vol iv iss iii

8/8/2019 Vol IV Iss III

1/12

www.ecell.in Vol IV Iss III

Q&A with Ajit Balakrishnan,Founder,

Tte--tte-

with Shaheen

Mistry

Register yourCompany

Blog it, Digg it, Tweet it

Overcoming

the fear o

Failure

Grameen Bank


2/12

Vol IV Iss III

g

Sky is the limit, literally.

While browsing through the Economic Times one day, Istumbled upon this piece which spoke about Jaideep SinhParmar. His ather and grandather used to play or the

Ranji Trophy. A serious thumb injury at the age o 9, how-ever, ruined his chances o ever playing proessionally. Butthe passion or sports still remained. He went on to estab-lish Beyond Boundaries, a sports tourism rm. This rm re-cently organized a cricket match at a height o 11,333 t inthe Bernese Alps in Switzerland. It was a six-a-side matchbetween Indian cricketing legends and an All Stars Team.It was the rst cricket on snow match in history. It was adening moment or Parmar.

This story highlights the simple act that we shouldnt letsetbacks hold us back. In act, every problem brings with

it a new opportunity in disguise. As John F Kennedy veryaptly said, The Chinese use two brush strokes to write theword crisis. One brush stroke stands or danger; the otheror opportunity. In a crisis, be aware o the danger - butrecognize the opportunity. The shortest path might have aroadblock, but there will always be a longer path that willtake you to your destination. The key is to remain ocusedand ollow your passion!

In this issue, we talk o things like how to get a companyregistered, how to cut down on marketing costs by usingsocial media networks, stu which budding entrepreneursmight nd useul. The interview with Shaheen Mistry is

an attempt to gain an insight into the world o social en-terprise and the experience that one gains by being a parto such a venture. By talking to Ajit Balakrishnan, we havetried to construct a picture o what the IT and e commercescene in India is right now, and how it is going to changeover the years.

This is just a sneak peek into what the issue has in store.Read it to nd out more. Hope you like it!

Ritika GoyalEditor

From The

Editors Desk

Editorial

1


3/12

Vol IV Iss III

2

www.ecell.in/blog

Asocial enterprise is a prot-making business set up to tacklea social or environmental need.

Many commercial businesses wouldconsider themselves to have socialobjectives, but social enterprises aredistinctive because their social or envi-ronmental purpose is central to whatthey do. One such organisation is theGrameen Bank which was awarded theNobel Peace Prize in 2006 or its eortsto create economic and social develop-ment rom below.

The Grameen Bank is a micronanceorganization and community develop-ment bank started in Bangladesh thatmakes small loans (known as micro-credit or grameencredit) to the impov-erished without requiring collateral.The system o this bank is based on theidea that the poor have skills that areunder-utilized. A group-based creditapproach is applied which utilizesthe peer-pressure within the group toensure the borrowers ollow throughand use caution in conducting theirnancial aairs with strict discipline,ensuring repayment eventually andallowing the borrowers to develop goodcredit standing.

The bank also accepts deposits, providesother services, and runs several devel-opment-oriented businesses includingabric, telephone and energy compa-nies. At GB, credit is a cost eectiveweapon to ght poverty and it servesas a catalyst in the overall developmento socio-economic conditions o the

poor who have been kept outside thebanking orbit on the ground that theyare poor and hence not bankable.

Grameen Bank Project was born in thevillage o Jobra, Bangladesh, in 1976.

As o July, 2009, it has 7.93 millionborrowers, 97 percent o whom are

women. With 2,558 branches, GBprovides services in84,573 villages.It is owned by the poor borrowers o thebank who are mostly women. It worksexclusively or them. Borrowers o

Grameen Bank at present own 95 percent o the total equity o the bank.Remaining 5 per cent is owned by thegovernment.

How is Grameen Bank different?

Grameen Bank methodology is almostthe reverse o the conventional bankingmethodology. Conventional banking isbased on the principle that the moreyou have, the more you can get. In otherwords, i you have little or nothing, youget nothing. As a result, more than halthe population o the world is deprivedo the nancial services o the conven-tional banks. Conventional banking isbased on collateral, Grameen system iscollateral- ree. GB does not require any

collateral against its micro-loans. Sincethe bank does not wish to take anyborrower to the court o law in case onon-repayment, it does not require theborrowers to sign any legal instrument.

Impact of the loansTotal amount o loan disbursedby GB, since inception, is

Tk 465.29 billion (US$ 8.26billion). Out o this, Tk 414.27 billion(US$ 7.34 billion) has been repaid.Current amount o outstanding loans

stands at TK 51.02 billion (US$ 738.84

million). During the past 12 months (rom

August08 to July09) GB disbursed

Tk. 72.98 billion (US$ 1060.42million). Monthly average loandisbursement over the past 12 months

was Tk 6.08 billion (US$ 88.37million). Projected disbursement oryear 2009 is Tk 75.00 billion (US$ 1091

million), i.e. monthly disbursement o

Tk 6.25 billion (US$ 90.92 million). Endo the year outstanding loan is projected

to be at Tk. 55.00 billion (US$800 million).

Revenues, Expenditure & Dividends

Total revenue generated by Grameen

Bank in 2008 was Tk 12.00 billion(US$ 174.61 million). Totalexpenditure was Tk 10.69 billion(US$ 155.62 million). Interestpayment on deposits o Tk 5.46

billion (US$ 79.41 million) wasthe largest component o expenditure(51 per cent). Expenditure on salary,allowances, and pension benetsamounted to Tk 2.96 billion (US$ 43.00

million), which was the second largest

component o the total expenditure

(28 per cent). GB made a prot o Tk1305.00 million (US$ 18.99million) in 2008. Ever since GrameenBank came into being, it has madeprots every year except in 1983, 1991,and 1992. GB has declared 30% cashdividend or the year 2008. This is thehighest cash dividend declared by anybank in Bangladesh in 2008. The bankhas also created a Dividend EqualizationFund to ensure distribution o dividends

without much fuctuation in successiveyears. Receiving o dividends each yeargreatly inspires shareholders, 96% owhom are borrowers.

