Case studyWhy great product design is

about smart solutions, not good

looksPage 37

Warready?What entrepreneurs must know about cyber security in IndiaPage 32

Tough Love: a Lost

Leadership art?

Page 16

ALerTSecuriTy

The Magazine for Growing Companies

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A 9.9 Media Publication | inc.com Facebook.com/Inc @incMARCH 2014 | `150 | Volume 05 | Issue 02

JASon Fried Marketing without Marketing Page 18

hoW to CashCan these entrepreneurs

build businesses from garbage?Page 22

in on trashWaste Watch

Cap lede here Text tk dummy Modigna facinit lore molorer incipisit adit lorero et, conse duis am

ContentsMarch 2014 Contents

This ediTion of inc. Magazine is published under license from Mansueto Ventures LLc, new York, new York. editorial items appearing on pages 6,13-18, 42-43 were all originally published in the United states edition of inc. magazine and are the copyright property of Mansueto Ventures, LLc, which reserves all rights. copyright © 2009 and 2010 Mansueto Ventures, LLc. The following are trademarks of Mansueto Ventures, LLc: inc., inc. 500.

on the coverAlok Mittal (left), founder, A2Z Group and Dr P. Parthasarathy, founder, E-ParisaaraPhotograph by Subhojit Paul and Sri Vatsa. Cover design by Anil VK. Cover imaging by Peterson PJ.

32War Ready? If you aren’t, our cyber security report is must reading. The time to armour up against cyber attacks is now!by aman shukla

22Memoirs of Garbage With India generating 1,10,000 tonnes of garbage, the business opportunity in waste management is huge. Inc. India takes a look at the companies that are digging waste for wealth. by sonal khetarpal

44the Way I Work Brothers Ruchir and Anuj Bang have built roomsXML, their travel accomodation portal, into a company with nearly ̀ 150-crore in sales. Their success combo is equal parts of brotherly rapport and vigilant discipline. as told to shreyasi singh

Hiring Regime roomsXML’s Ruchir and anuj Bang never hire from the travel industry. it’s a baggage they can do without, the brothers say.

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March 2014Contents

08 Editor’s Letter

10 Behind the scenesA look at the companies that made Comic Con an epic success

13 Launch Innovation guru Vivek

Wadhwa sets out to find—Where are the women innovators?

Why eating right is important to be a good leader

The lost leadership art of tough love

stRateGy37 DesIGn Good design is good business. how some design tweaks can drastically change a product’s business result

40 soCIaL MeDIa Why Facebook’s new tool, Trends is not so trendy

42 LeaDeRsHIpTake our quiz and find out your leadership style. you might get the wake up call that you need.

18 Get Real By Jason Fried Lavishing love on current customers is more important than spending money to snag new ones. Another lesson well learnt.

20 InnovationThe remote control for the future is this coin-sized Bluetooth device

48 Founders Forum Why being his own boss is the best thing that has happened to Tapas Sarkar, founder of Mecgale Pneumatics

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1. Place of publication Nine Dot Nine Mediaworx (P) Ltd. A-262, Defence Colony, New Delhi-110 024

2. Periodicity of its publication Monthly

3. Printer’s name Anuradha Das Mathur Nationality Indian (a) Whether a citizen of India? Yes (b) If a foreigner, the country of origin N/A Address C-144 Sarvodya Enclave, New Delhi-110017

4. Publisher’s name Anuradha Das Mathur Nationality Indian (a) Whether a citizen of India? Yes (b) If a foreigner, the country of origin N/A Address C-144 Sarvodya Enclave, New Delhi-110017

5. Editor’s name Anuradha Das Mathur Nationality Indian (a) Whether a citizen of India? Yes (b) If a foreigner, the country of origin N/A Address C-144 Sarvodya Enclave, New Delhi-110017

6. Names and addresses of individuals who own the newspaper and partners or shareholders holding more than one per cent of the total capital

Pramath Raj Sinha N-154, Panchsheel park, New Delhi 110024

Vikas Gupta C-5/10 Safdarjung development Area, New Delhi-110016

Asheesh Kumar Gupta 103, Tower II, The Palms, South City-1, Gurgaon 122001

Anuradha Das Mathur C-144 Sarvodya Enclave, New Delhi-110017

Kanak Ranjan Ghosh BH-44, Sector-II, Salt lake City, Kolkata 700091

Hellion Venture Partners India II, LLCLes Cascades Building, Edith Cavell street, Port Louis, Mauritius

TVS Shriram Growth Fund IJE JayaLakshmi Estate #29, Haddows Road, Nungambakkam, Chennai 600006

And others.

I, Anuradha Das Mathur, here by declare that the particulars given above are true to best of my knowledge.

Form IVStatement of ownership and other particulars about the publication INC. as per Rule 8.

Dated: 1st March, 2014Sd/-

Signature of Publisher

INC.Com/lead

Three Signs That You’re a Martyr, Not a LeaderAre you most comfortable when you’re feeling overwhelmed? You may be what Inc. columnist Les McKeown calls a martyr-leader. Here are three telltale signs.

1. You’re a bottleneck...and you secretly like itmartyr-leaders have unfulfillable commitments, impossibly herculean to-do lists, and triple-booked schedules—all for the purpose of generating the warm, comforting glow of indispensability.

2. Your default mood is self-pityWatch a martyr-leader as they go about their daily business and you’ll find two primary attitudes on display: poor me and head-shaking sigh.

3. You exude learned helplessnessmartyr-leaders live in the self-taught state of mind whereby nothing is ever truly fixable and everything is a mess—and expect the rest of us to feel the same.

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We speak to Richie Chauhan, CEO and President of Tekege

Solutions, Ergo Agency, Aavaz and BuzzBeat app, Chief

Technology O�cer for Wedding Guru and innovator of e-Backpack. That’s a lot of names, a lot of business, a lot of history! We caught up with

Richie to discuss business, marketing, wins and losses and what it takes to be

a businessman in

An inside look into growing your business, overcoming

odds, and hurdling over unforeseen challenges.

India today

You’ve come a long way since starting your software technology company, Tekege, in 2004. You now own a digital marketing agency (award winning, might we add), a SAAS product by the name of Aavaz, and you continue to build new mobile apps like BuzzBeat and Wedding Guru. Where do you get your ideas and vision from?

What’s your biggest priority?

Right now, it’s Ergo. My roots were in the technology field, and while I was getting business through Word of Mouth, I decided to start marketing my services in India. I discovered that unless I was trying to hire these multi-national behemoth companies (which I could never afford), I was stuck with sub-par talent claiming they knew digital. I am on a mission to start the digital agency that looks at a company’s entire business model, and uses the digital platform as the store-front and not just a website that is talking AT people. A functioning website, sound content marketing, engaging social media and best practices on SEO/SEM/Blogs is what works. Nobody is doing that as well as we are.

Why did you launch Ergo Agency?

While building complex software systems for my clients, they’d often ask for design interfaces for them. So, we started hiring designers to help with that. That’s how Ergo was born. What started from design, needed develop-ment, which needed inbound market-ing (SEO). The concept of usability and lead-capturing websites became popu-lar and I hired a team of marketers (some from the US) to help me build the best damn agency in India.

What sets you apart from the noise and all your competitors?

I’ve always believed in honesty and integrity. I’m a fair person—in my business and in my personal life. There are too many people out there who are trying to rip people off. A testimony to that would be the number of word of mouth clients I get. People want to find trusted partners. I believe I’m one of the rare breed.

Q A&

Ergo Agency, 128-B, 3rd Floor

Shahpur Jat Village,

Near UCO Bank

Landmark - Siri Fort Auditorium

New Delhi - 110049, India

+91 11 4315 5300

rchauhan@ergoagency.com

www.ergoagency.com

ERGO IS TAKING

newclients

WITH RICHIE CHAUHAN, SERIAL ENTREPRENEUR

. . . . . . . .. . . . . . . . . . . . . .

Organically. I started Tekege Solutions because I studied IT in Canada and the US. I got my first client right after school with the Motion Picture Associ-ation of America and realized- there is no way I can do this myself. With the road wide open for opportunities, I decided to source labor from India. I thought it was temporary- but I ended up finding more clients and decided to settle down here. Aavaz is a partnership with a client that I built call-center software for and the Mobile Apps are hobbies. When you’re in the tech field, you’re constantly innovating.

editor’s letter

in India—are certainly booster shots of positivity. Yet, Memoirs of Garbage, the cover story my assitant editor Sonal Khetarpal has filed for this issue, veers from that trend. May be it’s why this was such an important story to be told. That waste management is a massive problem for India is obvious—a look at our big cities will show we stink (pun much intended!) at sorting our mess. Yet, driven companies such as A2Z Group, E-Parisaraa and Waste Ventures India, all of which work on different aspects of responsibly managing waste, are battling the uphill task of morphing cash from trash. Government policies and poor civic awareness has given these entreprenuers a strange combination of a business segment with several loopholes and “demand gaps” but no easy solutions in sight. Don’t miss their story on Page 22. We hope you will, as we do, root for them. India certainly needs their success. In other stories, do read our case study on product design. That good design is good business isn’t a truism many Indian companies fully appreciate. Design has far too long been relegated to pretty looks. The successful design evolution of Mobiliz, a low cost computer for rural users, demonstrates how design can transform business. Read about the makeover on Page 37.

