle and push.
2. To work or move energetically and rapidly: We hustled to get dinner ready on time.
3. To act aggressively, especially in business dealings.
4. Slang.
1. To obtain something by deceitful or illicit means; practice theft or swindling.
2. To solicit customers. Used of a pimp or prostitute.
3. To misrepresent one's ability in order to deceive someone, especially in gambling.

I assume Jason did not mean the slang stuff, right?

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

April 12, 2005

Hey, wanna go public?

I got the following unsolicited email today:

I hope this finds you well, as you may already know, we specialize in assisting companies in Going Public. We also assist with Private Placement preparation. The President of our company is a very experienced securities and corporate law attorney.

Many people are not aware that any company can go public. Please go to see our site to receive our Advantages of Going Public Report and our Go Public Report.

We would like to propose a joint venture with you. If you or an associate of yours is interested in taking a company public, please let us know. We are happy for you to be very generously compensated for any referrals.

I wish I could convey, all the many benefits of going public in a letter. I'm not sure if you can imagine how valuable and powerful a public company can be in achieving your goals and objectives.

We look forward to developing a long term business relationship.


Sincerely,

Shaun Anthony
http://www.hipub.net/



#CSDGI-MW
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P.S. If you prefer to not hear from us any further, email us with no longer in the subject.
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Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

April 01, 2005

VCs respond to Paul Graham's "VCs Suck" post

Quite a few VC bloggers have responded to Paul Graham's essay on "The Unified Theory of VC Suckage".

"I do not aspire to defend VC's. Like everything else, there are good people and bad people, good Germans and bad Germans, and good VC's and bad VC's," says Globespan Capital's Venky Ganesan

"I won’t even try to defend my VC brethern since Paul’s theory is sound in many ways. He admits that he’s met a few VC’s that he likes, so there must be something messed up in the universe somewhere," offers Mobius VC's Brad Feld.

Fred Wilson of Union Square Ventures refers to Feld's days as an entrepreneur, when
his mantra was that all companies sucked in servicing their customers at some level and the goal for his company was to suck less. Entrepreneurs are always going to think that VCs suck at some level. But clearly some VCs suck more than others. If you must fund your company with VC money, it pays to do your homework and find the ones that are the exception to Paul's unified theory rule.

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

Your craft alone isn't enough to start-up

Karen E. Klein, a BusinessWeek columist offers sound advice to a question from a wannabe entrepreneur who wants to start a 3-D animation and visual-effects company:
Most would-be entrepreneurs..,are experts in their craft and have good educational backgrounds, but they know little or nothing about accounting, pricing, making cost-projections, marketing, strategic planning, or employee management -- all crucial to business success.

The article points to the US government's Small Business Administration Web site which includes a survey that will help size an individual's suitability to entrepreneurship, a guide to writing a business plan, and tips about financing.

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

Managing Programming for CEOs

Tom Evslin has a great 4-part series under the above title.

An Extract from Part 3, "Managing product development projects":
Everyone knows about the “killer features” which propel software products or websites to stardom. Much more common are the unneeded features which destroy schedules and kill development projects. Evslin’s Law #1 is that the time required to complete software is proportional to the square of the number of features. Law #2 is that schedule predictability decreases in proportion to the square of the length of the project. Quite literally, a project with too many features will never be completed.

To get software projects done with a modicum of predictability, make three lists:

* Priority One are those features without which the product couldn’t possibly ship – printing for a word processor is a good example.

* Priority Two are highly desirable features.

* Priority Three are nice-to-haves...

If you are managing version 1.0 of something, it is particularly important to hold the line on features and get the software out to your users fast. Why? Because you don’t know what features are important until you get user feedback. The bell or whistle you thought was so cool that it would be blow users away will end up never getting used. Something nobody ever thought of will turn out to essential and you won’t find that out until real users – not beta testers – have the product. Then you can hustle and get that real must-have into version 1.1 before your competitors know what’s happening.

Remember I said that you should save the Priority Two list for the next version. The purpose of that is mainly to show you how wrong you and your team were about what is important. When you make the priority lists for the next version, Zero and One will be populated by those things your users, tech support, and marketing people discovered AFTER version 1.0 shipped. Stuff that was on the Priority Two list for version 1.0 will end up on the Priority Two list for the next version as well. Priority Three features, of course, will be long forgotten.


Another from An Extract from Part 2, "Done is a Four Letter Word::
There are a bunch of other “dones” in programmer-speak – code-complete, feature-complete, alpha-ready etc. Ignore these. They have no value in telling you, the CEO, when the thing is actually going to reach whatever doneness you are interested in.

Having agreed on a definition of “done”, you then want to ask on every occasion when the project is going to be in that state. There is only one answer to that question: a date. Anything else anybody tells you is just blowing smoke. The date is what you want to know; insist on hearing it at every opportunity. Don’t be lulled by any yardsticks like “halfway there” or “right on schedule”. Just the date, please.

You will be told by the engineers that the project doesn’t lend itself to this methodology, that you will slow things down by creating these artificial waypoints, that they can tell you on a biweekly basis how far along they are without this. This is not something you can afford to give in on. Accept no substitutes for testable milestones.

An Extract from Part 1, "Decompiling Programmer-Speak":
As a CEO or hope-to-be CEO of a technical company, it is essential that you crack the code. Otherwise you will have no hope of knowing when any particular piece of essential development will be done or even what it will do if it is ever finished. Today’s blog is a phrase book of programmer-speak. Soon I’ll blog some secrets on actually managing programming projects.

“It’ll be done ASAP.”

Translation: There is no schedule yet.

“That feature shouldn’t add any time to the schedule.”

Translation: There is no schedule yet.

“It’s fifty percent done.”

Translation: It hasn’t been started yet.

“It’s ninety percent done.”

Translation: The remaining ten percent will take ninety percent of the elapsed time.


Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.