When those meant to be executives become startup founders, everyone loses
There’s this great visual most people have of being an entrepreneur or a founder. It’s a poster of a young college dropout, next to the logo of a billion-dollar company they founded, surrounded by famous people and, of course, money. Lots of money. It seems, all of a sudden, everyone wants to be on that poster. And everyone believes the only way to be on that poster is by being the founder of a company. In fact, even the government seems to desperately want everyone in the country to be on that poster. Heaven forbid, if you are not a founder, then suddenly there is no poster and you have lost out in the startup revolution. This perception is so far from reality that it’s dangerous. Mark Suster described entrepreneurship well: “Being an entrepreneur is sexy… for those who haven’t done it.” A founder is one member of a team. Just like every other member, they have certain responsibilities. And to manage those responsibilities, they need certain attributes. Everyone doesn’t have those attributes. And, thank god, everyone doesn’t have them if everyone became an entrepreneur, we would have a series of failed companies because there would be no one to actually run them. So what does an entrepreneur need? Let us pen down a few things to look for in founders. They have extreme confidence in themselves and their ideas; no fear of failure; an inherent ability to take risks over and over again; an ability to constantly manage stress; are good decision-makers the best entrepreneurs never sit on the fence; work all the time, even when not working which means they’re sacrificing something else in their lives; are perpetual optimists who can take rejection over and over again. Having these attributes are not good or bad. And they definitely aren’t linked to success or failure as a human being. In fact, very few people have these attributes. When people who are meant to be executives in a company become founders, everyone loses. One of the most dangerous results of investing in the wrong founders is that it has an effect on the larger ecosystem. Oh and, by the way, executives are in short supply. Ask any founder running a company today. There is always a need for more people. Meanwhile, there seems to be a plethora of qualified founders in India. I’ve met many, and invested in a few. But given the dearth of high-quality talent, I suspect most of those founders will suffer. And the more the ecosystem blindly motivates the wrong kinds of individuals to start their own companies, the more everyone loses. Wes Hopkins Jersey
Shop owners make sales pitch from footpaths
Once the hub of shopping in the city, MG Road in Pune Camp has fallen off the map in the last few years. So much so that some apparel store owners inside shopping complexes have taken to selling their wares on pavements with temporary stalls to keep their businesses alive. “I was shopping from hawkers who sell their wares from those huge cardboard boxes that they keep on movable tables. What struck me was that they said that they accept debit and credit cards, which obviously is not what many street hawkers do. As it turned out, one of them accompanied us to a store inside a shopping complex, which is the actual store of that hawker, where they have an elaborate display arrangement and card payment terminals, but there were no shoppers there,” Vimannagar resident Rashmi S, a self-confessed MG Road faithful said. Shop owners and lessees are worried about the decline of the area’s prominence. “Ten years ago, people used to visit our store in large numbers, even though it is located inside a shopping complex. But when two malls came up at both ends of the Cantonment (SGS Mall and Kumar Pacific Mall), young people have moved to them. They are gleaming and shining complexes with food courts and amusement. Who will come to these rundown and tiny shopping complexes?” said Yusuf Ansari, an apparel store owner in a complex on MG Road. Yusuf is not off-the-mark. Many apparel and accessories stores are organised inside two or three-storeyed shopping complexes, most of which were built in the 80s. Years have gone by, but neither shop-owners nor the shopping complex managers have done much to refurbish and glam up these buildings. Exposed internal wiring, grimy shop-windows, lack of clean restrooms, and general uncleanliness is a common sight in the complexes. Besides, entertainment options are too far and few between, say regulars here, except for a few cafes. “The clothes and other apparel here are affordable and trendy, and so I regularly come here to shop with my friends. But we don’t want to go inside the shopping complexes. It’s too empty inside, sometimes it stinks, and frankly, they are very boring. There is very little to do apart from shopping,” said Isha S, an MG Road regular. Such complaints are common with many other shoppers as well, and that has brought shop owners onto the pavements. They sell despite raids and threats of eviction by the police and Pune Cantonment Board (PCB). Hawking is illegal in the entirety of the Pune Cantonment area, but the ban is loosely enforced. “Sometimes, Cantonment officers and police constables come with large trucks for eviction. For that period, we have to go back into our shops with our temporary arrangements. After they leave, we come back