Our stories usually leave me feeling optimistic. Stories of gritty entreprenuership and dogged persistence—the foundation stone for building a successful business

smarting from waste

shreyasi singhshreyasi.singh@9dot9.in

MANAGING DIRECTOR: Dr Pramath raj SinhaPRINTER & PublIshER: anuraDha DaS mathur

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designsR. CREATIvE DIRECTOR: jayan K narayanansR. ART DIRECTOR: anil VKAssOCIATE ART DIRECTOR: anil tsR. vIsuAlIsERs: manaV SachDeV Shigil narayanan & SriSti maurya vIsuAlIsER: nV BaijusR. DEsIGNERs: hariDaS Balan, manoj Kumar VP charu DwiVeDi, PeterSon Pj & DineSh DeVganDEsIGNERs: PraDeeP g nair & ViKaS Sharma

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sales & MarketingvICE PREsIDENT:nc Singh (+91 9901300772)NATIONAl MANAGER (PRINT & ONlINE)rajeSh KanDari (+91 98111 40424)NATIONAl MANAGER (sPECIAl PROjECTs)arjun Sawhney (+91 95822 20507)sENIOR MANAGER (busINEss DEvElOPMENT)anShu Kumar (+91 95914 55661)MANAGER (busINEss DEvElOPMENT)SuKhVinDer Singh (+91 8802689684)

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oFFiCe addressnine Dot nine meDiaworx PVt ltDa-262, Defence colony, new Delhi–110 024

for any querieS, PleaSe contact uS at helP@9Dot9.in

PuBliSheD, PrinteD anD owneD Bynine Dot nine meDiaworx PriVate limiteD.PuBliSheD anD PrinteD on their Behalf By anuraDha DaS mathur. PuBliSheD at a-262, Defence colony, new Delhi–110 024. PrinteD at tara art PrinterS PVt ltD.a-46-47, Sector-5, noiDa (u.P.) 201301EDITOR: anuraDha DaS mathur

8 | inC. | march 2014

BEHIND THE SCENES Companies at the Heart of Everyday Life

Travel and accomodation AABEE Resorts and Travels were responsible for ensur-ing David Lloyd, the popular British comic artist, and John Layman, a Marvel comics writer reached the Comic Con in Delhi as per schedule. This Delhi-based travel agency booked the flight tick-ets and accomodation for all the comic maestros attend-ing this event. Started in 1999 by Dushyant Bhalla, AABEE has expanded its business to include holiday packages, and other travel services including getting Forex and international SIM cards. Their three offices in Delhi have taken care of travelling needs of Samsung, MTS India and Delco Automotive.

Exhibition set-up The entire set up for Comic Con, which has become an annual jamboree for the city’s comic enthusiasts, at the Thyagaraj Sports Com-plex in Delhi was done by Concepts Brand Support Services. Founded by Gau-tam Sardana, this three-year-old company has been associated with Comic Con since its inception in 2010. They provide on-ground sup-port for events and exhibi-tions—from setting up of exhibition booths and venue, printing branded content and event execution. With 30 per-manent employees and another 50 temporary ones, this Delhi-based company has done events for Accor Hospitality and Expedia.co.in.

10 | INC. | MARCH 2014

09.02.2014, 3:00 P.M. Comic Con, Delhi

pHoToGrApH By SuBHojIT PAul rEporTED By SoNAl KHETARPAl

Social media The answer to how to create buzz around an event is social media. The com-pany that formed the social media plan for Comic Con is the web agency, Webcontxt. It was founded in 2010 by Gautam Seth and Siddharth Shah. This 26-people company organised two Twitter contests prior to the event to build excitement for this comic convention. During the three-day event, their team of five people were continuously tweeting updates and posting live commentary on Twitter and uploading candid photos on Instagram. Web-contxt has also handled social media for Nestle and Jaipur Literature Festi-val from their three offices in Delhi, Mumbai and Jaipur.

launch News, Ideas & Trends in Brief

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Where are The Women Innovators? Good question. here’s how one Silicon Valley insider is trying to find the answer

Why this topic?After coming to Silicon Valley

from North Carolina a few years ago, my wife made me realise something strange. You don’t see women here at tech conferences. You don’t see women on the boards of tech companies. You don’t see women CTOs. When it comes to the workplace, women aren’t there. It’s like the Twilight Zone.

So I started researching the causes of the problem and speaking out about it. And the more I spoke, the more attacks I endured from the Silicon

Valley elite. I said, Aha! This is the root of the problem.

Why did you decide to crowdsource the book?I started a major research project at Stanford (on women and technology), which we are wrapping up right now. But academic papers have to be boring. I said, Let’s do a book about this issue where I can express all the opinions I want. But it doesn’t make sense for a guy to tell women how to fix their problems.

I used my private mailing list, hoping I would get women to help me spread the

Male academics don’t inspire female innovators. Female innovators inspire female innova-tors. So when Vivek Wadhwa sought to highlight

women’s struggles and achievements in the innovation economy, he teamed with journalist Farai Chideya to solicit stories from women around the world. Wadhwa, whose CV includes Stanford, Duke, and Singularity University, took a break from editing the book to discuss the project with editor-at-large Leigh Buchanan.

launch

14 | Inc. | MARCH 2014

word. My goal was to get 30 to 50 women to tell their stories. I ended up with more than 500. I also crowdfunded this, so it wouldn’t be just my project. I wanted to raise $40,000. I got $96,000.

Which stories impressed you?The stories are all amazing. You see how from the time they are young, women are not encouraged to take on hard mathematical tasks or to do world-changing innovation. They are discouraged in school and then in college and then they join the work force and find they are the only female engineer in the department or the whole company. And they get treated differently. Every woman who contributed told us about a hardship and how she got over it.

In your experience, do men and women innovate differently?Women are more sensible in the businesses they start. They are not going to ask for a gazillion dollars from a venture capitalist for some harebrained scheme to do yet another photo-sharing app. They focus on the practical. Which also means their companies are initially smaller than the guys’ companies. Which is OK. They have lower failure rates. I like those companies better.

Much of innovation involves teamwork. Does that help women—because they are naturally more collaborative—or hurt them, because the men in the group may be more assertive?Women benefit from being more collaborative. They generally talk a lot more about their partners and the support that they got and mentorship. They value teamwork more than the guys do. But the guys can hold them back.

What do you hope female readers will take from these stories?Women face the same problems everywhere, but they think they are alone. Reading the stories of how other women surmounted their difficulties is going to provide inspiration. I have no doubt about that.

What about male readers?I think the majority of readers will be women.

Eat to Win A meal plan for leaders

You lead as You Eat a healthy diet is an important part of being a good leader. Just how important, you might be surprised. For entrepreneurs, eating isn’t just about satisfying hunger. So say the growing ranks of nutrition experts who specialise in fine-tuning the metabolic performance of business leaders. “You’re like an athlete in the workplace,” says Richard Chaifetz, CEO of ComPsych, a Chicago-based provider of corporate well-ness and employee-assistance programmes. “So you should eat like an athlete.”

At the very least, that means lots of lean protein, fruits and vegetables, and complex carbohydrates; no processed foods; and minimal white flour and sugar. But when you spend all day con-fronting challenging mental tasks, the brain’s nutritional demands are greater.

For example, have you ever worked so hard that it felt as though your brain were on fire? It sort of was, says Patti Milligan, director of nutrition at Tignum, a consultancy that helps busi-nesses boost employee performance through holistic wellness programmes. “You produce lots of oxidants in the brain when you’re working,” she says. “Foods that are high in antioxidant—berries, beans, apples, tea—act like flame retardants.”

And don’t forget water. “The brain is 70 to 80 per cent water,” Milligan says. “When it’s metabolically active 10 to 12 hours a day, removing metabolic waste from the brain requires optimal hydration.” She suggests “super-hydrating” with two cups at the beginning of the day and avoiding “dehydrators,” like processed sugary foods, high doses of caffeine, and soda. And watch out for

BrEakFaST: To start your brain and ensure long-lasting energyEaT Egg-white omelet, breakfast burrito on whole-grain tortilla, steel-cut oatmeal with fruit, smoked salmon on whole grain bread, high-fiber muesli with nuts, fruit, and yogurt

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“brain fog,” which can be evidence that you need to hydrate.Speaking of caffeine, “coffee depletes serotonin, which con-

tributes to a sense of well-being,” says Barbara Mendez, a New York City nutrition consultant who works with many business clients. “If you have it on an empty stomach, that quick delivery to the bloodstream leads to more anxiety and stress.” So save the coffee for mid-afternoon, when your hormonal and neural con-nections often need the boost.

If you do just one thing, cut out fatty foods. Andrew DiMi-chele, chief technical officer of Omada Health, an online diabetes-prevention programme, gave up fries and chips at lunch and

found an almost immediate boost in productivity. “A couple of weeks ago, I let this slide, and it was a stark reminder,” DiMichele says. “Not only was I sleepy and un-attentive all afternoon, but I was in a miserable mood.”

