Notes from NASSCOM 2009

I spent Friday at NASSCOM’s (India association of technology companies) annual conference in Mumbai. Like always, it was a vibrant event where entrepreneurs, students, bureaucrats (I was amazed to see teams from around the world), politicians and thought leaders came together (http://indialeadershipforum.nasscom.in). It was fun to meet so many old friends and the evening’s entertainment, which celebrated Mumbai’s indomitable spirit, struck a chord. I had tears in my eyes as I saw a video montage of the attacks. And proud as I saw how the city responded, and back in high spirits as the dance performance began. Below are a few observations.

The overall mood is best described at cautiously optimistic. The recession, the Mumbai attacks, and the Satyam scandal were on everyone’s mind. At the same time, several companies I spoke to saw this as an opportunity to take market share and drive further off-shoring. Most were also optimistic about the Indian and Chinese economies and the opportunities they presented (especially for the Indian software services industry which has largely focused on developed markets).
CK Prahalad (wiki – C.K. Prahalad) presented extracts from his new book, The Age of Innovation, and laid out some implications for technology companies. Key takeaways were:
CK emphasized that volatility (of markets, policies, etc.) was here to stay and companies need to adjust to that new reality through a combination of strategic clarity and nimble execution. He argued that clarity of direction was critical at a time where companies needed to make hard choices, and that agility would be a key competitive advantage in a volatile environment
CK also shared his new mantra, “N=1 and R=G” (New-Age-Innovation/first pages). N=1 is the notion that firms need to focus on individual customer experiences even when they serve millions of customers while R=G is the idea that firms need to build an ecosystem of global resources that they influence but do not control. He went onto argue that technology companies have a unique role to play in enabling such a transformation by providing the IT infrastructure, unique analytics and facilitating flexible business processes.
One of the most interesting start-ups I came across at NASSCOM had nothing to do with technology. Jerry Rao (wiki/Jerry_Rao) who founded Emphasis (which he merged with BFL and then sold the combined entity to EDS) is starting a for profit low cost housing company. Jerry’s aspiration is to build 1 M homes that he can sell for $ 10,000-20,000 each in the top 5 cities in India and do so while making healthy profits. What intrigued me was Jerry’s consumer centric and disruptive approach. He talked about how most Indian developers view land as an appreciating asset and therefore are not incented to quickly complete construction – their business model assumes that prices will continue to rise and that construction delays are actually beneficial. On the other hand, Jerry plans to treat land as inventory with a singular focus on getting rid of it as soon as possible. In addition, through focus groups (what an idea!), Jerry had also identified the key buying criteria for his customers and was putting in place the infrastructure to deliver those – 15 years fixed rate loans (currently impossible for this target segment to access), access to an English medium school and basic amenities (sewage, water, enough electricity for a light and a fan), security, etc. Best of luck, Jerry!

I share CK’s optimism. Technology has the potential to lead a new global growth wave. If there is one thing that this downturn has proven, it is that sustainable value cannot be created by financial engineering. Instead, firms need to build innovative products and services that consumers will feel compelled to buy and to do so, they will need technology more than ever before.

About Ashu

General Partner with Foundation Capital. Areas of interest range from digital media, mobile and internet infrastructure to all things related to India. Currently on the board of TreeHouse, Aspire, Conviva, Agni and TubeMogul.
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One Response to Notes from NASSCOM 2009

  1. Margot says:

    Binnen het kringloopkompas mis ik een bldiroeeong van de bodemlevenkwaliteit en biodiversiteit van bodemleven. Het zou kunnen dat dit beter hoort bij biodiversiteit, maar daar lijkt het alleen te gaan over biodiversiteit boven de grond en niet in de grond. Dat biodiversiteit in de grond belangrijk is mag blijken uit het volgende: Als niet omgezette drijfmest wordt geinjecteerd onstaan anaerobe verrottingshaarden in de grond. Het huidige onderzoek naar bodemleven maakt geen onderscheid naar type bacterie of schimmel en laat derhalve geen verandering zien in aantallen bacterien of schimmels. Maar het maakt nogal wat uit of je een bacterie hebt die melkzuur maakt of een die de lijkengiften putrescine en kadaverine produceert of een schimmel die vitamines produceert of fosfaat vrijmaakt ten opzichte van een schimmel die mitotoxinen produceert. Juist onder anaerobe omstandigheden krijg je zulke negatieve ontwikkelingen van het bodemleven. In een bodem met een rijk bodemleven, een bodem met een grote diversiteit aan bodemleven, wat voornamelijk aeroob werkt , krijg je omstandigheden die ik omschrijf als vallend onder een andere wet, namelijk de wet van de toenemende meeropbrengsten. Op ons bedrijf zie je dan dat een negatieve fosfaat balans dan geen probleem meer is. Wij hebben een fosfaat benutting van meer dan 150% en toch neemt het PAL getal in onze grond toe en wel met 7,5 punten in 4 jaar tijd. Dit kan alleen als het bodemleven goed functioneerd. Het zou goed zijn als hier parameters voor worden ontwikkeld en als dit meegenomen wordt in het kringloopkompas.

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