to sell on the pavement, said a shop owner near the Aurora Towers, not wishing to be named. The local traders’ body admitted that such practices are rampant, but defended the traders, saying that “compulsions are many”. “The simple fact one learns in such business is that one can earn more and faster by peddling on the streets than by owning a store. The hawking problem is rampant in Cantonment areas. They have long eaten into our business by placing their stalls near our shops, so that customers shop from them and not from us. If PCB had a strong policy against illegal hawkers, shop owners would not have had to sell on the streets themselves,” Anand Kochhar, chairman of Pune Camp Merchants’ Association (PCMA), said. Kochhar also laid the blame on malls in and around the area, and also on e-commerce platforms, which he says has “hit traders the hardest”. “These malls around the area are shiny and glamorous, and have hurt our business over the past few years considerably as people would prefer to go there. But the worst blow has come from e-commerce platforms. They have competitive pricing, lots of choices, and policies like easy returns. Our traders obviously cannot offer so many facilities,” he adds. There have been efforts- if all too little- to revive the area as a prime shopping destination. There has been talk of introducing 4G Wi-Fi on the MG Road, sprucing up buildings lining the stretch, and last December, the PCMA organised a shopping festival in the Christmas and New Year week. The festival included attractive discounts from the more than thousand participating stores, decorative lighting, free parking, and play areas for children. Traders did experience some success, but as Kochhar implies, the image of glamour need not equate good business necessarily. “Colourful lights can be very easily put up and such shopping festivals can be done. But it is very difficult for business owners here to make a profit. The taxes are crippling, the footfall is decreasing, and there is the hawker menace. So people will be forced into desperate measures like hawking on the streets,” he said. Malcolm Jenkins Jersey
Paytm & Alibaba to help Indian sellers source 5-million products from China at cheaper rates
Ecommerce platform Paytm said it is leveraging its association with Alibaba group to enable Indian sellers to source products from China at cheaper rates as well as help them with logistics and payments. The company said it has identified about 25-30 Indian merchants with a credible track record to incubate under categories including home and kitchen, micro innovation including USB cookers, etc, fashion and mobile accessories and western fashion to begin the pilot. The programme plans to get on board at least 10,000 merchants by the end of this year, giving them access to more than 5-million products from China. “Inventory is the third pillar of commerce, after logistics and payments, which requires optimisation in India,” said Bhushan Patil, who is heading the initiative for Paytm. Paytm clarified that the company’s focus remains on scaling its B2C commerce business and this move is more in-line to help sellers source effectively and get better margins. Sellers who source using Paytm ties are allowed to sell on other marketplaces as well including Flipkart, Snapdeal, Amazon, ShopClues, according to Patil, who was the head of Alibaba Group Holding’s wholesale international business before he joined Paytm three months back. “We expect the Indian SME’s cost to come down three times with our direct connect,” said Patil. “Most SMEs don’t import directly, they import from local distributors, and there may be 2-3 steps shuffling, we connect directly. We also offer bonded warehousing facilities, leveraging our tie-ups with import houses and trusted payments with our partnership with Citibank, which further reduces costs at scale.” The sourcing business will see Paytm’s existing lending programme help these sellers in gaining extra capital to buy additional inventory to meet the anticipated demand. “Sellers can buy in bulk from China at cheap prices, get goods to India and store in our bonded warehouses until products need to be sold. That way the seller pays duties, which are close to 30%, at the time of sale and not in bulk,” Patil explained. While the programme helps Indian sellers on Paytm offer new products on the B2C marketplace at competitive pricing, Patil added that Alibaba might look at backing the model with its expertise if the pilot turns successful. “IndiaMART is focused on domestic B2B, serving buyers and sellers in India. Alibaba & Paytm are working on helping Indian buyers connect with suppliers from China and buy from them. Both of us are serving different segments of the market” says Brijesh Agarwal, cofounder of IndiaMART, which claims to own 70% of the market share in the online B2B commerce space. Mike Pennel Jersey
Indian e-commerce cart hits a plateau
