Archive for December, 2006 – Travel portal getting lot of attention online

Well recently running search in blogsphere on cleartrip,yatra and flightraja. Brought me to Never had seen a single advertisement or article in mainstream media before this date.  Decided to check out the site. first of all site took ages to open up. Search was very slow keeping in mind got use to yatra and cleartip experience.  Their site looks to be dependent on abacus GDS for returning fare search results. In the time when all travel portals are moving out  from abacus to galileo it comes as matter of surprise how are they still dependent on them.

Ghumo looks like another offline travel agent trying to get share of online deal.

Verdict : No tension or immediate threat to bigger funded portals

Zamzar – Online File Conversion Utility

I am not a big fan of product technology companies as for some reason not able to relate to their money making capbalities especially dealing in domain like file conversion. But for some reason wanted to do a post on this product. As i have for years faced problem converting basic doc files into pdf documents. As away from office my laptop didnt have a license of Adobe Acrobat. So dependent on those 5$ -10$ conversion utility. It was a big waste of time. Zamzar was something i bumped into when looking to convert a page maker file in HTML.

The utility has lot of extensions available and very useful keeping in mind you dont have licensed edition of all softwares available to carry out conversion. Secondly being online you need not to be dependent on some crappy plugin software installed on PC.

Havent read the tech crunch review of product. Will post more once they come out of beta.

Travel Portals and finding a Deal

Since has started in south delhi travel centre to help people find cheap air tickets. It been a great learning curve for us to understand the dynamics and basics of business. Especially how the support staff is not just dependent on deals aggregated by online portal as an example :

Delhi – Cochin ran a seach on  for 30th Dec

gave me ticket prices costing : INR 12,000 approx (exc tax)
once we understood the routings which is flights are available via bangalore and hyderabad. We looked at construction our own fare by

searching Delhi – Bangalore 14:05 flight reaching bangalore around 16:20

Bangalore – Cochin – 18:05 Flight.

Total cost : INR 10,000 (exc tax)

Now thats approximately 2,000 INR saved per ticket. Now its not necessary to blame the travel portals. As rightly pointed out by tarique from cleartrip over a conversation on using their IBE for India is a point to point market where most of the customers are concetrating on rates comparision on direct flights. Customers are not used to flying via places and hoping flights to save money.  Tarique was right to state that even after doing frequent international traveling for almost 10 years now i preffer to fly single airline and take direct flights even if it cost 5-10K extra. As its the mental peace and time saved. Beside in india airports are not so simple and provide easy accessiability between arrival and departure terminals.Delhi one of the biggest airport in india is an example.

But as my front desk support team adviced they were family of 4 and saving of 8,000 bucx was really worth the extra effort. We did book them on spicejet to bangalore and kingfisher to cochin. Let us get feedback once they have done the leg on return

Jobs in Indian Online Industry

Indian online industry is seeing an exponential growth with finally firms taking medium as source of revenue. But important things which firms are realizing are that Tech Geeks are not the best person to head operations to derieve revenue out of the medium . Though the geeks understand the medium very well its lack of creativity which is required as medium is competiting with television. This is the reason we are seeing influx of adman on traditionally geeks turf. Lot of people from advertising world are joining online ventures ranging from MTV Cyrus joining contest2win to Nikhil Rungta joining .

Now somehow if you evaluate these people are better of as head of creativity, marketing etc at at dotcom. As they bring basics of an offline business to the online industry and their risk taking appetite is better as compared to other hardcore offline industry workers. Possible job openings in online industry (non-programming)

– Sales

– Marketing

Well they may sound as any other normal function of an organization they are very core to an online company. Recently Times Institute owned by Times of India group launched certificate program in the above 2 fields but the best part was opportunity to intern with times internet properties like timesjob, simplymarry etc. Online Industry is bomming and currently sales and marketing positions are being filled by search engine optimization experts (geeks). We need more basis sales and marketing industry to join the sector to spearhead and grow the industry at similar scales as any other offline industry. another Travel agents online foray – Cleartrip,yatra,travelguru should not be worried

We have been talking about offline travel agencies comming online to cash in on all the customers loggin in to make travel reservations online. The idea is to eat into share of travel portals and increasing existing customer base. This sounds a good strategy for business but such portals like are just mere point of pressence for these offline travel agents.

This is 3500$ euro spent on creating a brand name for travel agency. Contentsutra was from where we picked up the story on Joy travel India online foray.  The portal is using Amadeus IBE (Internet Booking Engine). Which allows travel agents to offer online internet reservations using their existing travel setup with Amadeus GDS and BSP. This means system allows IBE to connect to existing discount structure or BSP billing setup for offline agent. Generally based on airlines to airlines an  travel agent earns around 6-7% commission. When they recieve booking through this system they are charged a fixed transaction charge by amadeus but are allowed to create and provide e-ticket then and there itself.