Helping the Beggars (Bottom of

pyramid)Begging is the last resort or survivalor a poor person. Among the beggarsthere are disabled, blind, and retardedpeople, as well as old people withill health. GB has taken up a specialprogramme, called Struggling MembersProgramme, to reach out to the beggars.

About111,645 beggarshave already joined the programme. Total amount

disbursed stands at Tk. 136.56million. O that amount, Tk. 102.26million has already been paid o.

Basic eatures o the programme are:Existing rules o GB do not applyto beggar members; they makeup their own rules.All loans are interest-ree. Loanscan be or very long term, to makerepayment installments very

small. For example, or a loan tobuy a quilt or a mosquito-net, or

an umbrella, many borrowers are

paying Tk 2.00 (3.4 centsUS) per week.Beggar members are coveredunder lie insurance & loaninsurance programmes withoutpaying any cost.Groups and centers are encour-aged to become patrons o thebeggar members.

Continued on Page 4

G rameen BankNo Collateral, No Legal Instrument, No Group-Guarantee or Joint Liability

Case Study


4/12

S

ocial media is the new buzzwordor most modern marketing strat-

egies and with a reason. I you arestarting up a new company that primarilygoes rom business to consumer, withouta big budget in marketing or PR, yourbest chance or getting your messageacross will be via social media. There isno other low-cost promotional methodout there that will easily give you largenumbers o visitors, some o whommay come back to your website againand again. I you are selling products/services or just publishing content orad revenue, social media marketing is apotent method that will make your site

protable over time. Most start-ups ormajor corporations which adopt socialmedia tools to market and engage theircustomers in Southeast Asia, are essen-tially in the IT, ast moving consumergoods (FMCG - or example, mobilephones, computers and gadgets) oronline media space.

In act those who ignore the ecacy osocial media usually all into three cate-gories; the ones who dont know muchor anything about social media, the oneswho are interested but dont know how

to use it and those who dont believe inthe value that a social media strategycan bring to any site or business. In caseyou belong to any o these, please readon:

In this era o social media, you get tochoose rom a host o options avail-able. However as the number o socialnetworks grows (more startups) andshrinks (economic downsizing), wemust be smarter about which ones wejoin and which ones we ignore. These

social networks can be broadly classi-ed into 5 categories. I am listing a ewmust-haves rom each category:

Blogs - Blogger/Wordpress

The rst thing to do is to start a corpo-rate blog to talk about your product/service. There are many reasons whyyou should have a corporate blog butyou must always remember the mainobjective. The essential rule is not topromote your product too much, ratherocus on the people within the company,or you or your teams thoughts about the

industry in general. I sooner or later,your blog becomes popular amongstthose who are in the industry, then it

will add to your credibility a lot.It gives a lot o word-o-mouth

publicity too.

Social Networks - Facebook/Linkedin/

Ning

I you are unable to build a platormto get a community, make use o thepower o social networks to spread yourmessage. I you want to have a smallsocial network or specic purposes,create a simple one via Ning. I you wantto share via social bookmarking tools,create a Facebook group to organizeyour customers, or better, create aFacebook Page to illustrate the prole oyour company, engage your customers,share links on content and also do socialadvertising within Facebook. The sameprinciple can be applied to Linkedin.

Micro-Blogging - Twitter/Plurk

The streaming o inormation aboutthe latest product rom your start-upcan be acilitated in real time throughthe help o micro-blogging, text-basedmessages with a maximum o 140 char-acters. Twitter is the new Facebook.Its currently the most popular way ospreading inormation. However, do notalways send out tweets that concern thecompany. One advice given by social

media experts is that you stem yourthoughts as a specialist o the industryand at times, provide tweets regardingthe industry as a whole.

Rich Media Content Sharing - Flickr/

YouTube

Sometimes, i you want to providescreenshots or do a video documenta-tion o your product or service, a goodway is to use the distribution channelsvia rich media content sharing sites. Asa start-up, since you have relatively lowamount o unds it may be a good idea

to make use o the bandwidth o Flickrand YouTube and then utilize the powero social networking tools to shareacross platorms through your riends,amily and ans.

Aggregators - Digg

I the ounders within your company get

a eature in a notable blog, an imme-diate strategy is to submit it to Digg. Iyou want to popularize one o your blogposts, audio podcasts or video with theassistance o viral marketing, the beststrategy is to use Digg or other aggre-gators that will broadcast your messagequickly. The key o using an aggregatoris that you have an interesting story totell. The best way to work with this isto keep trying dierent ways to sendout ideas about the products/services oyour company.

The only essential principle oradopting social media is the strategicobjective i.e. why are you using thesesocial media tools or your start-up? Itcan vary rom company to company. Iyou are not sure which one to use, donot tap into them until you gure outexactly what you want to do with them.By joining a social network, you aresetting conversational expectations.People will expect you to have a decentlevel o participation on each one. Iyou ail to update your proles or buildcontent or network with other users,

then its a waste or you. So each toolshould be specically tapped to ocuson one specic objective, or example :

Just a word o caution, managing yoursocial network proles will becomeincreasingly tedious, unless you takethe proper steps to only join ones thatwill urther your personal brand.

Thus, you can eectively reach out toyour target customers, leave a good rstimpression, build a brand, all at little orno cost with the help o social media. Allyou need is creativity, an imaginationand yes, the mundane but extremelyimportant virtue: regularity!

Compiled by Sahil Patwa, 3rd year student,

Mechanical Engineering Department.