Science bears this out. According to a Cambridge University study, after five days on a high-fat diet, the treadmill performance of lab rats declined by half. Moreover, the rats eating fatty chow began to falter on a maze test they had been trained on—finding only five treats before making a mistake. The healthier rats were able to find six or more treats. And as any entrepreneur knows, it’s all about finding the treats. —Adam Bluestein

DInnEr: Lay the foundation for a good night’s sleepEaT have a healthful snack before bed—low glucose levels interfere with sleep. so does alcohol. A better bet: chamomile tea, which helps induce sleep as the body cools after drinking.

lunch: Fill up without bogging downEaT salad with meat or fish, a wrap with vegetables, sushi, veggies and grains are packed with antioxidants to fight fatigue.

SnackS: sustain energy and focusEaT Nuts and berries boost omega-3s and antioxidants. For something sweet, stick with citrus fruits. They contain pectin fiber, which helps you use the plant sugars slowly—compared with the sugar rush you get from candy. so

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BraIn FooDDrink WaterA 2011 study in the British Journal of Nutrition found that even mild dehydration in men reduced vigilance and memory and increased tension, anxiety, and fatigue.

Put DoWn the French FryA 2009 cambridge university study found that high-fat diets made laboratory rats not just slower but dumber.

Sugar = BaDA recent ucLA study found that a diet high in fructose slows the brain, hampering memory and learning. omega-3 fatty acids—found in salmon, walnuts, and flaxseed—can counteract the disruption.

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Mark Stevens does not want to be loved. His eyes glaze over when he hears the word empowerment. He’s still trying to figure out what work-life balance means. He is not a motivator in chief. Or a chief happiness officer.

Stevens, the founder of the Rye Brook, New York-based branding firm MSCO, is the boss. Plain and simple.

Remember the boss? He or she seems to be a dying breed. Rather than touting the structure and discipline of their companies, founders these days seem more interested in flaunting their quirks and perks.

But there still are CEOs like Stevens, who fires whiners; encourages confronta-tion; imposes high, unyielding standards; and manages with the understanding that his word is law. “You can’t be soft in a tough world,” he says. “You’ll never make it.” Ste-vens, 56, founded the 46-employee com-pany in 1995 and serves customers such as AIG and Wolfgang Puck.

In fact, research shows that tough love can be an effective form of leadership—provided one strikes the proper balance between tough and love. One 2011 study out of Cornell University, the University of Notre Dame, and the University of West-ern Ontario found that disagreeable lead-ers had higher salaries and were considered more formidable managers than agreeable ones were.

The challenge is to set high demands while still being supportive. “When you build a relationship on trust, then the majority of people are OK with tough love,” says Christine Porath, a professor at Georgetown University’s McDonough School of Business. “They’ll rise to the occa-sion; some thrive on it.”

That’s been the experience of Frank Poore. The founder of CommerceHub, a cloud-based fulfillment system for retailers,

16 | Inc. | MARCH 2014

The lost leadership art of Tough love Some founders still manage the old school way. The trick: striking a balance between tough and love.

launch

don’t Be Big Brotheruniversity of chicago researchers found that when people are being monitored (or monitoring themselves) too closely, they tend to underperform—that is, they feel choked.

rudeness hurtsIn a study by the university of Florida and the university of southern california, people who were exposed to uncivil behav-iour were 33 per cent less cre-ative and four times less helpful than those who were not.

how to Kill productivityIn a Georgetown university poll of 800 managers and employees, 80 per cent said they had lost work time worrying about a rude incident at the office.

how tough istoo tough?  There’s a fine line between being tough and being a jerk. cross it at your peril.

Poore admits that he rips apart drafts of employees’ presentations—just to see if they will push back. “That might be dis-couraging to some people,” Poore says, “but I want people to come in with their ideas fully baked and be able to defend themselves.” At the same time, however, Poore is careful never to make his criti-cisms personal, a lesson he learnt from an overly cruel drill sergeant he met in the Army. “If you attack people personally, as opposed to attacking their ideas, you’ve poisoned the well,” he says.

In fact, studies have shown that being belittled actually does have a negative effect on cognitive function, says Porath. “You never want to use fear as your pri-mary motivator,” she says. “Even if it makes employees want to perform better, they can’t.”

Indeed, managers who exert too much toughness and not enough love might dis-cover some unintended consequences. That’s what Judah Schiff saw in the early days of JMAC Supply, the security-systems company he launched in 2009. Schiff is only 24, but he runs his company like someone three times older. He insists that employees clock in and out, even for lunch. He fires so-called clock watchers and peo-ple he catches switching screens on their computer when he walks by.

In 2012, that resulted in such intense churn that 24 people were fired or quit, on a team of just 14. Schiff hasn’t changed, though he spends more time in the inter-view phase making sure potential hires can handle the pressure. The company still loses about 12 employees a year, but to Schiff, it’s worth it if it means gaining two valuable staff members. —Issie Lapowsky

Badass-Boss hall of FameA gallery of uncompromising, and wildly successful, leaders

STEVE JoBS: ThE PErFEcTIonISTGave employees a higher purpose but was unsparing about their shortcomings.

BarrY DIllEr: ThE TaSkMaSTEr

Embraces creative conflict but intimidates employees into

pulling all-nighters.

MarTha STEWarT: ThE conTrol

FrEakmade a fortune on

her attention to detail but has

trouble ceding control.

GEorGE STEInBrEnnEr: ThE coMPETITorcore belief: “Winning is the most important thing in life, after breathing.”

ScoTT ruDIn: ThE hoThEaDproduced hits such as The Social Network and School of Rock; once fired an assistant for bringing him the wrong muffin.

MARCH 2014 | Inc. | 17

I love selling. But I’ve always been suspicious of marketing, at least the way it seems to be practiced by most companies. It seems to me that a lot of marketing is often deployed to cover up a product’s deficiencies rather than point out what makes it great, to confuse as much as to illuminate.

So there is no marketing department or chief marketing officer at 37signals. Instead, we behave as if everything we do is marketing. Customer service is marketing. So is product quality. The phrasing of that error message, what you call that button, how you greet your customers—it’s all marketing. And so far, so good: Our flagship product, Basecamp, has earned the business of tens of thousands of businesses almost entirely on the basis of word of mouth.

But I’ve recently begun wondering: What would our business be like if we put some effort into formal marketing? How many more people could we reach? How many more Basecamps could we sell if far more people know about Basecamp? So we decided to talk to some marketing execs about what they would do if they were charged with spreading the word about Basecamp.

It was an interesting exercise. Not because we hired someone. We didn’t. But I learned a lot about marketing in the process.

When I hire a designer or a programmer or an office administra-tor, I know what I’m getting. But marketing is different. The very def-inition of the term changes depending on whom you’re talking to.

Marketing Without Marketing Rather than spending money to snag new customers, lavish some love on your current ones

myself thinking less about new customers than about our existing ones. So we made a decision: 37signals will begin spending money on marketing. But rather than targeting new customers, we’re going to focus our energy and resources on helping current customers get more out of Basecamp they have.

You’re probably thinking, Say what? If you already made the sale, why bother selling it again?

That’s the thing. If my crash course in marketing taught me any-thing, it’s that I don’t want to market to boost sales in the short term. Instead, our marketing efforts will be about expanding our current customers’ awareness of what’s possible with our product. I want today’s customers to know more about how Basecamp can help turn them into heroes of progress at work.

The way I see it, I can spend a lot of time and money trying to persuade a bunch of newcomers to try Basecamp. Or I can spend a lot less effort helping current customers get more out of something they’ve already purchased and enjoy using. As I said at the outset, sales take care of themselves when you put out a great product and treat your customers with the ultimate respect.

Or, to put it another way: If you take care of your existing cus-tomers, they will take care of your new customers.

Follow Jason Fried on Twitter: @jasonfried.

To some, it’s all about search-engine optimisation. To others, marketing means advertising. This one speaks in terms of pub-lic relations. That one approaches marketing through the lens of analytics.

But what was interesting to me was that no matter the spe-cific orientation, every marketer we met with was focused on one thing: customer acquisition. To the marketers—to most people, I guess—the goal of marketing is to expand your market by pick-ing up business that you didn’t have from people you didn’t know. I understand that. You market to increase awareness, attract customers, and spark sales. It makes perfect sense.

But the more I spoke with all of these talented and passionate marketers, the more I realised that I wasn’t interested in what they had to offer. In fact, I found

18 | INC. | march 2014

Get Real BY Jason FRiedJason Fried is co-founder of 37signals, a Chicago-based software company. He is a man, not a machine.

illustration by Peterson PJ

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An inspiring fanThe Gecko project was crowdfunded on Indiegogo with a goal to collect $50,000 in less than two months. Not only did the team surpass that goal to collect $1,35,410 but it even got Apple co-founder Steve Wozniak to pledge $100 and tweet about it.

2 0 | INC. | MARCH 2014

“This is a dummy pq. real pq is tk. This is a dummy pq, real pq is

tk tk tk tk.”—This is a pq attribute

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As per A 2012 World BAnk report, IndIA generAtes 1,10,000 tonnes of munIcIpAl solId WAste (msW) per dAy. A clutch of IndIAn compAnIes Is seeIng A mAssIve BusIness opportunIty to creAte Both ImpAct And profIts from thIs. cAn these entrepreneurs dIg trAsh for treAsure?

