Need a business partner / CTO / Techie / Super Geek to build beta products @ZaakCo

10 Oct 2009 at 03:06

Upasana

Entrepreneurship, India, Products, Technology, ZaakCo

9 Comments

I have this mostly untested BHAG – big, hairy, audacious goal in business lingo. The BHAG is to ideate, build and launch beta products in order to early exit (by sale or spin off).Key assumptions I am making are:

  1. In today’s day and age, building simple “need fulfilling” products and getting a read on their performance in the market within 6-9 months is not impossible.
  2. Further, with the right team, this can be done for multiple product ideas one after the other.
  3. If you are detail oriented and a fast learner, you do not need 10 years experience in a particular domain before building a product for it.

From an initial pool of a dozen ideas, I have chosen 3 concepts to start with based on their business case. These products concepts are in the ecommerce, online payments and mobile VAS spaces; 1 is for the Indian market and 2 for global customers. The intent for an early exit is not borne out of greed for $$$, it is so because building products is the most exciting part. And the more diverse products we can build, the better it is for challenging our brains @ZaakCo :)

Requirements for business partner / CTO / Techie / Super Geek:

- High energy, self-starter, risk taker, street + book smart, no ego/drama/God complex
- CS Bachelors degree preferred; non-CS works with right experience!
- Equally comfy with mySQL, JAVA, PHP and the open source toolbox to tend to both the front-end and back-end of a product.
- Experience and/or interest in some product verticals, must contribute to concept development also not just coding!
- Compensation: equity and/or minimal salary
- Suitable age 26-36 years
- Location Delhi NCR, India

All the other normal stuff you would want to know:
- Company is Zaak Consulting, www.ZaakCo.com, @ZaakCo
- I am Upasana Taku, 1 year as a Management consultant, 4 years as a Product Manager @HSBC + @PayPal, 2 years @Stanford, 4 years at @NITJ, http://upasanataku.com/?page_id=2, @upasanataku

Online Payments Ecosystem & Payments in India

26 Sep 2009 at 17:10

Upasana

Customers, Entrepreneurship, India, Products, Technology

15 Comments

Recently, an article by Sanjay Goel (of MustSeeIndia, an Indian travel site) on Pluggd.in about Payment Processors in India sparked my interest. The  discussion highlighted 2 prominent points for me:

- lack of awareness about existing Indian + global payment options amongst Indian businesses (entrepreneurs, technologists, startups). Some users even suggested that PayPal is illegal in India.

- few merchants discussed real features (that they should demand more of) offered by their payment provider; most (and rightfully so in the Indian context) were concerned with pricing and ease of integration.

I thought it would be great to introduce the key players in the online payments ecosystem (also called e-payments or web payments) so everyone understands the differences between a payment gateway, a payment processor and a 3rd party payment platform.

Payment Processor is a huge banking or financial organization which is a super aggregator of financial transactions (online and offline) and is generally directly hooked in to the country’s payment engine. These processors acquire transactions from their own banking chain, smaller banks, payment gateways, 3rd party payment processors, etc. and settle the transactions multiple times in a day. An example of this is Chase Paymentech in the US.

Payment Gateway is a company that processes your financial transactions by acquiring the transactions from you, securing authorizations and managing settlement of funds. The gateway is one partner you integrate with which in turn connects you with card networks (Visa, Mastercard, American Express) and banking networks (domestic, international). Essentially, this is a transaction aggregation and settlement business with very low margins. Globally, Authorize.Net is a well known gateway. Before payment gateways came by merchants had to integrate individually with each card network; imagine the inefficiency in terms of cost and wasted time that a gateway saves you!

3rd party Payment Platform or Payment Provider is a company that uses a payment gateway or a payment processor as its transaction processing back-end, interacts with you through a front-end wrapper product and acts as your payment outsourcing partner. Such a company not only processes financial transactions for you but also provides you value added services such as shopping cart widgets, payment buttons, on your site and SaaS solutions, transaction reporting,  real-time fraud detection, custom risk management filters, an installed base of their e-wallet users, etc. PayPal with 184 million accounts is currently the poster child in this space. Google Checkout and Amazon Payments also fall in this category.