Behind numerous headlines of a cash crunch hitting major Indian e-commerce companies, and their valuations being questioned, is a revelation not too many people are talking about. Indian e-commerce was emblematic of frenetic growth until very recently, but the last six to eight months have seen the industry come to a grinding halt, making it an inflection point for all the players involved. TOI accessed and analysed data for top e-tailers, which revealed that the online retail market stagnated between May 2015 and 2016 in terms of the value of goods sold. While in May last year, the e-commerce biggies clocked a gross merchandise value, or GMV, run rate of $9 billion, that number has only inched up to about $10 billion at the end of May this year, translating into an 11% annual growth. In December last year, the total GMV run rate had reached $10.5 billion on the back of the festive season, which typically sees a rush of discounting from all e-tailers. GMV is overall sales on an online marketplace, excluding discounts and returns which are an integral part of the e-commerce market. The data gleaned from primary research and vetted by multiple stakeholders in the industry indicated that Flipkart, the country’s largest online retail player, has seen its GMV run rate stall at about $4 billion for almost a year, while an aggressive Amazon has gone from clocking $1 billion to $2.7 billion in gross sales. However, Amazon’s operations in India only began three years ago and it’s been gaining ground on a smaller base. What’s worth noting is that Flipkart notched up a 400% growth the year before, when it’s GMV zoomed from $1 billion to $4 billion, post which the numbers have gone flat. Gurgaon-based Snapdeal, on the other hand, has seen an almost 50% knock-down in sales numbers after similar highs it touched exactly a year ago. The company said as of June, its GMV run rate was more than $2.5 billion. An email sent to Flipkart’s spokesperson did not elicit a response till the time of going to press. In an earlier interaction with TOI, Amit Agarwal, Amazon’s India head, had said the online retailer hadn’t witnessed any signs of a slowdown and, instead, had grown shipments impressively at 150% in the first quarter of the calendar year. E-commerce companies earn anywhere between 5% and 15% in commission from sellers, which makes up their revenue. GMV had been the key metric for all e-tailers in India to show rapid growth and ratchet up their valuations in multi-billion-dollar fund-raises over the past two years. But with sales staying flat or declining, most e-commerce players are now starting to focus on returning customers, which their founders keep stressing in media interactions. GMV run rate varied from month to month and is pretty jagged, depending on promotions and discounts that are available at the time. But the data collated by TOI points to a palpable slowdown for the first time after a heady period of growth. Reduced Discounting Slowing Growth? Post March this year, most e-tailers have reduced promotional campaigns after the Indian government introduced new policy guidelines for online marketplaces. The fresh rules prohibit online retailers from offering discounts directly. Cash burn for Amazon, for instance, had risen up to almost $80-90 million per month in the early part of the year – more than double of Flipkart’s – but has since stabilized, people privy to the matter said. Amazon’s Agarwal, when asked about it recently, did not give details on the mounting cash burn involved in weaning away Indian consumers from rivals. An investor who has been tracking e-commerce says if the market has momentarily stopped growing, it’s because online players have reduced investments into market development. A slug of risk capital came into India’s online commerce industry, with Flipkart leading the pack. Founded in 2007 as an online bookstore, the Bengaluru-based poster boy of India’s thriving startup ecosystem scooped up $3.2 billion, a majority of the funding coming over the past two years, while Snapdeal collected $1.3 billion. The Jeff Bezos-led Amazon, too, has been pumping billions into India, the latest being a $3-billion investment announcement – taking its overall commitment for the country to $5 billion in three years of launching here. Has Online Consumer Base Capped Out? India’s online shopping market, according to rough estimates, is 60-70 million, and is expected to go up to 100 million in the next few years. A notable spike happened in the past three years, but the divide between tier I and tier II cities is still very wide. The top 6-8 cities contribute 90% of sales for all the consumer internet players, including app-based cab aggregators like Ola and Uber. In an earlier interaction with TOI, Binny Bansal, co-founder & CEO, Flipkart, said the e-commerce major was keenly looking at ways to tap into its existing base of users. “There are 50-60 million consumers buying online today. Given the large base, it makes sense to ensure you are selling more to the same customers as that opportunity is big enough compared to three years back,” he had said. Snapdeal’s co-founder & CEO Kunal Bahl, too, has reiterated his focus on the e-tailer’s high-value consumers, suggesting GMV was not the metric his company was chasing anymore. “Our GMV run rate continues to be healthy and above $2.5 billion. We are significantly focused on delivering the best experience, growing our net revenue which has increased three times in the last 12 months,” a Snapdeal spokesperson said in an emailed response to TOI. GMV was described by many as a vanity metric during the past few years when e-commerce registered exponential growth. “The moment of reckoning is coming or may have come already for Indian e-commerce companies. The ease with which these companies have been able to raise money from VCs may have made them all sloppy, and the test then will be which ones can now work on the ‘building-a-business’ channel. As for whether