2 2 | INC. | MARCH 2014

AprIl 2013Delhi High Court expresses serious concern over the failure of the Delhi Development Authority (DDA) and the government to find new sites in the capital for dumping garbage. The issue acquired urgency as the dumping sites in Delhi at Bhalaswa, Ghazipur and Okhla were overflowing and DDA hasn’t allotted any new site for landfill.

septemBer 2013 A report by IT trade body ASSOCHAM declares that Bangalore is on its way to become the e-waste capital as it generates 18,000 tonnes of e-waste in a year.

June 2013 The only dumping ground for solid waste in Kolkata is at Dhapa which has reached a saturation point and is unfit for further use. Kolkata Municipal Corporation (KMC) has been looking for an alternative site for the last five years but none has been approved by the court so far.

MARCH 2014 | INC. | 2 3

ccording to a paper published in Nature, a leading international science journal, over the next 12 years South Asia, and specifically India, will be the fastest growing region for generating waste. Increasing urbanisation, a growing middle class population and adoption of high-consumption lifestyle, says a Worldwatch Institute report 2012,

has led to this spike. To handle the waste problem, the Government of India passed the Municipal Solid Wastes (Management and Handling) Rules, 2000 under the Environment Protection Act of 1986. More than a decade has passed since these rules were enforced yet muncipalities have not been able to implement proper waste disposal systems in the country. Over the past decade or so, though, a bevy of companies have spotted the opportunity in different kinds of waste—such as municipal solid waste (consisting of household waste, construction and demolition debris, sanitation residue, and waste from streets), and e-waste (mostly electronics). Here we take a look at these companies that are trying to pull India out of its trash trouble.

The Municipal Solid Wastes (Management and Handling) Rules, 2000 mandate all municipal authorities in India to implement improved systems of solid waste management for proper waste disposal. The rules don’t entitle munici-palities to collect waste from the source—the residential

complexes, the commercial buildings and others. So, the muncipalities collect waste from the city dumphouses and then move all the trash to the landfills, which are usually on the periphery of the cities. This puts the responsibility of collecting waste and taking it to dumphouses on the residents. To do that, a lot of them get into an informal contract with the waste pickers to take the garbage to these secondary dumpsites. Those who can’t get waste picker services, do it themselves or throw the garbage out on the streets.

It’s this puzzling rule of not collecting trash from the households that Amit Mittal, founder of the `935-crore engineering and infrastruc-ture company A2Z Group, attributes as the main reason for India’s

2 4 | INC. | MARCH 2014

MeMoirs of GarbaGe

filthy cities. Mittal’s rendezvous with waste began in 2005 while his company was managing facilities for the Indian Railways in Kanpur. Railway authorities asked A2Z to handle its waste disposal too. That request got him thinking—could waste management be an exciting new vertical for him? As Mittal set out to figure out the industry’s commercial viability, he discovered the many, many flaws that needed to be fixed.

First, he realised that the few waste management players that were operational would concentrate on only one or two aspects of the waste management cycle. They would do either of the two—transport waste or process it. No one specialised in an end-to-end solution for waste management.

After studying the market for two years, A2Z devel-oped their integrated solid waste management model, and did its first pilot study in Kanpur in 2008. The first step was to collect the waste directly from houses. Mit-tal says, “collection of waste directly from house-holds would solve many problems at once. It helped in keeping streets clean and eased the tedious process of waste segregation for the rag pickers. Since segragation was done at source, the rag pickers didn’t have to climb mounds of trash at the landfills that reek of methane.”

For collecting the waste, each residence paid A2Z a monthly payment of `30-50 and commercial complexes paid `100. A2Z forwarded the entire collection corpus to the city’s municipality. In return, A2Z got a fixed monthly sum for their ser-vices from the municipality.

This improved the eco-nomic margins for the munici-pality because A2Z charged them less than the amount col-lected. That way, the municipality made a cash surplus which reduced the amount of money spent by the government on waste management. Apart from the service fee from municipality, A2Z also made money from selling the derivatives of waste—compost (made from organic waste), Refuse Derived Fuel (RDF) (made from plastic, rubber and other combustible items), and recycled tiles and bricks (made from construction debris).

They also got the waste pickers from the informal sector to work for them. Employing them wasn’t easy, says Mittal. Rag pickers have their own associations and they maintain their loyalty to them. Any new company is treated with suspicion on account of the fact that they might take away all the waste, especially recyclables—rag pickers’ main source of income. To convince them, his company had to send a team of five people to edu-cate rag pickers about the financial and health benefits of joining the organised sector. It took them six months to establish trust with them. Eventually they did become a part of his company. Within a year, they had 300 waste pickers working for them. This model ensured all enti-ties involved make profits —the operator company, the government and the rag pickers.

Since that pilot in 2008, A2Z has grown to manage 8,000 tonnes of waste per day for 21 muncipalities across different Indian cities. Now, they work with more

than 5,000 ragpickers. Mittal says their model is also being studied by Massachusetts Institute of Technology as a case study for integrated waste management in developing countries.

Yet, A2Z Group, which clocked up an impressive CAGR of 100.69 per cent in the

2004-2013 period, hasn’t struck gold

Collection of waste directly from households would solve many problems at once. It helped in keeping streets clean and eased the tedious process of waste segregation for the ragpickers.Amit Mittalfounder, A2Z Group

MARCH 2014 | INC. | 2 5PHotogRAPH by SubHojit PAul

MeMoirs of GarbaGe

We realised we had to find a strategy to work around the unfavourable environment in India and develop a model wherein no financial transaction with the government bodies was required.

(read, it’s not making money) in its `100-crore waste management vertical. Mittal points out the dominant cause for this. A major chunk of their revenue in waste management comes from selling the derivatives of waste—the compost, RDF and the recycled tiles. But, the government doesn’t give the waste management com-pany any subsidies, grants or even attractive tariff rates to sell these derivatives. For instance, the combustible part of the waste is turned to energy or a combustible fuel like methane. To process this, A2Z had got commis-sioned to built its first waste to energy plant in 2012 in Kanpur. Now, they have four power plants, one in Kan-pur and three in Punjab. But, the government hasn’t fixed an attractive power tariff (rate at which govern-ment buys power) for waste to energy plants. The current tariff is approx `5.5 per unit which makes it very difficult for operators of waste to energy plants to make profit.

Another by-product generated from waste is com-post which is used as a fertiliser in agriculture. There is a clear cut directive from the government to the fertil-iser industry to buy and sell compost along with chemi-

cal fertilizers. Since it is not made mandatory by the government, fertiliser companies do not buy compost or give a good rate for it. Hence, companies like A2Z do not get the right price from selling compost. Mittal says till the government doesn’t take waste management seriously as an industry, the going for companies like his is going to be uphill.

It’s why companies such as Waste Ventures India, the Indian operating company of the US-based social enter-prise Waste Capital Partners, isn’t waiting for the gov-ernment to fix its policy. They understood the government’s lack of support from their first integrated solid waste management project with the Osmanabad municipality in southern Maharashtra in January 2011. Twenty-six tonnes of garbage was generated each day and all of it was dumped in open landfills. Much of it wasn’t even collected. Waste Ventures India had hired 110 waste pickers that were part of the waste cooperative. They would collect waste from households and properly dispose it. But, after three months they stopped their work because the municipal leadership was unwilling to release any payment because they refused to bribe them.

So, Waste Ventures India had to find a strategy to work around the unfavourable environment. Parag Gupta, founder of Waste Ventures, says, “We realised we had to develop a model in India wherein no financial transaction with the government bodies was required.”

After the Osmanabad incident in 2011, Waste Ven-tures started working on non-payment contracts with the muncipalities in India. As per the new model, the muncipalities would provide Waste Ventures with facili-ties to compost organic waste which comprises of 70-80 per cent of municipal solid waste. In return, Waste Ven-

Parag Gupta founder, Waste Ventures

2 6 | INC. | MARCH 2014

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tures India helps the municipality optimise its collection and collection staff schedules and then operates the compost plant. Waste Ventures incentives are aligned towards environmental processing because if they do not compost the organic waste, they cannot make their operations financially self-sufficient. That way, the municipality receives environmental processing of waste at no cost and the district has a fully integrated solid waste management process in place.

“What investors and commercial markets hate most is uncertainity and risk. This model mitigates risk. One earns from what is recycled and sold. However, our profit margins are lower because we are a social enter-prise. But, this model is financially sustainable which others can follow and make profit,” Gupta believes.

Waste Ventures implemented this model in Miryal-aguda in Andhra Pradesh at the end of 2013. The project has been named second best municipal waste manage-

ment project in Andhra Pradesh and third overall across India (for cities under population of four lakhs). The earnings of the waste pickers who processed the organic waste increased by two to three times over their prior wages. Also, more than 70 per cent of the waste was get-ting environmentally processed. Also, this model helped in selling compost directly to farmers as most of the sheds were located at the outskirts of the city. According to Fertiliser Association of India, only 0.5 per cent need for soil conditioners is met in India. No wonder, as Gupta informs, they were 400 per cent oversubscribed for compost in Andhra Pradesh.

But, the real win of the model, Gupta says proudly, is that it improved the waste pickers’ sanitation, work environment, earnings and health all at once. In fact, Waste Ventures was selected by World Wildlife Fund in December 2011 as one of the “50 Green Game Changers” in the world.