A visual representation of the payments landscape for a credit card transaction is well documented in a How it Works diagram at Authorize.net

Think Payments, Think India

- Payment Gateways (CCAvenue, EBS, DirecPay) in India currently charge like 3rd party payment platforms but offer no (and limited if any) value added services. Their technology and customer service are both serious painpoints for merchants. Most gateways deflect the blame on to government and RBI policy regulations, which is appropriate in the matter of pricing.  However, the same excuse cannot be applied to poor customer service or not investing in technology to offer better availability (no timeout errors) and accurately report transaction statuses.

-Bank processors like ICICI PaySeal,   HDFC Bank andAxis Bank (UTI previously) have no amazing service or technology either. In fact, their checklist for a merchant to qualify as their customer is as tedious as their total time to integrate.

- The rule of thumb in India is that banks have higher setup fees (50,000 Rs range) and lower transaction processing fee aka TDR (~2-3%) whereas, the Indian gateways have lower setup fees (5,000 to 30,000 Rs) and fees from 2.5% to 7%. None of the current payment options in India are plug and play with integration time being roughly 1-2 weeks at the minimum. This is obviously a far cry in times when global businesses can integrate the “Pay by PayPal” button on their e-commerce websites in 24-48 hours!

- EBS seems to be a popular choice in the current landscape while CCAvenue, has the biggest market share after a decade of its monopolistic regime. CCAvenue charges top dollar at 7% transaction fee and offers web 1.0 like services; in the interest of developing ecommerce in India I seriously hope new payment innovators will soon emerge with richer features.

- One of the major reasons for the high transaction processing fees is the fact that credit cards are still not processed domestically. Every time you swipe a credit card in a restaurant or buy an online ticket your merchant’s payment gateway actually has to connect with another payment gateway/processor that links it the Visa, Mastercard and American Express card networks to authorize the transaction. This is because we, that is India is not yet setup with a national payment network to do that. (Note with NEFT and RGTS we can do this for bank transfer but not credit cards.) National Payments Corporation of India NPCI was incorporated in December 2008 and their charter is to bring safe, easy, cheap and more payment options to the Indian market by 2012. Payment geeks are your listening? Drum up your ideas!

- Accepting and processing payments on the web is a big hurdle for e-commerce and web startups in India. No existing payment provider is doing more than ultra basic money movement. Slim pickins! Its early days in the world of online finance in India and we have a ton of innovation to look forward to.

How to choose your payment partner?

The key criteria you should think about are:

- Product Features (what do you need: one time or recurring payments, single or multiple currencies, high value transactions thereby need solid fraud detection or micro-payments, mobile, web and offline payments)

- Pricing (again depends on your average transaction ticket value and margins; if you have higher ticket size and margins PayPal and other global players could be viable solutions for you; for micro-payments banks may be your best bet)

- Uptime (This is a point that is not brought up as much as it should be. If you are a web company our revenue depends on accepting payments 24×7, please consider inquiring about server up-time/availability statistics)

- Integration (do you need an agile partner with faster process or can you live with a slow moving partner that will offer the cheapest TDR but will take you 2 months of wait time for the first live transaction)

- Customer & Technical Support (you do not want your transaction engine’s foundation to be based on a partner that wont respond to your tickets for 48 hours; listen to what other merchants are saying)

Dissolving Myths about PayPal

Paypal is illegal in India–> PayPal is not illegal.

The current PayPal offering is in USD because it has been set up to cater to the cross border business on eBay that is seller in India and buyer worldwide. The current online volumes in India would not make sense for PayPal to create a custom payment solution for Indian Rupees (INR). For various markets PayPal has launched local websites that offer payments in local currency! Try India and see products at PayPal Offerings Worldwide.

In fact, with no setup fees, a speedy integration and a robust feature set, PayPal’s 2.9% + 0.30$ fee per transaction (for monthly sales of 3000-10,000 USD) is far better than CCAvenue like players at many mid to high ticket sizes. The only reason PayPal is not more popular with Indian web businesses is the 0.30$ which becomes a huge number when converted to Indian Rupees especially for low value and low margin transactions.

was incorporated in December 2008

Who are women entrepreneurs?

10 Aug 2009 at 18:55

Upasana

Entrepreneurship, India

No Comments

Off late there has been a lot of online buzz about female or women entrepreneurs or may be its just my ecosystem connecting me to all things entrepreneurial.