Vol IV Iss III

,

g

Tips & Tricks

3

log it,


5/12

Vol IV Iss III

ww

w.ecell.in/blog

4

Continued from Page 2

Objective o the programme is to providenancial services to the beggars to helpthem nd a dignied livelihood, sendtheir children to school and graduateinto becoming regular Grameen Bankmembers.

The man behind Professor Muhammad

Yunus

In 1976, Muhammad Yunus, a Proessorat University o Chittagong, launched aresearch project to examine the possi-bility o designing a credit deliverysystem to provide banking servicestargeted to the rural poor. In October1983, the Grameen Bank Project wastransormed into an independent bankby government legislation. The orga-nization and its ounder, MuhammadYunus, were jointly awarded the Nobel

Peace Prize in 2006; the organizationsLow-cost Housing Programme won aWorld Habitat Award in 1998.

Proessor Muhammad Yunus, theounder o Grameen Bank reasonedthat i nancial resources can be madeavailable to the poor people on termsand conditions that are appropriateand reasonable, these millions ofsmall people with their millions of small

pursuits can add up to create the biggest

development wonder.

Compiled by Gaurav Parashar, 4th

yearstudent, Computer Science & Engineering

Department.

You essentially gave up a comortablelie in the US to run a school or Indianchildren living in the shantytowns here.What motivated you to do this?I dont really consider what I am doingas giving up anything. I was 18 whenI walked into a slum in Mumbai and itwas then, that my story o growing intoa social entrepreneur began. I had a

strong realization o how important itwas to have a more equitable world.There are so many setbacks aced bysocially and economically deprivedclasses here in India. And the work I dois certainly not any orm o sacrice.The skills you develop, the experienceyou gain, the opportunities you get aretoo big an incentive!

How would you dene social entrepre-neurship or the youth?It is a orm o entrepreneurship withtotally dierent results. Social entre-

preneurs see positive social impact astheir prot. To dene, a social entre-preneur is someone who recognizes asocial problem and uses entrepreneurialprinciples to create a venture to makesocial change. Whereas a conventionalentrepreneur typically measures peror-mance in prot and return, a socialentrepreneur assesses success in termso the impact s/he has on society as wellas in prot and return. Social entrepre-neurs in the 21st century, will redeneentrepreneurship as we know it, due totheir progressive business models.

In todays world, when the youth is mostlydriven towards making huge monetarygains and leading luxurious lives, howdo you think theyd be attracted towardssocial entrepreneurship?Now, social work and things o thissort are very, very personal. The driveor such endeavors has to come romwithin onesel. One o the reasons thatyouth today are turning towards socialentrepreneurship is because they arentreally satised with what lies givingthem in terms o only monetary/materi-alistic prots. They want to make theirmark in the world & change the onetheyre living in or the good.

Agreed, that it is a tradeo when youtalk in terms o the money you get andall, but then, while pursuing socialentrepreneurship, the skills that youdevelop, even the hardships that youace and the risks that you take, go along way in building your overall entre-preneurial personality. Essentially, theexposure that you get through such

endeavors is a wonderul incentive orthe young.

What are the qualities/resources thatare required to undertake such sociallymotivated ventures?Well, the two most essential things are:a lucid, undeterred vision and a planor achieving the same. The ormer iswhat would drive you throughout yourjourney. By plan, I mean, the overview ohow the aim can be achieved, the nitty-gritties can be dealt with and xed intime, but the general ramework has to

be properly in place.

Ater getting done with this, a numbero problems would crop up, just likein any other entrepreneurial venture.What is required in this case, however, isa much higher emphasis on the visionthan on the resources. Generally theproblem is, enthusiasts get blurredin their actual motive by engrossingthemselves too much into the hassleso getting resources! The ootnote is,resources would keep coming i youstick to your ideals and work as best

as you can towards your goal. Seeingyour enthusiasm, resources in any ormwould gravitate towards you. So basi-cally, yes, there will be challenges, butsurmountable ones, or sure!

Teach or India & Akanksha areast revolutionizing the youth outlooktowards socially active ventures.Comment.Both o these organizations work tobring about educational equity. Wetake in the best & brightest minds inIndia who have a vision and the zealto change the educational structure.We take in the youth, because wehold the belie that to bring about thischange that were aiming at, we needminds with strong idealisms, energy &o course bright ideas! They have the

Shaheen Mistry is the CEO o Teach For India and the ounder o theAkanksha oundation. Both organizations are dedicated towards providingquality education or children living in slums. She was on campus recently

or the Ideaz launch. Tanushree talked to her at length about social entre-preneurship and how dierent it actually is rom conventional entrepreneur-ship. Excerpts rom the talk:

Q&A with Shaheen Mistry

will & desire and we provide them acompatible platorm!

As discussed with Tanushree Prasad, 2nd year

student, Chemical Engineering Department.

Teach for India is now accepting appli-

cations for recruitment into the team.

The last date for submission of applica-

tions : 11th October, 2009. For further

details, visit: www.teachforindia.org

Perspective


6/12

In Conversation with

AJIT BALAKRISHNAN

Vol IV Iss III

You have experienced both the worlds - the old economy (while at the agencyRediusion) and the new economy (Redi.com). When do you think the Internetwill become an integral part o the media and marketing plan o companies?Internet media today is only 2% to 10% o media spend while it is 10%-40% oreach across countries This kind o lag o Spend to Reach is normal in the evolu-tion o a new medium and we have seen it historically when TV and Radiocame about. This gap is usually bridged in a decade or so.

In 1976, I had thought o making a TV commercial. We told one o ourclients that there is a new medium called TV and we would like to create a

30-second commercial. There was no notion o a commercial then. Peopleran static slides on TV screens and in cinema. But TV in India took oeight years later, ater 1982. The Asian Games proved to be the trigger.Four years later satellite TV was allowed in. From then TV never lookedback. What I am saying is every medium develops like that. The same willhappen with the net.