Poonam bir Kasturi, founder of bangalore-based composting solution provider Daily Dump, has helped companies such as It major Mindtree and Mahindra reva’s production plants to manage their waste. she gives Inc. India a step-by-step guide on how companies can form their own office waste management programme.

how to start your office waste management programme

1the first step is to understand the kind of waste that is gener-

ated in the office. Differentiate the waste produced in terms of bio-degradable waste (includes kitchen waste, fruits, flowers); recyclable waste (plastic, paper, glass); toxic waste (medicines, batteries, chemicals) and rejects like sanitary waste that goes to landfills. Also, estimate the quan-tity of each type of waste that is produced. 60-80 per cent of office waste can be either composted or recycled.

2once that has been figured, put dustbins at the common areas in the office premises.

it is better to put dustbins at short distances from each other rather than one big common dustbin. Also, ensure there is a separate dust-

bin for wet waste, recyclables such as plastic and paper, and toxic waste. the dustbins can be differentiated on the basis of colours or different stickers. this helps in segregation of waste. it is an absolute must in waste management because if the dif-ferent kinds of waste gets mixed, it is very difficult to process it.

3it is also essential to create awareness about the impor-

tance of waste management in your office. it has to be an inclusive policy where everyone from the top manage-ment to the lower echelons of the organisation is involved. First, explain its benefits to the mainte-nance staff since they will be the one implementing the waste

disposal process. then, move on to all the employees. this can be done by dividing everyone in small batches and showing them a presentation or a small movie on waste management which can be followed by an interactive session. this can be repeated every six months so that the enthusiasm doesn’t die among the employees and it becomes their habit.

4the last step is to devise a strategy for waste disposal. Dry waste needn’t be col-

lected everyday. it can be stored in a separate space and collected once in two or three weeks. Wet waste has to be collected every-

day. it can be composted, or if its quantity is huge wet

waste can be con-verted into bio gas by installing a bio gas plant on site.

Poonam Bir Kasturi

MARCH 2014 | INC. | 2 7

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The Indian government woke up to the colossal problem of e-waste a bit late and proposed a draft e-waste policy, e-waste (Management and Handling) Rules, 2010. These rules were gazette notified in 2011 and came into effect in May 2012.

By then, Dr P. Parthasarathy had already been working to counter the e-waste problem for several years. Parthasarathy used to work in Singapore in the early 2000s for a recycling company that specialised in precious metal recovery from discarded electronic equipments. In 2004, he moved back to Bangalore to start E-Parisaraa, an electronic waste recycling com-pany, both to provide solutions to a mammoth prob-lem, and to cash in on the right market opportunity.

Today, Parthasarathy claims E-Parisaraa is India’s first e-waste recycling company to be approved both by the Central Pollution Control Board and the Kar-nataka State Pollution Control Board. Their first pro-cessing unit is located on a 1.5 acre land in Dobaspet

A report released by IT trade body ASSO-CHAM in September 2013 reveals that Bangalore is soon to become the coun-try’s e-waste hub generating about 18,000 tonnes of e-waste a year, grow-

ing at a compounded rate of 20 per cent per year. Fol-lowing Bangalore is Mumbai at 10,000 tonnes a year, and then Delhi and Chennai.

E-waste refers to discarded electrical and elec-tronic devices—mobiles, computers, tubelights, bulbs, wires, cables, refrigerators. When intact, these devices don’t pose any threat. But, when dismantled and dumped in the scrapyards or landfills, the harmful metals present in them such as lead, chromium, mer-cury seep into the environment and contaminate it. They also affect the scrap dealers who dismantle the e-waste without any proper equipments as they burn the components in the open which leads to emission of poisonous gas fumes.

Robert John, CEo of Earth Sense gives some basic steps to consider while drafting your company’s it policy for e-waste management.

1Procure hardware from vendors who promise to take

back e-waste when it becomes obsolete.

2try to extend the use of electronics by as much as

possible. it helps in reducing the generation of e-waste drastically.

3Achieve 100 per cent environmentally responsible

disposal of e-waste by getting the services of an authorised e-waste recycler rather than selling it to people from unauthorised informal sector.

4Ensure no one disposes of electric items in the

dustbins. this can be done by putting separate E-bins for collection of e-waste in the office premises.

Robert John

Four simple steps for office e-waste management

2 8 | INC. | MARCH 2014

MeMoirs of GarbaGe

which is around 50 kms from Bangalore, an area that has been earmarked by the government for hazardous waste management.

But, how does e-waste recycling work? Companies such as E–Parisaraa buy obsolete and discarded electri-cal equipments from electronic manufacturers or bulk consumers of electronic devices such as corporates and institutions. The average price that these recyclers give for e-waste is `30-40 per kg. Plastic items are sold for rel-atively less price, around `15 per kg, informs Parthasara-thy. These companies then bring back the e-waste to their processing unit to be dismantled. All components are segregated into glass, plastic and metal. These are sold to different manufacturers who use these recycled product waste as raw material. For instance, the copper in your desktop can be used to make electric wires, and the silver and gold in your mobile phones can be used for plating of imitation jewellery.

It might sound like a logical win-win that everybody works towards. However, things haven’t been easy for E–Parisaraa. Its e-waste processing capacity is 10,000 tonnes annually across five facilities in Bangalore, Chennai, Mumbai, Gurgaon and Kolkata but they recycle only one-fourth of that.

These problems are echoed by other e-waste recyclers as well. For instance, K.P.K. Kumaran, founder of Chennai-based e-waste management and recy-cling company Earth Sense, says they have been getting only 2,000 tonnes (10 per cent of the capacity) of their processing capacity of 20,000 tonnes across their three recycling plants in Mum-bai, Gurgaon and Hyderabad since the last five years. Clearly, there is no dearth of obsolete electrical items in India. So, the pertinent question is where does it all go.

Parallel to these authorised e-waste recycling company exists a separate world of informal recyclers that also buys e-waste. This informal sector does not recycle, but refurbishes the goods and sells them again in the secondary market. Reselling of refurbished goods gets a much higher price than selling of processed recycled metals to manu-facturers. Due to this, the informal sector pays a better price for e-waste that goes up to `100 per kg of e-waste. “If we pay more than `45 per kg of e-waste to companies, we are out of business,” says Parthasarathy.

Since companies get better price for e-waste from informal sector they are more keen on selling to them rather than properly disposing off the e-waste.Dr P. Parthasarathy founder, e-Parisaraa

This problem is worsened due to the easy proce-dure for obtaining recycling authorisation for e-waste. Anyone with barely two or three employees can also get a license, says Parthasarathy. Due to this a lot of people from informal sector become authorised deal-ers for recycling and can legitimately take part in auc-tion of e-waste in companies. This increases the competition for genuine recyclers as they bid for a higher price for e-waste. “Since companies get better price from informal sector they are more keen on sell-ing to them and make end-of-life profits rather than properly disposing off their electrical equipments,” says Parthasarathy.

To counter this, Parthasarathy says companies like his need to launch massive awareness campaigns. So, along with Umicore Precious Metals Refining, Belgium-based world’s largest precious metals recovery company, E-Parisaraa started a programme called Crystal Project

in May 2010. Under this project, they bought e-waste from the informal sector so that they can dispose off the e-waste safely. Although they had launched it for a year, the project’s success has ensured it continues till today. In 2011, they also launched a vehicle that would go around

the city collecting e-waste.Earth Sense also partnered with the

NGO, Ishta Foundation to spread awareness about the importance of recycling e-waste in corporates, schools and colleges and created the website, welovetorecycle.com. Only after work-ing aggressively on it for three years,

MARCH 2014 | INC. | 2 9PHotogRAPH by SRi vAtSA

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According to the Department of Electronics and information technology, electronics import may far exceed oil imports by 2020 as the demand for electronics in the indian market is expected to reach $400 billion by then. this has also led to the tremendous opportunity in the e-waste space which is growing at a phenomenal pace of 20-22 per cent. No wonder, a lot of companies are mushrooming in this space. And, if they are able to make profits, there is no reason why vCs shouldn’t invest in them. but before that one has to understand the three main challenges that the e-waste industry in india faces.

FRoM the PolICy PeRsPeC-tIve: the e-waste policy in india is still at its nascent stage. it was enacted recently in May 1, 2012. in contrast, if you look globally, developed countries woke up to

this problem 15-20 years back. Europe is the leader in this space. it has put in place the right policy and legislation for extended producers responsibility (EPR)—the strategy according to which the manufacturer is responsible for the entire life-cycle of its

product, including for take-back and disposal at the end of life of the product.

Even though the indian gov-ernment has made EPR manda-tory under the e-waste rules but unlike Europe it has not included any quantitative target, that is, the quantity of goods that the producer is mandated to take back at the end of its productive life. For instance, if a company sold 100 mobiles in a European market, the government made it mandatory to responsibly recycle 65% of the same. this quantita-tive target is missing in india. A reason for this could be that the government wants to give some time to producers to put in place

the take-back infrastructure required for efficient collection.