I appreciate all of these initatives on one side – they encourage and showcase women in action in their respective fields of work. From the daily wage construction laborer to a small business owner to a CEO – they all should be applauded for their hard work and success.

On the other hand, does sex need to be a part of it? Is a person’s genetical framework relevant to their work? May be entrepreneurs should be applauded regardless of the sex they were born with. We all know there is no such thing as a man or woman entrepreneur. Yet we sometimes qualify professionals like doctors as male or female. Same goes with CTO, CEO, founder, Prime Minister, President, etc. Why do we do this?

Do we make any changes to the job requirements when its a man vs a woman?  No. Then why do we need such so called prefixes? I think these are just signs of how different people percieve. Personal biases remain a part of the normal social fabric worldwide, but it matters how we apply them in our decision making. If person X is paying for massage services, the person may prefer a masseuse or masseur as a matter of comfort. This may be a personal preference but to what extent is it valid? a> the gender based preffered service provider may provide worse quality b> in today’s age since you can’t tell a person’s sexual preferences, the same sex service provider might possibly cause you more discomfort. While this was a simple example of daily life biases, by the same token can people rationally apply the same comfort based bias while choosing a President or a Board Chairman?

History has taught us globally and specifically in India, that creating special fast track programs and/or reservation laws (for educational institutions and jobs) based on candidate sex, caste, religion, etc. creates more boundaries than the imaginary glass ceilings they break.

In that vein, a special interest group for women indicates to me that there is something lacking with all the existing groups @ TIE, Delhi and the avenues they offer to women for professional growth and networking are limiting in some fashion or the other. If such is not the case, then women can and should participate in the TIE groups of their industry and interest areas.

As a matter of logic, if one considers a woman an equal then by defintion she needs no special treatment. Having special groups is akin to segregation, which Dr Martin Luther King aptly explained to the entire world – is not an acceptable solution to any problem. What is the best way to treat the problems at hand:

- fewer women in higher ranking roles

- fewer women in certain industry sectors

- fewer women in the workforce than men

Is the solution to:

- ignore the problem, ensure law provides equal opportunity to men and women alike and then let the equally empowered women create their own destinies?

- or to create special rules, special groups, special laws to artificially push up the number of working women?

Where is India on the World Innovation map?

21 Jul 2009 at 17:50

Upasana

Entrepreneurship, Innovation, Products, Technology

5 Comments

As per the International Innovation Index – India ranks 15th while US ranks 2nd behind South Korea which leads the world. Read the full Innovation report (the rankings are on page 10 of the pdf document).

Subhash Menon, the MD and CEO of Subex, and Chairman of the Nasscom Product Forum in his article on the status quo of the Indian tech sector hit the nail on its head –  “It has been established that overseas venture capitalists are increasingly demanding that product firms in the West should locate as many functions as possible in India to save costs. A recent example is that of a Silicon Valley firm that managed to get through two years of operations with only about $5 million (by depending on India) instead of about $15-20 million that they would have otherwise invested. When overseas start-ups have woken up to this advantage, Indian companies should not be left behind. India is today at an inflection point with advantages eclipsing problems for setting up a software product company here.”

So are Indians rising to the innovation challenge?

Enterprising Indians have always been at it albeit at a smaller scale. A couple examples of Indian innovations with global impact show signs of things to come.

A recent economist article talks about Dr. Vivek Jawali and his team and their “beating heart” bypass surgery which causes little pain and does not require general anaesthesia or blood thinners, leading to speedy recovery. This approach, pioneered by Wockhardt, an Indian hospital chain, has proved so safe and successful that medical tourists come to Bangalore from all over the world. This is just one of many innovations in health care that have been devised in India. Its entrepreneurs are channelling the country’s rich technological and medical talent towards frugal approaches that have much to teach the rich world’s bloated health-care systems. Paul Yock, head of the bio-design laboratory at Stanford University, which develops medical devices, argues that medical-technology giants have “looked at need, but been blind to cost.” Amid growing concern about runaway health spending, he thinks the industry can find inspiration in India.