In the Indian internet space a ew players are taking away a dispropor-tionate share o the revenue. When do you think this will change andwhen will revenue convert into prot or the players in the net space?Winners-take-most is normal for ad revenue.

In act, i you look at any category in India, the No 1 and No 2 take adisproportionate share o the revenue. For example, in the daily news-

paper market in Delhi, the Hindustan Times was the dominant player.Now they get only 80 per cent o the prots, because they are splitting itwith Times o India. Normally, the No 1 player will always take the bulk othe share; the No 2 will take 25 per cent, and the third player will typicallyhover around breakeven. The others are destined to lose.

As or converting revenue into prot in the net space, the answer is to builda supporting subscription revenue by delivering a really useul service.

Today there are hundreds o newspapers and magazines in our country.But a large number o them are loss-making propositions. Do you thinkemergence o online media like Redi is a key actor in this?Those newspapers that are vanity businesses, that is, those ownerswho run them or returns such as promoting a cause, social prestige inthe community and so on will keep going even i there are losses. The oneswhich are real businesses have a decision to make. I personally hope they will allsurvive and prosper because newspapers are key social actors.

You came up with a No ads on the homepage policy in your latest revamp.Why was it done and how did it aect Redis revenue?Our thinking is be good to users and more users will come and the monetizationwill take care o itsel. Thus, we did away with ads on the homepage.

Revenue coming rom online companies shrunk by hal but ofine advertiserscontinued to grow and we believe this trend would continue.

What are the actors that have hindered the growth o e-commerce in India?E-commerce in India is held back by poor broadband and credit card penetra-

tion. Government has to act with policy initiatives to x this.

Continued on Page 8

Ajit Balakrishnan is the

founder, Chairman and

Managing Director of Rediff.

com. He is also a director of

Rediffusion Dentsu Young

& Rubicam Private Limited,

one of Indias largest ad

agencies. Mr. Balakrishnan is

also Chairman of the Board of

Governors of IIMC.

g

We talked to him on topics ranging rom Redif.com, to uture o e-commerce in India, tochanging media strategies. Excerpts rom the telephonic interview:

Interview

5


7/12

Vol IV Iss III

ww

w.ecell.in/blog

6

Lets Make it

You have a good idea, you have

got your team, you have a soundplan with everything workedout to the last detail, you are ready totake the biz world by storm! Ok, butbeore you do anything else, you needto register your company, Heres how

The Ministry o Corporate Aairs(MCA), through the Administration othe Companies Act, 1956 sets downrules and regulations or the registra-tion o a company:

Steps for Registering a Company in

IndiaThe approval o the name by the Regis-trar o Companies (ROC) in the State/Union Territory in which the companywill maintain its registered oce,sohuld be obtained. There should not bean existing company by the same name.Further, the last words in the name arerequired to be Private Ltd. in the caseo a Private Company and Limited inthe case o a Public Company.

Once a name is approved, it is valid or aperiod o six months, within which time

Memorandum o Association (MoA) andArticles o Association together withmiscellaneous documents are requiredto be led.

The MoA is designed to commu-nicate to the public the state oaairs o the company and itspurpose o being and operating.This aids various stakeholders othe company (creditors, suppliers,shareholders, etc.) to evaluatethe extent o their risk and alsopossibilities o the company toovercome them at a uture date.The Articles o Association oa company typically cover theissuing o shares (also calledstock), the dierent voting anddividend rights attached todierent classes o share, restric-tions on the transer o shares,the rules o board meetings andshareholder meetings, and othersimilar issues.

The ROC will give the certicate oincorporation ater the required docu-

ments are presented along with therequired registration ee, (AnnexureA) which is scaled according to theshare capital o the company, whichwill be stated in its Memorandum oAssociation.

Minimum number o Directors and

shareholders:For incorporating a Private1.Limited Company a minimum otwo directors are required andminimum two shareholders.For incorporating a Public2.Limited Company a minimum othree directors are required andminimum seven subscribers.

A private company can commencebusiness on receipt o its certicateo incorporation. The CompaniesAct species the inormation to be

contained in the prospectus which hasto be led with the ROC beore it canbe issued to the public. The ROC issuesa certicate o incorporation which is alegal document relating to the orma-tion o a company or corporation. Acerticate o incorporation by the ROCis conclusive evidence o the ormationo a company.

How do you start a small business and

patent your name?

Patent isnt the right word. A patentprotects a new invention or a new way

o doing something. The actual processor registering names is called eithera trademark or a service mark. I youhave a product to sell, youll need atrademark. I you are a provider osome kind o service, then youll needa service mark.

Choose the name youd like to trade-mark. Make your name memorable andeasy to remember, and easy to spell, butnot a common word.

You can do a preliminary search yoursel

to determine i your name is alreadyin use, by doing a Google search orsimilar names and i youre planning oncreating a website associated with thisname, search the Who Is database oregistered domain names.

Finding a trademark attorney is thenext step. An excellent resource is tocontact your state bar association. Theycan provide a wealth o inormation.

Determine your class o service next.

There are 45 classes o service, whichdetermine where the trademark alls.For example, class 14 reers to jewel-lery; class 18 reers to leather goods...

Set up alerts on Google ater your trade-mark is registered, or your name andany similar names or products, to keeptabs on competition and any possibletrademark inringement.

Ater registration o the company themost important thing comes up in theorm o PAN and TAN which are asollows:

Permanent Account Number (PAN)

The PAN is a ten-digit alphanumericnumber, issued in the orm o a lami-nated card, by an Assessing Ocer o

the Income Tax Department.