INteGRAtIoN oF INFoRMAl seCtoR: Presently, bulk of the e-waste is managed by the infor-mal sector. that disposes it off irresponsibly. Since 95% of the existing e-waste market is infor-mal, it is important for the for-mal recycling companies to structure innovative and sustain-able partnerships with the infor-mal sector players and try to integrate them in the formal supply chain. this is a big chal-lenge and has to be addressed if one has to evolve a sustainable solution for this sector.

CoNsuMeR behAv-IouR: Another big challenge is con-sumer behaviour. the mindset is that if one sells, irre-spective of the fact that it works or doesn’t, a cer-tain money is

expected to be earned. this isn’t the case in developed countries such as Europe where an advanced recycling fee is already included in the selling price of the product. So, the consumer pays for the recycling fee in advance at the point of purchase. unless producers join hands together to take such similar measures in india, the existing situation will not improve.

Recycling companies that are working to integrate the informal sector in the formal supply chain or influence the value chain—essentially collecting, disman-

tling and disposing off e-waste—in a positive way stand much better chances of getting investment. in the long run, as the enabling

environment for responsible e-waste

recycling improves, it is these compa-nies that will grow and pros-per in the

emerging e-waste market

in india.

Also, the government has missed lighting equipments such as tubelights and bulbs from the e-waste cate-gory. The policy does not mention a unified set of authorisations that recyclers require from Pollution Control Board. Due to that, recycling companies have to obtain licences from each state they operate in which is a very time consuming process as each state has a different set of regulations, says Robert.

Clearly, the journey from trash to treasure is unlikely to become a smooth run anytime soon. Hope-fully, entreprenuers like Mittal and Parthasarathy are fuelled by perseverance and grit, and can stay the course and soon make treasure from trash.

subrata barman, senior operations officer, sustainable business Advisory at the development financial institution IFc south Asia talks to Inc. India about the lucrativeness of investing in an e-waste business in India.

from 2005 to 2008, the companies giving them e-waste increased from 150 tonnes to 1,000 tonnes. As Earth Sense’s CEO John Robert informs, “Initially, almost 60 per cent of the companies we approached refused to even meet us .”

However, the problems voiced out by these recy-cling companies remain far from being solved. As per the survey done by E-Parisaraa last year in 2013, 80 per cent of the e-waste produced in Bangalore still goes to the informal sector. There are also many clauses remaining to be included in the e-waste pol-icy. The e-waste rules does not have any guidelines about the occupational health and safety of workers.

Waste Watch

Subrata Barman

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war ready

WarIndian companies are lining their security arsenals with more powerful tools, and are better prepared to both understand and deflect cyber attacks, finds CSO Forum survey.By AMAN SHUKLADesign By SriSti MAUryA

3 2 | iNC. | MARCH 2014

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Financial institutions, government, military, hospitals and mostly all businesses in today’s world collect, process and store a great deal of confidential information on computers and transmit that data across networks to other computers. this has led to the imperative need to protect sensitive business and per-sonal information, especially since the volume and sophistication of cyber attacks has also radically increased.

to bring out the complexities faced by it heads and security professionals, our group publication cso Forum did a survey with 50 companies to understand the issues and chal-lenges faced by them. the report, Annual State of Cyber Security Survey 2013, seeks to assess the current state of cyber security in india as perceived by csos/cisos, and highlighted issues and challenges in the current cyber ecosystem in the country. the findings sug-gest that cyber security breach is a “new nor-mal” for indian companies.

All the companies surveyed had a “reported security breach” in the last one year. What was encouraging though was the greater understanding, and preparedness demonstrated by csos and it teams in india to safeguard themselves from attacks.

Ready??

MARCH 2014 | iNC. | 3 3

indian companies are catching up with their global counterparts in recognising and express-ing concerns about the growing threats from cyber security breaches. As a result, more than 80 per cent of the companies surveyed have a formal security policy in place. Cyber fraud and cyber crime protection were considered to be the two most important factors in designing the content of these security policies. This was closely followed by the need to protect IPRs and government policies & regulatory compliance. Similar to other studies around the world, risk associated with employees, past and present, was rated highly at 4.2.

1. indian companies are catching up with their global counterparts

We do not have information security policyWe have an informal policyFormal policy is being designedFormal policy exist

Description of companies’ information security policy—percentage of respondents who chose from the following options

3. 76 per cent of the companies formally train their employees on cyber security

2. Disruptive it innovations were the least important factorContrary to popular hype in the media, disruptive innova-tions like Cloud computing, Big Data, Social Media and Mobile devices were rated to be the least important factors while designing these policies. Possibly, companies and CSOs are yet to fully understand the implications of these rapidly evolving technologies and formally incorporate them in their security policies. Given the complexity of cyber attacks around the world, the survey exhibited strong preference for internal self regulation, as opposed to government regulation to protect their organisations from cyber risks.

82%

14%

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Are your employees trained on matters of information/cyber security?

76%yeS

3 4 | iNC. | MARCH 2014

wAr reADy

Government needs to do more to restore confidence about cyber security in India. While 36 per cent of all CSOs surveyed were either very confident or extremely confident about the existing cyber security policies system in the country, 62 per cent were not confident with the existing government policies. Recognisant of this fact, the Indian government proposed the National Cyber Security Policy in July 2013. The policy plans to set up a national nodal agency to co-ordinate all matters related to cyber security in the country. Though ambitious, the respondents trust the government to implement these policies.

4. Government needs to do more to restore confidence about cyber security in india

A whopping 76 per cent of the companies formally train their employees on matters relating to cyber security and cyber security breaches. Equally significant, 22 per cent of the CSOs surveyed, mainly from the traditional sectors, are yet to train their employees. Despite the findings above, almost all the companies surveyed know whom to contact in the organisation in case of a cyber security breach.

The importance of the following factors in influencing the design and content of your company’s ‘information security policy’?(Rate on a scale of 1 to 7 where 1 = not at all considered, 3 = important and 5 = extremely important)

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FOrmAllY

MARCH 2014 | iNC. | 3 5

wAr reADy

Strategy Tactics. Trends. Best Practices.

Design is a series of homonyms with several different meanings. It is in no way just restricted to the world of fashion, inte-rior or graphic designing. At its core, design signifies a new way of doing things and a new way of creating value that can make products more inclusive and egali-tarian. While the former references to design are fairly well understood, it is the product and industrial design that Indian

businesses could focus more on to solve society’s most pressing problems.

Take the Simputer, for example, a palmtop-like personal computing device that was launched in 2002 amidst a lot of fanfare (it was hailed as the most signifi-cant innovation in computer technology that year by Time magazine and The New York Times). Developed by Bangalore-based Encore Software, this device had

several features convenient for rural use. It was easy to carry and handle, came with a low price tag and could run on batteries (essential in villages where electricity sup-ply is intermittent). It was also simpler than the regular PC where the user needed to know Windows, English and the func-tions of the mouse to use it. Not just that, the Simputer worked on the open source OS Linux, had a touch screen and stylus

Design Not Just PrettyWhy good design is about utility, not good looks

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MARCH 2014 | INC. | 3 7

Strategy

with simple visual icons and multilingual options to translate English into regional languages, and a Smart Card reader and writer for secure financial transactions. Due to abysmally low internet penetration in rural households, the device also had an inbuilt modem to transfer information to internal servers.

In all, the device was a product of focused thinking and was specifically developed for the rural market. And still, Simputer sales were disappointing. Encore managed to sell only one lakh units over three of its best years. Vinay Deshpande, CEO of Encore and co-developer of Sim-puter, confesses their target was “much larger”. Deshpande attributed the low numbers on the users’ distrust of indige-nous technology, and the lack of funds for marketing or large scale commercial pro-duction. He also believed that the product was ahead of its time when it was launched and potential users could not appreciate its many applications.

But, were these really the predominant reasons for the lukewarm response Sim-puter received from the market? Perhaps there was a different reason at play that Deshpande could not identify—was it truly designed keeping in mind a user working in a village?

In 2008, Pune-based DSK Digital Tech-nologies, a subsidiary of the 4̀,000-crore DSK Group, bought the technology used to make the Simputer

from Encore and started its own R&D operations to create another computing device for rural markets called the Mobiliz.

Unlike the Simputer that was devel-oped by a team of scientists at the Indian Institute of Science, Bangalore, Mobiliz was developed by a business group that had roped in product and communica-tions designer Satish Gokhale, co-founder of Pune-based Design Directions, right at the early stages of product development. “I always believe that a product should be designed outside in. So my goal with Mobiliz was to first find out what the product should look like depending on what it will be used for and then the entire electronics inside it,” Gokhale says.

Typing long reports or even page long documents would have been cumbersome on a mobile phone or a tablet like design and hence these forms were ruled out, right from the beginning. A standard laptop QWERTY keyboard was thought to be ideal for the purpose instead.

“Then when we went onto the field to understand how people in villages in Maharashtra worked, we saw they didn’t have chairs or tables to sit on and work,” he says. That meant Mobiliz had to be physically different from a regu-lar laptop so that users could use it while sitting cross-legged in a sugarcane field under a strong sun. So, Mobiliz was conceived to be a more compact device with ample space for resting the wrists. At 800-900 grams, it was lighter than a regular laptop which usually weighs between 1.5 to 2 kg. It also has a 7-inch touchscreen that can be laid flat or angled anyway to prevent the glare of the sun. The touchscreen made the interface intuitive and easy-to-use for rural users, many of whom were first-time computer users. The touchscreen also played a key role in building trust with the users. “It’s purely psychological but the touchscreen gave Mobiliz the look and feel of a high-tech product. It gave our users—farmers, dairy workers—the confidence that their finan-cial transaction and data were safe with this sophisticated device. That type of con-fidence in a product plays a big part in establishing trust,” explains Gokhale.