Govt to expand airstrip at Rangeilunda
Odisha government has decided to expand the airstrip at Rangeilunda at an estimated cost of Rs.44 crore to facilitate landing of 40 to 70 seated turboprop aircraft. The existing airstrip with a 900-m runway is on 40 acre of land. Another 40 acres of land, including 30 acre of private land is required to upgrade it to 1,874-m runway, officials said today. A high-level official team led by special secretary in the general administration department, AK Meena visited the airstrip on Friday. “The works department has prepared a detail project report (DPR) at Rs.44 crore, including Rs.14 crore for land acquisition. The project report was submitted to the government,” said Executive Engineer, Works department, Berhampur, PK Das. “We have asked the Ganjam district administration to start the land acquisition process soon,” said Meena. The state government will provide funds for land acquisition to the district administration. A culvert will be built on the nearby canal and the Berhampur-Gopalpur road diverted slightly. Eddie Vanderdoes Jersey
Cong. against diversion of Eluru Canal for airport expansion
The Congress is against the shifting (diversion) of Eluru Canal by 13.5 km to facilitate expansion of the Gannavaram airport. APCC vice-president and former Minister Devineni Rajasekhar said that the State government, which came to power predominantly on the votes of farmers, was giving little respect to their problems. He said that the Airports Authority of India initially suggested that it was enough to shift the Eluru Canal by 6 km, but the Telugu Desam government had come up with a second plan under which the Eluru Canal would be shifted by 13.5 km from it current location. Mr. Rajasekhar said while in the first plan the government needed to acquire only 195 acres, in the second plan it required 425 acres. Marcus Peters Jersey
Regional connectivity scheme: Govt plans to levy departures on trunk routes
The government plans to impose a levy of Rs 7,000-8,000 per domestic departure flight on all trunk routes to subsidise airfare on operations to unconnected cities, Minister for Civil Aviation Ashok Gajapathi Raju said. This levy is estimated to generate Rs 500 crore annually to be used to fund the Regional Connectivity Scheme (RCS), under which airlines will offer services at an all inclusive airfare not exceeding Rs 2,500 for a one-hour flight. “I think as of now it (levy) will come close to Rs 500 crore annually and we have four regions — North, South, East, West — to begin with,” Raju said, adding that the levy could be Rs 7,000-8000 per departure flight. While clearing the National Civil Aviation Policy 2016 earlier this month, the Union Cabinet announced the Regional Connectivity Scheme as the ‘centerpiece’ of its policy, aiming to raise the sale of domestic tickets to 30 crore in five years from 8 crore in 2015. Besides the levy, the subsidised fare of Rs 2,500 will be funded through exemption to airlines from a host of charges, sharply lower services tax on tickets and reduced value added tax (VAT) on aviation turbine fuel. The government changed its earlier plan to levy a 2 per cent cess on each ticket to fund the RCS. Raju said the ministry thought a levy per departure flight may result in airlines absorbing some of the charge and not passing it on to the customer entirely. The government plans to start the RCS from second quarter of 2016-17. Troy Stecher Authentic Jersey
‘Allow private players to train air traffic control officers’: Civil Aviation Ministry
Allowing private players to set up training facilities for air traffic control officers will help in addressing manpower shortage in air traffic management activities, says a report. Air Navigation Services (ANS) comes under state-owned Airports Authority of India (AAI) and for quite sometime there has been a shortage of air traffic controllers. A report prepared by industry body Assocham and consultancy KPMG has said the number of Air Traffic Control Officers (ATCOs) grew to 2,600 last year but there is a shortage of around 1,500 such people. Noting that staff crunch is a cause for concern, the report suggested enhancing capacity at existing ATCO training facilities and also permit private entities to carry out training activities. The Civil Aviation Ministry may consider the option of allowing private players to set up ATCO training facilities, subject to adequate supervision by the Airports Authority of India (AAI), it said. “This may be started in a Public Private Partnership (PPP) mode first and thereafter be made fully open to private sector in the long run,” the report said, adding partnership with international ATC training institutes should also be explored. Currently, there are ATC training facilities at the Civil Aviation Training College, Allahabad and at the Hyderabad airport. Karl Mecklenburg Womens Jersey
Government allows airlines to import up to 18 year old planes