It is mandatory to quote PAN on returno income, all correspondence withany income tax authority and challansor any payments due to Income TaxDepartment. All existing taxpayers orpersons who are required to urnisha return o income, even on behal oothers, must obtain PAN. Some suchpersons are Individuals, Companies,Partnership Firms, HUFs, Trusts orRepresentative assesses.

Can you have more than one PAN?Obtaining or possessing more than onePAN is against the law.

Getting the new PAN card

Application or PAN should be madein prescribed orm (Form 49A) andsubmitted in any o the I-T PAN ServiceCentres set up and managed by TheUnit Trust o India Investor ServicesLimited (UTI-ISL ).

Tax Deduction Account Number (TAN)TAN is a unique 10 digit alphanumeric

code allotted by the Income Tax Depart-ment to all those persons who areresponsible or collecting/deducting taxat the source o income. It is mandatoryto quote TAN on all TDS (Tax Deduc-tion at Source) returns (including e-TDSreturn) or any TDS payment challan.

In order to get TAN, you are requiredto submit an application orm, which isavailable at any o the Tax InormationNetwork Facilitation Centres (TIN-FCs)managed by the National SecuritiesDepository Ltd (NSDL).

Compiled by Abhinav Agrawal, 2nd year stu-dent, Electrical Engineering Dept, LarunikaGaur, 2nd year student, Chemical Engi-

neering Dept and Swati Agrawal,

2nd year student, Aeronautical

Engineering Dept.

Technicality


8/12

Vol IV Iss III

g

Entrepreneurship@CampusEureka! 2009 ,the fagship Business Plan competi-tion o The Entrepreneurship Cell, IIT Bombay, kickedo on the 1st o Sept. A high prole panel discussionon Indias next wave of Young Entrepreneurs markedthe launch o Eureka!. The panelists had a discussionabout Indias entrepreneurship scenario in the comingyears and the role o students and the youth in it.

Eureka!, now in its 11th edition, is the largest B-PlanCompetition in Asia as ar as participation and prizemoney is concerned. The competition sees partici-pants rom dierent strata like IITs, B-schools, othertechnological institutes, medical schools and evenworking proessionals rom various companies andwitnesses a number o international entries as well.

Eureka! through the years has become the preerredpath or budding entrepreneurs who are in search oa launch pad into the corporate world. It lives up to itstagline Road to enterprise because although it is acompetition, it is actually a journey with a successulbusiness venture as the destination. It has a uniqueMentoring Process, which helps the participants maketheir business plans oolproo. The winners o Eureka!are provided with opportunities or venture capitalunding and incubation in addition to the prizes.

For the rst time ever, Eureka! is going to conductworkshops in major cities, across India. The work-shops are being conducted to help the participantsrene their business plans and to help them to presentdierent aspects o a B-plan in a coherent summarywhich is required or participating in Eureka!

In the past years, entries rom IITs have done verywell in the competition. Last year an IIT Bombay teamsecured 3rd place in the competition.

To participate in Eureka!, log on to www.eureka.

ecell.in and just ll a orm with the summary o your

B-Plan. Entry submissions are open till 9th October2009.

The Entrepreneurship Cell, IIT Bombay launched the initiativeThe Entrepreneurship Garage in collaboration with SJMSOMand SINE. The vision behind the initiative is to bring those peoplewho are motivated and enthusiastic about starting up, rom allover the institute on a common platorm. This will promote qualitydiscussions among like minded people who have an inclinationtowards entrepreneurship. The activities o the initiative takeplace through two modes, rst the Garage meet-ups whereinpeople come and discuss on a pre-decided agenda, with otherentrepreneurs and corporate persons, specially invited or thesame cause. The second mode is the online mode which supportsthe sessions and gives the members an opportunity to interactwith each other, brainstorm and decide the agenda o the nextmeeting. The people whom we are targeting are managementstudents, entrepreneurs, tech enthusiasts and research students.

I you would like to be a part o The Entrepreneurship Garage,

eel ree to contact us at [email protected]

Ideaz, the pan-IIT Business Idea Challenge, organized byThe Entrepreneurship Cell, IIT Bombay is the search or Themost innovative IITian. Ideaz, in its th year since inception,has ast become a rage among aspiring student entrepreneurs.With close to 400 teams registering or Ideaz rom 11 IITs, Ideazthis year too, has seen massive response rom the students.

Ideaz, is a two stage process which helps budding entrepreneursprogress rom an Idea to the Business Plan. The result o the rststage has been recently declared with 10 teams shortlisted orstage 2. The teams would be given intensive mentoring beorethe grand nale, to be held on 10th October.

Shortlisted teams include our teams rom IIT Bombay out owhich two are UG teams.Anish Nahar, team leader o one o theshortlisted UG team rom IIT Bombay says 3rd or 4th year is anideal time for students to put their technical expertise to use by

thinking of a tech business idea, and practical knowledge gained

through labs and projects helps. Anish is a 3rd year student othe Electrical Engineering Department.

Ideaz, is not only a competition, it also provides a strong supportsystem or the aspiring student entrepreneurs. For this reason, Ideazhad a series o workshops across India at several IITs. Also, or therst time, online mentoring was given to all participants in Stage-1.

According to Saurabh Agarwal, director o Kennis ConsultancyPvt. Ltd., online mentoring partner o Ideaz, The online interac-tion with the teams was a good experience. Some o the teamsshowed great promise and with round two o the mentoring wereally saw a drastic improvement in the ideas. The rm has alsoshown an interest in unding two o the ideas.