Online travel industries should not get worried of these ventures as they are not going to make a big impact due to lack of national brand name pressence. This sector will see more action with new travel agents signing up for IBE being pushed by Amadeus.

Questions to ask Entreprenuer

Whenever i meet an aspiring technologist/scientist willing to take a plunge into the world of entreprenuership. I though encourage them but with a wind of caution.  The idea is if i can share learning from my mitsakes, i can surely help some individual advance the learning curve rather than just restricting it to threshold level averaging out.

Questions i ask to wanna Entreprenuer

q1) Are you alone in this or you got friends/family read to risk with you in venture ?

Q2) Have you spoken to a potential client?

Q3) Do you wish to forgoe your day job/studies to do this full time ?

Q4) Do you know of competition around?

Q5) Will you be creating something new something which is unique (patentable) ?

Q6) What is your current soci-economic background ?

Q7) Do you know someone close to know who may have taken similar risk ?

Q8) Do you have any particular role model or mentor in mind who can help you with questions you may have ?

Generally based on answers to these questions i am able to determine their risk apetite, their passion for the idea and how serious they are to make it happen. The above is a good excercise for any individual as if you read each question they might not make sense but in the above order they help you draw a picture of yourself and help with a little bit of soul search.

Venture Capital India – Where is the Money for a startup ?

Every morning when i pickup my favourite Economic Times. The idea is to rush ASAP to 4-5 Page where the cover news from IT and emerging technologies sector. Generally the space is taken by info on M & A deals or some big india fund being raised. We all get the picture as an entreprenuer that their is lot of money available in market. But i have been asked so many times via email courtsey people remembering me via different comments i leave on important venture capital blogs.

How do we get funded ?

Now i wish it was so simple that i put it in an email and send it across as a primer for guaranteed success. Though one thing is important one need to give a full attempt before saying “everything about money being available is bullshit!”. See in india we have always been taught on ways to mitigate risk from childhood. Example

1) Taking Science in High School as compared to Arts or Commerce

2) emphasize on doing Masters as soon as one complete bachelors.

3) Finding a job with bluechip organization rather than dirting hards with a startup and so forth.

Even when someone takes a bold step to become entreprenuer still people try to mitigate risk to avoid failure and generally these steps to mitigation generally becomes ones biggest enemy to success. I will give some examples of people around me. Genius minds with great visions but got stick in the vicious cycle of “Avoiding failure instead of chasing success”

# Couple of great progammers decided to write a control panel for remote windows 2000 server management. Better than Plesk etc. From the day they started they were in pressure to go cash flow positive. Now they had all quit their day jobs and were writting the code. The team made some assumptions

– It will take them atleast 8 months to beta

– Another 2 months to get first customer

Based on these assumptions they took out money for 12 months to survive from their savings.Well their assumptions were half correct. They did take almost 8 months to program the control panel but they were not aware of following problems they were to face

– admin issues (paying bills on time etc)

-Rather than starting their operations in plush IT Parks because of higher rental and operation cost. They took up a basment on rent in an quite residential area. Which according to them was near to their homes and also quiet as compared to india’s busy commerical areas. When summers came their UPS could not sustain continous 3 days power cut.  When monsoons came as swerage line behind their office was not clean their office got flooded.

So while always 1 person was busy handling the admin process things got delayed by another 45 days which they didnt mind. Once the software was ready to started reaching out to customers it was already 11 month in running. These people decided with their test servers available and increasing cost to run operations on daily basis. Why dont they start providing shared hosting and web programming services. The begining was great as they were able to sell 1 GB of web space in a month. But the actual return was 1 Lakh rupees. Now 40% of organizational resources was already stuck with managing existing customers and another 40% was busy in acquiring more customers to recover cost of involvment of existing 40 % resources.

Bottom line they were cash flow postive according to their milestones and according to themselves they did a healthy turnover of around 25 Lakh rupees.  3 years down the line they realized even after becoming 75 lakh networth organization.

# Lost the real vision and objective they set out to achieve

# Bigger money they could have made if they would have stuck with their choice for little longer.

Moral of story ” Dont built it if you can’t sell it”

Same goes for venture capital if you have a really good software which can sell 1000 copies every month and has capacity to make you next microsoft. Prove them you can sell. As in so many business plans entreprenuers sit down and tell about the next big software which will be build in india and sold in US. No one talks how it will be sold who will be hired for the market. Has he sold something this size before etc etc. They expect venture capitailist to envision all of this and just throw some money at them to mitigate the risk for creating a project which you thought would be the next big thing.

If you are starting up in india dont target US market. If your product target is US then you should have your startup based in US with management team evenly distributed between india and US . So that india operation is only used as engineering base rather than marketing point. This is advantageous as US based VC would not be interested to invest in management team in india and a VC in india promising access to contacts in US while being based here in india is equally bad.

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December 2006
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