Apart from technology trust issues, there was another significant challenge in rural areas—the erratic supply of electric-ity. Using simple batteries could have been an option but earlier Simputer designers had observed that people interchanged polarities while using AAA batteries and battery contacts even became loose due to rough handling at times. However, there is one natural source of energy that is in abundant supply in most villages in India—the sun. Mobiliz has been designed to be powered through two small solar panels attached to the device’s storage

Management education at a premier school, even today, can be completed without ever being exposed to the fundamentals of design or product development, and you hardly ever have designers migrate into decision-making positions in an organisation.—Dr aditya Dev Sood, founder, Centre for Knowledge Societies

Simputer

3 8 | INC. | MARCH 2014

Strategy

with a microfinance business correspon-dent. That way it cannot be used for any-thing else. This prevents the device from being sold or getting stolen by non-users,” he says.

The end user of the Mobiliz today are trained (albeit literate 10th class gradu-ates, not college graduates) personnel taught to carry out specific tasks in the village, and not every member of the rural household. There are three versions of the device—silver, gold and platinum and the price varies from `20,000 for the lowest model to `35,000 for the highest version. The price range begs the ques-tion—why would anyone want to buy a Mobiliz and not a cheaper laptop avail-able under even `20,000? The manufac-turers of the product believe that the features that this device provides are not available on a normal laptop, and stress that this is only the launch price. As pro-duction volume increases, DSK aims to reduce the price to an affordable `10,000.

Their optimism may not be too mis-placed. Mobiliz was launched in March 2013 and within a year of its launch, the device has received a good response from banks, dairies and milk collection centres. DSK has tied up with 22 nation-alised banks to deploy it to business cor-respondents for carrying out banking transactions in villages of Madhya Pradesh. 300 rural dairies in Maharash-tra have connected the device with their milk analysers and milk weighing scales to measure the amount of milk delivered by a farmer and clear his dues in real time. And the team has already started work on collaborating with government and private players to develop applica-tions for floriculture and horticulture.

Simputer’s journey to becoming Mobiliz bears testimony to the fact that industrial design has the power to open up new markets

for any business. Yet, it’s not used enough as a vehicle to lead that change in India.

When it comes to design, DSK’s Philips believes it’s a cultural trait among Indian entrepreneurs to use jugaad to cobble up something, or to copy from a variety of sources to put something together instead of hiring a professional design agency that understands the right process involved in product design. He concedes that getting Mobiliz market-ready took longer than he had anticipated because of this design intervention but confesses it might well be the game changer for his company.

Dr Aditya Dev Sood, founder of inno-vation consulting firm Centre for Knowl-edge Societies, adds that education too has a role to play for the lack of enthusiasm among Indian enterprises (though it is becoming a buzzword in the startup world) for design. “Management educa-tion at a premier school even today can be completed without ever being exposed to the fundamentals of design or product development, and you hardly ever have designers migrate into decision making positions in an organisation,” Dr Sood points out. “Given these challenges, if a company has come out and developed great design, it’s laudable.” —Ira Swasti

jacket which goes into a halo sack used to carry the device. This halo sack also has enough room to carry a tiffin. It’s handy to carry on a cycle as well. As Mobiliz is a low-power device that consumes only 3.5 watts of power (compared to a normal laptop that consumes 60 to 100+ watts in an hour), it has a Lithium-ion rechargeable battery back up of more than five hours. It also dissipates less heat without cooling; reducing the harm to the farm and village ecosystem where the device will be used in.

However, what differentiates the lap-top and Mobiliz the most are their appli-cations. “Our field studies taught us that a laptop has a lot of wasted applications that never get used in a rural setting. It is an all-purpose common device,” says Vinod Philips, CEO, DSK Digital Tech-nologies. “Mobiliz, on the other hand, can be custom configured to have very specific features, say for only data entry at a dairy farm, or for e-learning at a munic-ipal school or for financial transactions

Design Wise The successful design evolution of Simputer to Mobiliz bears testimony to the fact that industrial design has the power to open up new markets for any business.

Mobiliz

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Facebook recently launched a trending section which is visible on the top right hand side of the homepage for it’s web visitors. The feature isn’t currently avail-able on mobile. Since this is a major change on the homepage and seems to compete with Twitter’s trending topics, it has piqued the interest of marketers. So, before your brand manager presents a snazzy presentation on Facebook Trends, it’s smart to get an indepth view of what these “trends” means for your business.

First, what is trending?According to Facebook, “it’s a personalised list of the most mentioned words and

phrases at the current time with short explanations of why each is blowing up. A click-through leads to a page of mentions by friends and public posts by anyone who lets people “follow” them.”

Facebook has an “explanation” feature which details why a particular topic is trending. This might seem to some as an improvement on Twitter because the challenge there is that often it isn’t clear why something is trending. Facebook’s explanation clarifies the why, and stokes a user’s interest which might generate more clickthroughs for Facebook.

For marketers, an important question has been—is Facebook personalising

Strategy

Social Media#NotSotrendyFacebook’s new feature unlikely to be a marketer’s power tool

trends based on a user’s interests? Face-book claims: “Topics are personalised based on things you’re interested in and what is trending across Facebook overall.” I doubt though that the feeds are person-alised. This is a quick snapshot of the trends on my profile for the past two days:

Day 1But, I barely ever like any sports pages, and am as uninterested in Microsoft as in Justin Beiber. On my larger friends list also, there were very few people talking about Jai Ho that day. In fact, more peo-ple had updates on the movie the next day but it wasn’t trending then.

Day 2Again, no one on my list was talking about the Celebrity Cricket League or the Chinese tennis player, Li Na. On Republic Day, there were definitely several posts by friends or pages I liked but that is still on the second place for me. So, it seems Facebook takes a more macroscopic view of trends—more at a region level, not at an individual level. Also, Facebook Trends aggregate the headlines of the day while Twitter Trending Topics check the pulse of the moment. More users would be interested in that “pulse check”.  

As marketers, does Facebook Trends change our lives? Although Twitter does use this feature as a source of revenue, Facebook is yet to announce anything like that. Even in the near future, I don’t think Facebook Trends will directly be used as a revenue source at least not until

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which the company could eventually drive more real time marketing/advertising. Actually, “real time” is the goldmine for today’s advertisers. Facebook must be hoping their trending feature will help them get to that.

Apart from brands which are involved in the highly topical issues such as

movies, cricket and politics, I see this having little benefit to marketers in its current avatar. If you are promoting a new movie which will get mass traction on a specific day or if a politician gets talked about a lot on a given day, the trending features makes what’s popular more popular but it doesn’t have the ability to make something “trendy” out of an issue people are hardly interested in. For instance, Akshay Kumar’s new movie Holiday probably reached out to a much larger audience since it was trending across the home page of millions of people who logged onto Facebook in India. On the other hand, actress Parineeti Chopra began trending after the release of her movie when her performance was appreciated and not when the trailer/movie was released. Clearly, the Akshay Kumar release has more interest to begin with.

 Another reason why Facebook’s trends are unlikely to take away from Twitter’s is because most content on Twitter is public. One can see the opinions of both people you know personally, and those that you don’t. However, Facebook’s privacy settings make it more restrictive. Their move towards the trends seems directed more to their goal of being a one-stop news source rather than a brand medium. Brand messages will come up when Facebook  as a news source is firmly established in the minds of the consumer. Considering the fact that it’s the largest media platform in history, that seems quite possible. But, that is definitely not now, or even in the next six months. And, that’s as far as one can forecast about anything on the internet! —Saurabh Parmar is the founder of Brandlogist Communications. He is also a visting faculty at Indian Institute of Mass Communication, Delhi. You can reach him here: www.facebook.com/Brandlogist.

Strategy

Facebook gets the product right via various iterations.

So, why have it in the first place, you might ask? I think they introduced it for three reasons—to build further engagement and clickthroughs, serve Facebook’s objective of being the ultimate news destination (considering Facebook is currently the largest medium in the world; bigger than any newspaper or TV channel ever!), and to capture current consumer interest by

Day 1

Day 2

MARCH 2014 | INC. | 41

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The Way I Work | ruchir and anuj Bang, roomsXML

We don’t have formal meetings in office. But at home we always end up talking about work.”