Highlights

6 Workshops in our IITs across India10 teams shortlisted among400+ teams3 teams in top 10 rom IITB6 UG teams in top 10

Highlights & Incentives

Total Prize money worth Rs. 21 lakhsAngel unding and incubationopportunitiesOpportunity to represent India atthe Intel-UC Berkeley InnovationChallenge, Caliornia, USA. Theteams will be ully sponsored byIntel.Advanced mentoring or the nalistteams.More than 38 Successul start-ups in the past 10 years through

Eureka!More than 2000 participants lastyear

Campus Buzz

7


9/12

Vol IV Iss III

www.ecell.in/blog

Continued from Page 5

Growth o e commerce is hindered bythe high prices o Internet connections,that is, dial-up and broadband.

The other issue is the payment system.The number o Indians possessingcredit cards is very low. O the 10million net users, only 20 per cent havecredit cards. About 70 per cent o the10 million users in India are in the age

group o 17-30. Whereas, in the UnitedStates, the average age o the personon the net is 40 years. Problem is creditcard companies here do not give creditcards to young people in India.

I believe that e-commerce is one o thegreat promises that hasnt showed upyet and has a long way to go in India.

What has been the impact o the USmeltdown on Redi? How are youcoping with the current recessionarybusiness climate?

The business we are in goes throughtechtonic change every ve years or soand true to pattern we are in the middleo one right now. The current changeis characterized by a move rom PC toMobile (mode o access), rom text tovideo (orm o presentation), rom adsto subscription (revenue), rom passivemedia consumption to active ( usergenerated media) and rom personalto social. And all this is going on whilethere is a recession. But I think theseare the challenges that make or aninteresting lie, dont you think?

As told to Ritika Goyal, 3rd year student,Electrical Engineering Department.

8

Beore April 1, 2009, i you had to use

the ATM o any bank with whom youdont have any banking relationship,you ended up paying ees. It meant youhad to nd the closest ATM belonging toyour bank to withdraw cash and makebalance enquiries. So RBI introduced adirective to the banks to allow ree useo ATM machines irrespective o whichbank a customer had accounts with.It was indeed an innovative decisiontaken by the RBI.

This has opened up a sea o opportuni-ties or companies which can tie up with

smaller banks to take care o the banksATM operations. It is a win-win situa-tion or both parties as this also allowsthe bank to cut costs without compro-mising on expansion plans.

The cost or setting up an ATM variesrom place to place. With an approxi-mate xed cost o Rs 6 lakhs, and add tothat, recurring costs o manpower, cashmanagement and security, outsourcingATM operations saves a lot o preciouscapital. This will allow smaller and alsooreign banks with a weak network to

concentrate capital on services such asbranch expansion, a actor more impor-tant in their case to compete with estab-lished banking giants.

Dhanalakshmi Bank has signed therst ever end to end outsourcingdeal, with AGS Wincor Nixdor .WincorNixdor is a German Corporation thatprovides retail and retail bankinghardware, sotware and services.Thebank has saved approximately 10% oits capital (Rs 40 crore). With this deal,Dhanalakshmi Bank plans to open 380ATMs in the next our months to add toits 72 existing ones. Another importantaspect o this deal is that the bank wontpay above a certain threshold o trans-actions, thereore more the number ocardholders using their ATMs, less willbe the average cost per transaction.

A great opportunity or banks to cutcosts, but this is an even bigger oppor-tunity or investors to exploit this rela-tively unheard o concept o ATMoutsourcing in its inancy and create

an industry out o it in a market whichis just resurging and many companieslooking to cut costs.

How does this third party system work?

In an agreement between banks andthird party companies, banks onlyhave to select the ATM site and paythe company or each transaction. Thelatter will pay or building and main-taining the ATMs.

The services associated with operatingan ATM are deployment, cash replen-ishment, maintenance, monitoring andarmored car support. The third partycompanies, in turn, charge banks eithera monthly ee or a ee per transaction;this ee wont be charged above certain

number o transactions. Besides owningthe site and the ATM, they can also signdeals with other banks and establishinterconnectivity with them, therebyincreasing their prots and reducingtheir cost.

The bank provides its brand name to theATM site, which makes marketing it agreat way to make money, or the thirdparty company, in addition to what thebank is already paying. There is a loto promise in advertising opportunitiesand partnerships with retail and enter-

tainment establishments. Making theoutlet a movie ticket vending machineis an idea, among many, that has beenused in the past.

The India Switch Company, an inde-pendent payment systems provider,is seeking to tap into this outsourcingopportunity by establishing 1,500 ATMsover the next three years or the recentlyormed CashTree ATM networkingsharing alliance o ve public sectorbanks -- Bank o India, Union Bank oIndia, Indian Bank, United Bank o Indiaand Syndicate Bank. It plans to issuecustomers with ATM-cum-debit cards.To popularize the network, it will oercustomers in addition to other services,lie insurance o Rs 50,000.

In North America and Europe, ATMoutsourcing is airly common amongbanks with most banks contractingthird party companies. Their operationsare not only limited to cash dispensingbut they are increasingly nding oppor-tunities in the retail and telecommuni-

cations sector. They provide other valueadded services to customers such asinsurance, internet, as well as servicesin partnership with other companies.

utsourcing ATMs is inSBI has decided to outsource 500 ATMs

as a pilot project adding to its hugenetwork o 14,000 ATMs. ICICI, SBIsprivate sector rival is also planningto outsource its ATMs, as it probablycannot match the ormer with its currentnumber o limited branches.

Looking at these developments, one cansay that this service holds great promisein India. There is a lot o money to bemade, but only time will tell whether thisidea can pull o the same success in Indiaas it has in the past in other countries.

Compiled by Shrayank Gupta, 2nd year stu-

dent, Chemical Engineering Department

Trendspotting


10/12

g

Q I started a new hub on DC++ a ew monthsago with my hostel wingies. I t s calledAC/DC. I t has been nearly six months sincewe started the hub but no one has joined ityet! Where did we go wrong? Please help.-HubSnub 101

Dear HS101,The network eect model best explains the cause or yourdilemma.