We have all heard of the much touted Tata Nano, the world’s cheapest car with great fuel efficiency and low emissions. The real innovation in the Nano for me is its intended product delivery – the Car in a Box! The open distribution mechanism for the Nano does the same thing to the auto industry that IKEA did to the furniture industry. With American auto makers coming to India for additional revenues, Indian auto maker Tata Motors is now eyeing America as a market in addition to the booming Indian markets.

While these are great examples of innovations from a developing India, given the size of my birth country both in terms of land mass and the population inhabiting it; we will need at least one million innovations to make India the land where people think of ideas and make them happen instead of the land of people who do well what they are told to do by others.

Manoj Kothari, a designer in Pune shares his experiences on his blog about the changing landscape of his client engagements. He says,  ”For me, who saw a lot of rants around the Chinese onslaught of consumer products, the growth of the service economy and two rounds of recession, dating with foreign brands, technologies, collaborations and even consultants; it is heartening to know that India is moving up the value-chain of innovation. It may not be pacing up but inching up for sure.”

Meanwhile, Gordon Orr @ McKinsey Digital argues that China and India are taking it to the next level. He highlights that Indian & Chinese entrepreneurs are forced to be frugal so they tend to leverage heavily on technology and come up with new capital light models. The advantages of scale and talent are intrinsic to the massive countries meaning since there are so many of us ultimately finding talented employees is not a problem; at the same token the market opportunity even for a niche product is 5x  domestically compared to other countries. Gordon also talks about favorable factors like the increasing spending power at the burgeoning low income levels, the government shaping new policies and the rising importance of intellectual property. Specific to India, he does falter when he says that funding startups is an easy proposition with government, VC, private equity, angels, banks all waiting for their $$$ to be invested. Compared to Silicon Valley, I think its extremely difficult to raise money in India especially at the seed stage – bootstrapping is the trend in this part of the world.

Gordon ends his piece on an inspirational note:

“Can India and China sustain this pace and eventually move to the next level of technological innovation? Absolutely. The talent is there, as are capital and effective government encouragement. With stronger protection and rewards for intellectual property—a likely development as international companies begin to license technology from Indian and Chinese entrepreneurs—the stage will be set for the next step forward.”

Lets talk about Product Innovation

08 Jul 2009 at 21:27

Upasana

Customers, Innovation, Products

No Comments

As per Wikipedia, the term innovation means a new way of doing something. It may refer to incremental, radical, and revolutionary changes in thinking, products, processes, or organizations. A distinction is typically made between invention, an idea made manifest, and innovation, ideas applied successfully.

A source of innovation becoming widely recognized, is end-user innovation. This is where an agent (person or company) develops an innovation for their own (personal or in-house) use because existing products do not meet their needs. This is very interesting, normal users unimpressed with off the shelf solutions create new products. An easy example that comes to mind – the Dyson vaccum cleaner. How many times have we all used some daily life product and thought “I could have designed this better myself”, but how many of us have turned our thoughts into actions?

At Stanford Professor Tse says “Users make a product innovative. If users cannot take an idea beyond what you originally thought they could use, then you probably do not have an innovation”. This means giving customers (and even your competitors) access to tools to create their own experiences and in the process creating a whole new ecosystem of value creators and value users. The Internet world is littered with examples of companies who have made millions by giving away their product [Google, Linux, Mozilla, Appstore]. Digital commerce works in counter-intuitive ways.

Over the last few decades innovation centers have risen and fallen – Apple went from an innovation hotbed to nothing and then came back as the poster child of innovation with its ipod, appstore and iphone. Downturns like the one in 2001 and 2008 have taught us that ultimately it is survival of the fittest – the companies to survive are those that delivered real products to market, resulting in tangible revenues.

We at Zaak are 100% focused on customer oriented product innovation. Our thinking is that those who design products must first learn to respect those who are going to use the products. If we can think with our user caps on and develop products that best serve user needs we will end up building products that deliver value and thereby generate revenue.

The key takeaways here are:

  • Forget about consumers (those who consume what you provide) and embrace the fact that the Customer is King (you provide what customers want).
  • Indulge your ideas, explore market opportunities and involve real users early on to see their reactions and improvize accordingly.

There you go – a simple recipe for some home (or shall we say garage) brewed new products!

Want to add or subtract to our thoughts just leave a comment.

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