“

Brothers Ruchir and Anuj Bang don’t know what they would have been if they weren’t entrepreneurs. Doing anything else never seemed attractive or likely, the duo say. Fortunately, with building roomsXML, an online accomodation distribution system designed for travel companies, they have validated their belief that entrepreneurship was indeed a calling. In the past six years since Ruchir Bang, the elder of the two, founded roomsXML with his father Prakash Bang, the company has grown to nearly `150-crore in annual sales, has offices in India, United Kingdom, Australia and the US, and a real-time availability of an inventory of nearly 79,000 rooms (three-star and above) around the world. The brothers credit it to their easy rapport and shared work ethos, especially their “mild-OCD” attention to detail. Here, the brothers talk about that dynamic, and the management style they’ve cast roomsXML in.

as ToLd To shreyasI sIngh | PHOTOgRAPHS By jITen gAnDHI

4 4 | InC. | MARCH 2014

ruchir Bang: In 2007, when we started roomsXML, I was 25 years old. And, by then I had already been in business for more than six years with RupeeSaver, a reverse auctioning portal for consumer electronics with my father. Although the site had more than 1,00,000 subscribers at its peak, our revenue model unfortunately wasn’t sustainable. Plus, the cash outflow was quite high, and we pulled into my father’s savings account to fund the business. In 2000, we started speaking to some VC funds, and got some very attractive valuations. But, just as the deal was about to come through in 2001, the NASDAQ crashed and the dotcom bubble burst. So, we had to eventually close the portal. But, the experience with RupeeSaver and its closure was one of my biggest learnings, especially since that business was all I wanted to do. No MBA could have taught me those lessons. Although that company not working out did cost us a lot more than what an MBA programme in the US would have!

an easy rhythm Ruchir (left) and Anuj Bang

enjoy jogging together every morning. It’s the best way to

begin the day, the brothers say.

MARCH 2014 | InC. | 4 5

strategy

HR person, and we don’t want to have that. Each person has been interviewed by me. And, I do their appraisal along with their functional managers. Actually, in a business like ours, after our technology plat-form, people are our most critical function. Why would I delegate that? As far as possible, and as long as it’s possible, I want to run the HR function myself. Everything else that can be delegated—marketing, customer service, financial compliance—is headed by our heads of functions. Thankfully, our approach seems to have worked. Nearly 80 per cent of our team has been with us for more than five years. The attrition rate of the company is almost zero. Last year, we lost only two or three people. Even those were really young women who had to shift

cities because they got married.

lso, we don’t need to recruit people in big numbers at any one point. We currently have 45 people in our Pune headquarters and we hire two or three people at a time. Without sounding immodest, I pride myself on being able to hire right. And, I have a few rules when interviewing people. First, I don’t look at education. I don’t believe in formal education being a predictor for success at work. More than whether they have MBAs or Master’s degrees, I’d rather try and find out if they have an analytical mind and a positive approach. In fact, I’ve never hired people with too much theoretical knowledge. They come with too many fixed ideas. People in entrepreneurial companies need flexibility, and the

ability to do new things. Testing people for basic logic is more impor-tant. So, we’ve designed a couple of tests to do this. My other rule is that we never hire anybody from the travel industry. No pun intended, we can do without that baggage! And, I never hire from competitors because they are trained in a different way.

aB: Because we hire so carefully, it’s easy for us to keep our people together in a well-knit group. We celebrate small successes, for example, by having our sabudana vada parties. Every time we achieve a small target we had set for ourselves, we order in for sabu-dana vadas. The first party for that was in 2007 when we hit sales of 3,000 pounds per day. Our next milestone is selling a room per

Just how old I was when RupeeSaver started, when roomsXML began, Anuj was just 18 years old. In the beginning, I had my hand in everything, and Anuj was really apprenticing. But, we realised soon he has a very analytical mind. I have more of a commercial mind. I’m more adept at financing and marketing. So, we started dividing responsibilities according to our natural strengths.

anuj Bang: Over the past few years, these responsibilities have evolved quite neatly—now I look after all the back end (operations, product development, technology and inventory mangement). Ruchir looks after the front end, including marketing, business development, finance and HR. Because our roles have evolved this way, and we handle totally different functions, we’ve managed to ensure that there is no conflict or stepping on each other’s toes. The lines of com-mand are very clear for those who work for us. There is no confusion in anybody’s mind about who they need to go to for what type of query. Plus, we’ve consciously maintained a very strict rule that our team members can only approach the right person for the right job. Of course, we know what we are doing in each other’s functions but we don’t get involved in the day-to-day decisions in that. If there is something related to my scope of work, we are always open to difference of opinion. We respect that there can be two points of view. We articulate the pros and cons. For example, if we are entering a new market, we will veer towards his decision because he’s more exposed to the market. If that decision was on product, my decision would be more weighed in.

Actually, we work very hard towards maintaining that as a uni-form company culture. The ideology of culture is common to Ruchir and me. We want it to be non-hierarchical, non-bureau-cratic and transparent. And, that flows from Ruchir and me. Because people see us engage with each other very honestly and casually, it becomes the way for the entire company.

rB: Fortunately, our HR practices have really benefitted us. I have very strong view on the HR function. So far, we’ve never had a designated

“We never hire anybody from the travel industry.

no pun intended, we can do without that baggage!”

A

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strategy

fidence to run the business we want the way we want—to run a com-pany with zero debt and zero investors. That’s the biggest asset we have—we don’t have to answer our investors, or “show” numbers to VCs or anybody. We can take our risks, and make our own decisions. There’s a quite bit of interest in a company like ours. But, we don’t have a crunch of funds. If we ever exit, it will be a complete exit. We are entrepreneurs. We want to drive the business in the way we think is fit. That approach could be wrong or right. But, by becoming entrepreneurs, that is the privilege we have bought ourselves. We don’t want somebody with a 10 per cent stake telling us how to run our business. The day we stop liking what we do, we will exit. But, that day is far, far ahead. But, we are work-ing towards our ideal situation—to have the company on auto pilot so we could focus on new ideas after a couple of years. I’m sure both of us will get into a new project. I’m sure we’ll both definitely work together, and we’ll have a model where one person takes care of the front end, and the other of the back end. Or, one person looks after the existing business, and the other focuses on the new business although I don’t think that is the right way to go about it. If we decide to do something new, we will try and repeat this model.

minute, or 1,440 rooms everyday. When we achieve that, we will have another sabudana vada party.

rB: We want to maintain this small, intimate feel of the office. To be honest, I’m very driven by how we can automate and keep headcount down, especially in our back end processes. I want to completely delink the revenue-headcount proportion by intro-ducing system and automation tools, most of which we develop internally. So, if we grow by 50 per cent in revenue, we don’t want to grow to 90 people. Technology also helps us monitor the busi-ness more efficiently. We monitor things quite closely on our dashboard. I don’t have to call people to ask for status. We have reporting systems, business intelligence systems which can throw up status. We are very much into data mining and data analytics. I don’t need to ask what kind of complaints, or how many com-plaints we have got; or how many rooms we booked in Dubai in the last week. I can pull up those numbers on my own, and keep a close track on this. With technology at hand, we don’t need to make people feel we’re questioning them.

In step With each other The brothers want to replicate their working dynamic at roomsXML for their future ventures too.

aB: I think these tools and our ability to really channel technology comes from our shared love for discipline and focus. We’re very meticulous, fastidious and detail-oriented. Maybe it comes from being Virgos! If we start something, we make sure we finish it a certain way. There are other similarities too. We’re both quite conserva-tive, and our ambitions, goals and risk appetite is the same. We have a common goal and a common approach. Actually, I’ve learnt a lot from him because he is seven years older. That age gap has worked in our favour. Because I apprenticed under him, his style has got embedded in me. I’ve almost (only, almost!) become like him. Our easy rapport and being so much in sync could have been different if we were just two years apart.

Nature wise, we’re quite different from each other though. He’s a stronger personality. He’s more friendly, and can easily make people follow him because he’s very persuasive. I am more involved in the intricacies of technology while he can articulate the big vision. But, the one strength of Ruchir’s I would love to have is his fast decision-making. He can really make tough decisions quite fast, and decisively. I need to be convinced more than 100 per cent before I take a decision. I need to eliminate every wrong possibility. That way, I’m very data-driven. Eventually, even if our decisions are the same, he would have taken that decision across the table, while I would have thought about it and mulled over it much longer.

rB: Clearly, there is an obvious advantage to work together as a family business. It’s given us the con-

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founders forum

ten Questions for tapas sarkar Tapas Sarkar puts employees ahead of customers. No wonder the attrition rate at the project engineering company Mecgale Pneumatics has always been around five per cent.

Who gives

you the best advice?

Best advice more often than not comes from

unexpected corners such as standing in a queue, in an

informal meeting or travelling in a group

with unknown people.

What was the

hardest lesson you learnt during your first

year in business? No matter how good your product is, it calls for huge

patience before you really start getting

orders.

Whom would

you trade places with for a day?

Sachin Tendulkar for sure. I deeply admire how he keeps his feet grounded and head

right on his shoulders irrespective of so much

success and pressure.

What part of

your job would you gladly give up?

Following up to collect outstanding payments from customers whom

I have known for many years.

Which tV or movie character you would like to go into

business with? Chhota Bheem. I am amazed

to see how much he influences the present generation of kids in

India.

What have

you learnt about yourself while

running your business? I have more patience than I actually think I

had.

What have

you sacrificed for success?

Free adda time with my friends.

What company do

you not want to start but wish someone

else would?A wind energy plant. I would

like to see a lot of green energy being produced in India. The

scenic view of wind farms really gives me a

high.

What is the one thing your

employees would be surprised to know

about you?That I used to write poems in my school

days.

the biggest

myth in business isSometimes you

question if being your own boss is really worth the effort. But, it is the best thing that can happen

to someone.

4 8 | inC. | march 2014

Co

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as told to sonal Khetarpal