Network effects

The phenomenon whereby a device becomes more valuableas more people use it, thereby encouraging ever-increasing

numbers o adapters.

The value o a hub is determined by its hub user base. In yourcase, your hub has very ew users currently and in turn, veryew uploaded les. As a consequence, the users have verylimited choice o les or download. The hubs that are morepopular like Boom and White Meadow have a large userbase and hence a greater number o uploaded les which at-tracts potential users. In a nutshell

Critical mass

Network eects become signicant ater a certain subscrip-tion percentage has been achieved, called the critical mass.As the value o the good is determined by the user base, thisimplies that ater a certain number o people have subscribedto the service, additional people will subscribe to the servicedue to positive utility: price ratio.

How to attract users prior to reaching critical mass?

One way is to rely on extrinsic motivation, such as a paymentor an incentive or a request or riends to sign up. Try to pub-licise your hub through Jeemail status messages and othersuch means.

Remember what a amous item girl once said- No publicityis bad publicity.

P.S.-The name o your hub could also have something to dowith your problem.

Compiled by Gouri Nawathe, 2nd year student, Electrical Engineering

Department and Mukund Madhav, 2nd year student, Physics Depart-

ment

Q I m a 1st year student o GG department. Myproblem is regarding the CS 101 course. I havea very awesome textbook, which nobody else does.But my roomie attends all the lectures, which nobodyelse does. I I take his notes, I m sure I can crackthe Endsems. But then I l l have to give him my text-book. What i I give him my textbook and he doesntgive me his notes? What do you think I should do?-Ram Gopal

Dear RG,What you ace right now, is known in economic circles as thePrisoners Dilemma. It is a very amous problem in game the-ory, which is phrased thus:

Two suspects are arrested by the police. The police

have insufficient evidence for a conviction, and, having

separated both prisoners, visit each of them to offer the

same deal. If one testifies for the prosecution (against the

other) and the other remains silent (cooperates with the

other), the betrayer goes free and the silent accomplice

receives the full 10-year sentence. If both remain silent,

both prisoners are sentenced to only six months in jail for

a minor charge. If each betrays the other, each receives a

five-year sentence. Each prisoner must choose to betray

the other or to remain silent. Each one is assured that the

other would not know about the betrayal before the end

of the investigation. How should the prisoners act?

The easy way out or both is to remain silent, which in yoursituation, amounts to sharing your resources to ace the examtogether. But there is always a question mark over the ac-tions o the other guy. I you want to look out only or yourown interests, it would perhaps be better or you not to shareyour book. I you look at the truth table below, youll see thator any o Prisoner Bs actions, Prisoner A is always better obetraying rather than remaining silent.

Prisoner B StaysSilent

Prisoner B Betrays

Prisoner A StaysSilent

Each serves 6months

Prisoner A goes reePrisoner B: 10 years

Prisoner A BetraysPrisoner A: 10 yearsPrisoner B goes ree

Each serves 5 years

In the market, this situation is seen when manuacturers donot price their goods as high as they might have, because oear o being undercut by their rivals. In the case that bothprice their goods high enough, both stand to make greaterprot. But i one decides to play it dirty, and prices his prod-uct cheaper, he may take away all o his rivals customers.This ear o betrayal is what keeps both rom maximisingtheir gain. In most cases youll nd both the prisoners be-traying each other. Both secretly hope that the other remainssilent, so that he can go scot ree. And so each betrays.

As ar as your problem is concerned, I guess it would be besti you both nd it in you to trust the other enough. But i you

have the slightest doubt, Id advise you to keep your cardsto yoursel. As Muhammad Ali said He who is not

courageous enough to take risks will accomplishnothing in lie.

Vol IV Iss III

Know It All

9

AGONY ENT

to the rescue!


11/12

Vol IV Iss III

ww

w.ecell.in/blog

The Tagline ContestSuggest a suitable tagline or theseshoes with an inbuilt music player!

Submit your answers to enspace@

ecell.in beore the 20th o October.The most catchy tagline will win aprize!

The winner o the previoustagline contest is Srikar Kanuri.Congratulations! Mail us [email protected] to collect your prize.

FeedbackAll suggestions/comments/eedbackregarding this issue o ENspace arewelcome! Also i there is somethinguseul about any aspect o entrepre-neurship that you would like to sharewith us and the other readers, please

mail us at [email protected]

General InformationFor more on entrepreneurship, log on to

www.ecell.in/blog

Also, we are thinking o introducing acolumn or CLASSIFIEDS rom thenext issue. So, i you are looking or ateam member or your start up, pleasemail us at [email protected] with the

details.

Editorial TeamEditor - Ritika Goyal

Layout - Mustaa Saiee

Execution PanelAbhinav Agrawal, Arpit Agrawal,Gaurav Parashar, Gouri Nawathe, IshanSrivastava, Larunika Gaur, MukundMadhav, Nidhi Shanbag, Raj Doshi,

Sahil Patwa, Shrayank Gupta, SmeetBhatt, Swati Agrawal, Tanushree Prasad

Lighter Side

In January 2009, in the midst o ragingnancial crisis and a deep globalrecession, I hosted an online entre-

preneurship orum or laid-o engineerswho were considering a switch to entre-preneurship. About 145 questions weresubmitted, rom which, we synthesizedsome o the most commonly asked.Among those was one that I would liketo answer here: How do you overcomethe ear o ailure?

When I was younger, I had an enormousear o ailure. I was quite used towinning, and was very bad at losing.Since then, while Ive been successulin many ways, Ive also ailed at variousattempts. My attempt at building aproduct company out o India in 1997succeeded somewhat, but the companydid not become a revolutionary brando the order that I aspired or, nor didit achieve any signicant scale. Some-where along the way though, I devel-oped the wisdom to take things in stride,embrace ailure, learn rom it, and riseabove it.