Domestic airlines can now import aircraft that are up to 18 years old into the country with the government amending more than two-decade rules in this regard. The move is expected to provide a fillip for the government’s ambitious efforts to boost regional air connectivity as it gives more leeway for operators in expanding their fleet. Till now, aircraft that are more than 15 years old were not allowed to be imported. As part of larger efforts to improve the ease of doing business in the domestic aviation sector, which has huge growth potential, the Directorate General of Civil Aviation (DGCA) has made changes to rules that had come into effect way back in July 1993. With the revised norms, pressurised aircraft that are not over 18 years old or those which have not completed 50 per cent of design economic pressurisation cycle can be imported. Marqise Lee Jersey
RIL knew about KG-D6 and ONGC block connectivity in 2003, suggests regulatory filings by Niko Resources
Reliance Industries knew way back in 2003 that its Dhirubhai gas fields in Bay of Bengal block KG-D6 will drain out natural gas from adjacent block of ONGC, regulatory filings by its partner Niko Resources indicate. Canada’s Niko had on April 6, 2004 filed with Toronto Stock Exchange an “Appraisal Report as of March 31, 2003 on Block KG-DWN-98/3 (KG-D6)” natural gas reserves it had commissioned from DeGolyer and MacNaughton (M&M). In the report, D&M stated: “Development of the KG-DWN- 98/3 block will be capable of depleting the OFIP (Original Gas In-Place) on the KG-OS-IG block.” KG-OS-IG block lies adjacent to KG-D6 and belongs to state-owned Oil and Natural Gas Corp (ONGC) which had taken RIL to Delhi High Court in May 2014 alleging its gas had been produced by the private firm. Under court directions, RIL and ONGC appointed D&M to study if the gas fields in their blocks are inter-connected. The US-based consultant in its final report submitted in December 2015 stated that as much as 11.122 billion cubic meters of ONGC gas has migrated to Dhirubhai-1 and 3 (D1 & D3) field located in the KG-DWN-98/3 (KG-D6) Block of RIL. The government thereafter appointed a one-man committee under A P Shah to decide on compensation to be paid to ONGC. The panel is to submit its report by next month end. Niko, which holds 10 per cent stake in KG-D6 block, had in 2003 commissioned D&M report to understand viability of the gas discoveries made in the KG-D6 block in 2002. “The OGIP and associated reserves that are located off the KG-DWN-98/3 block have been included as possible reserves attributable to development of the KG-DWN-98/3 block,” D&M had said in the 2003 report. “The reserves associated with that portion of the OGIP would require a separate stand-alone development by the owner of the block (KG-OS-IG) which could prove cost prohibitive.” When contacted, RIL said, “We have already made our detailed submission to the Shah Committee regarding the filing made by Niko. It would be inappropriate to comment on the submission itself in deference to Justice Shah’s instructions to the parties to maintain strict confidentiality.” Sources said while ONGC in its submissions to the Shah panel has pointed to the Niko filing to buttress its case, RIL told the panel that comments made in the Appraisal Report “suggest that there was a possibility of connectivity, but only that and is not firm evidence of it.” According to RIL, it was not until D&M undertook its detailed 14-month study and analysis (at a cost of over USD 2 million) and furnished the 2015 Report that reservoir connectivity was indicated. It further stated that the Appraisal Report was in public domain since 2003 and ONGC “could have raised with RIL or (upstream regulator) DGH any issues that it felt required attention or discussion, that than 10 years later, as it did.” To the AP Shah Committee, RIL cited the D&M’s comments that independent development of resources in ONGC’s block would be ‘cost prohibitive’ to state that they were “not commercially viable” on a standalone basis. This implied that to produce them, they had to be necessary produced with neighbouring fields. RIL in its submission stated that the 2003 appraisal report provided “very little from a technical perspective and nothing that is helpful in any joint development consideration” of the adjacent blocks. “The Appraisal Report comprised of a simplistic consideration of seismic data and very limited well data confined to discover wells in Block KG-DWN-98/3, with no modelling but rather with a reliance on D&M’s general experience in geology,” it said. It went on to state that seismic data may suggest continuity of channels across block boundaries, but is entirely insufficient in conclusively establishing presence of reservoir and reservoir connectivity. “Well data from the ONGC blocks was only available to RIL in late 2013 and post-production pressure values from ONGC blocks were obtained by ONGC in the early 2015 through MDT survey in three of their wells,” it said. The 2003 Appraisal Report, RIL said, “relates to wells A1, B1, B2, and C1 of D1-D3 reservoir; it does not give consideration to wells A5, A9, A13 or B8 i.e., the wells which ONGC (wrongfully) claim have caused the alleged drainage and which it made specific complaint of in its Writ Petition (in the Delhi High) that lead to the Terms of Reference (of the AP Shah Committee).” The company went on to add that it at all times confined its Petroleum Operations to its Contract Area and its exploration and development activities were approved by the Management Committee headed by DGH. Seth DeValve Authentic Jersey