When I look back on my journey totrace the development o that wisdom,I see one over-riding theme. Very earlyin lie, I developed a personal philos-ophy. An unlikely juxtaposition o ideas

culled rom various systems o thought rom the Upanishads and Vedanta,rom Hindu scriptures, Ayn Rands AtlasShrugged and The Fountainhead, andcertain Buddhist ideas o Nothingness.

The Hindu system o thought has apowerul core concept: Tat Tvam Asi,I Am He. Instead o worshipping anexternal God, the Hindus believethat God is inside. A powerul way othinking, since i the ultimate perectionlies inside you, and all you need to do isrealize your own potential, then much o

your undamental sel-doubt vanishes. Atleast at an existential level, the individualis complete within.

Ayn Rand oers a similarly individual-istic perspective, although rom a radi-cally dierent point o view. Randsheroes and heroines move mountains.Although reared in a Communist andCollectivist Russian background, Randcelebrates individual achievement, andbelieves in one mans ability to make adierence. Many entrepreneurs I knowhave been infuenced by Rands writings,and have drawn inspiration especiallyrom the character o Hank Rearden inAtlas Shrugged, who ghts on againstall odds with tremendous resilience.Similar sel-condence echoes in TheFountainheads architect hero, HowardRoark, whose resilience and personalintegrity propels him toward a vision o

architecture condemned by his contem-poraries or its bold originality andthreatening innovation.

Yes, conviction and aith are incrediblyimportant components o a sustainablepersonal philosophy, but where does itcome rom? How do you develop it?

This is a question you must ask yoursel.I can oer pointers on what to study,but how your own psyche will respondto the stimulus I cannot tell. This is aspiritual, experiential journey, and you

have to go it alone.

I will, however, share three morecomponents rom my own bag owisdom: laughter, compassion, andNothingness. When the individualisticideology overwhelms, when your headswells with sel-aggrandizement, thinko yoursel in respect to the Himalayas.Or the Pacic Ocean. Or the Universe.

We are nothing. We are insignicant.We are a single speck o dust in thecontinuum o time.

So why be araid o ailure?

Overcoming the

ofSramana Mitra is a technology entrepreneur and strategy consultantin Silicon Valley. She has ounded three companies, writes a weeklycolumn or Forbes and the business blog Sramana Mitra on Strategy.

By Sramana Mitra

10


12/12

The ollowing is an excerpt rom a presentation by Lars-Henrik Friis Molin (LHFM) in Stock-holm on 13th August, 09. LHFM is a Swedish serial entrepreneur and venture capitalist

having 25 portolio companies.

Compiled by Harsh Shah, 4th year student, MEMS Department

14 Street Smart Advice forEntrepreneurs

1. AlwAysbe Client FoCusedto CreAte HigHer bArriersto entryMost companies start thinking about this only in their growing stage. It is most important to sustain clients whenstarting up. Having said that, this is one thing that remains constant no matter which stage your company is in.

2. tHink diFFerentYou will ace erce competition rom rms who oer similar solutions. The key is to not do dierent things, but todo things dierently. Innovate in your process to cut costs and improve quality.

3. dontbe AFrAidSince you are a start-up, even i you goo up, in most cases the person you are pitching your idea to, is not goingto remember you. On the other hand, i you do a very good job, he is going to remember you, which is good.

4. stArt selling sooneror lAterSelling is not only a revenue generating activity, it is the most important product/service development exercise.

5.be FrugAl, keepyour Costs downTry and implement strategies that do not increase your costs. I you can tie up with someone else or oce spaceor i you can make do with working out o your own home, it is a great advantage when you start-up. Not tomention the act that you mitigate a lot o nancial risk in the process.

6. only Hire top tAlentHire for attitude, and train for skillWhen in doubt, dont hireInitially everyone eels that the best o the best wouldnt want to join a start-up. While it is true, you can look outor people with potential, whose talent is as yet unrecognized. As has been said by investors the world over, Themost important thing we look or in a venture is a team, everything else comes secondary.

7. ensure Vision, MissionAnd VAluesRevisit your aims and goals as a start-up and compare them with your game plans and missions. Clearly ormulatethe goal and the path ahead.

8. piggybACkFor CredibilityThe only thing that is lacking in a start-up is credibility. Once a company gains that, everything else alls intoplace. Initially, dont be hesitant to piggyback on others or credibility. It is worth more than you think.

9. AlwAysbe FAstAnd eFFiCientI you could do it in 10 months, there are always Chinese, Japanese and Indians who can do it in 7 months. Keeppace with your clients need. Push your limits, move out o your comort zone.

10. lookAttHe dynAMiCs First, struCture lAterThings should be rolling and gaining momentum. But have a clear view o nancials, key perormance indicators,processes, training and leadership.

11. interACtwitH prospeCtsAnd ClientsBeore taking the next step, ask clients i they want you to take the next step.....ask prospects i they value the nextstep. Always keep your clients in the loop, make them eel as though they are an integral part o your decisionmaking process.

12. keep MArketing up, but MArketing Costs downYou can use the Internet and its wide outreach to directly target your customer base through blogs, socialnetworking sites etc.

13. FundingOpt or unding that is strategically most optimal or your type o start up. Sometimes you might be in a situation

where you dont need unding at all or its is readily available by raising debt, but i Sequoia or Blackstone areready to give you some, take it because with them they bring along associations and sister companies which canbe invaluable to your business.

14.wHen exiting, CHoosetHe rigHt FinAnCiAl pArtnerYou dont want your baby to be raised by a terrorist, even i he pays you a lot.

W

hileStartingUp

While

Growing

WhileEnhancing

vol iv iss iii

Documents