Knowledge Partners


 Basiz Fund Service    Economic Laws Practice    Avalon Consulting  

 Spark Capital    Tatva Legal   

October 31, 2004

Ram Shriram’s "Book of Mistakes"

Ram Shriram, founder of Sherpalo Ventures, and one of the first investors in Google, helped Google's co-founders "in the Menlo Park garage by consulting his 'Ram’s Book of Mistakes', reports SiliconBeat, a new blog by reporters at The San Jose Mercury News. One of the tenets in Shriram's book, which "he started eight or nine years ago to help remind him of all the bad decisions he’d made", is that "bad hiring decisions are the most fatal".

Other extracts from the posting, which was based on an interview given by Shriram to the President of TiE Silicon Valley Sridar Iyengar about the “Google story":

--..there are huge opportunities afforded by the new Internet economy -- in China and India, especially.

--Launching a company is easy. The great thing about the Internet is you can launch and test an idea easily, and cheaply. If it doesn’t work, you can go back to the drawing board. “If you build your field of dreams, and no one comes, you can shut it down,” he said.

--The trick is small engineering teams. “Bite-sized engineering projects,” as Shriram calls them, where you can “know and measure each person’s output on a project.” That allows you to remain innovative and to launch and scrap projects quickly.

Profile of Open-Silicon's founder

siliconindia magazine has published a profile of Dr. Naveed Sherwani, Co-Founder, President & CEO of ASIC design and development firm Open-Silicon.

"Indian founders in Silicon Valley do not last long as CEOs post VC funding": report

According to a report in siliconindia magazine, "Indians who have founded technology companies - in hardware, software, or innovative biotech - are in serious trouble, once they land some venture capital".

Based on a study of over 62 Indian-founded companies that raised venture capital funding during the one year period spanning June 2003 to June 2004, the magazine discovered that more than 80% no longer list the founder as the CEO. "The founder or founders have either gone on to become board members, playing no active role or simply awaiting the vesting period to expire; or have become Chief Technology Officers and vice presidents of engineering, product development or technologies. In some devastating incidents, the founders have left the company in an acrimonious ending," the report adds.

The main question that popped up in my mind when reading this is whether the percentage of founders of Indian origin being replaced as the CEO unusually higher compared to other companies that receive VC financing?

The siliconindia report insisits that it indeed the case.

It provides the following as "comparison facts" to make its case:

· Israeli founders tend to retain their CEO titles, coming in at a whopping 54% of Israeli-founded companies still being led by the founders.

· Chinese founded companies do not list highly in seeking venture funds, and almost 90% of the companies are still headed by the founders.

· American founders remain CEO or play a very active role in the company even if an American CEO replaces them.


Hmm...

October 23, 2004

Bad VC vs Good VC

Extracts from a great post by William Luciw, Managing Director, Viewpoint West Partners LLC, in the AlwaysOn-Network blogzinw:

(-) BAD VC: Refers to "Winning DNA" and uses this nebulous criteria as an excuse to fund friends and family.
(+) GOOD VC: Never, ever(!), makes eugenics references.

(-) BAD VC: Refuses to drive more than 30 minutes to see entrepreneurs, but is concerned about their "China Plan".
(+) GOOD VC: Understands that you must go to the market to actually transact commerce, and does not sit on an Ivory Hill refusing to roam.

October 17, 2004

India emerges as new drug trial hot spot

Extracts from an Always-On Network posting:
India’s small but fast growing clinical trials industry has the potential to significantly lower drug development costs for U.S. and global companies. Drug trials in India may also mean the difference between life and death for startup companies in the biotech and medical device fields...

...Multinational drug companies like Pfizer, Eli Lilly, Novo Nordisk, Aventis, Novartis and GlaxoSmithKline have been running Phase II and III clinical drug trials in India. Eli Lilly alone is conducting tests on 20 new drugs in India, and will include India in global testing next year with its important new inhaler insulin drug, Oralin. Pfizer has been conducting limited clinical trials in India for seven years, and is testing drugs for the treatment of schizophrenia, menopause and breast cancer. A variety of both India-based and global CRO firms that specialize in outsourced clinical trials management are working to expand India’s clinical trials business. Until this year’s important regulatory changes, they had not been able to expand beyond one percent of the global market...

...But cost saving is not India’s only advantage. Genetically and culturally, India is perhaps the most diverse country on the face of the earth, argues biologist Madhav Gadgil, who teaches at Bangalore’s Indian Institute of Science. Genetic diversity is an important asset in testing new drugs because people with different genetic make-ups may respond to drugs in different ways, he notes.


October 16, 2004

MphasiS hiring doctors and other interesting job trends

Job Trends

Bangalore-based IT and BPO services firm MphasiS is hiring "MBBS Doctors" to help their "global clients" (persumably, insurance companie) "analyze and understand medical risks" of their customers (read "insurance seekers"). "Besides an ambient work culture and a sound process, you could also command a handsome package. There is after all, an alternative to the clinical side of medicine," says the company's ad in The Times of India, Bangalore (Appointments supplement; Oct. 13, 2004).

The International Jobs section same appointment supplement also carries an ad from New Jersey, USA-based generics drugs maker Able Laboratories, Inc. seeking a "Patent Research Specialist". "Responsibilities include assisting Patent Counsel to deliver quality search results and analysis relating to patent and prior art".

Wonder what the company plans to do about the candidate's H1-B visa. They might be better off offshoring the work to companies like Evalueserve which specialize in patents-related work.

IISc spin-off Esqube takes on Skype

Start-up Watch

At a time when US-based Voice-over-IP start-up Skype has drawn millions of users and also millions in venture capital from top Silicon Valley VCs, does a spin off from an Indian academic institution offering a similar service (with $200,000 in funding) stand any chance?

Businessworld magazine has carried a profile of the Indian Institute of Science (IISc), Bangalore spin-off
Esqube Communication Solutions Private Limited and its VoIP service VQube.

Esqube was founded in 2003 by IISc faculty members include Dr. H. S. Jamadagni, Dr.
K.V.S. Hari, Dr. T.V. Sreenivas and Dr. Chandrasekar. The Esqube web site descrribes the company's "current focus" as developing "novel products based on VoIP, speech and Wireless technologies". In January 2004, Esqube received about $200,000 (Rs.1 crore) in seed capital from Cranes Software International Limited, a Bangalore-based vendor of scientific and engineering software.


October 14, 2004

FEER profiles Temasek's invesments in India

It is now the turn of the Far Eastern Economic Review to publish a profile of Temasek Capital's recent large investments in India. Some extracts:

Temasek's drive into India is part of an aggressive diversification plan, sparked by executive director Ho Ching, who is also the wife of Singapore's Prime Minister Lee Hsien Loong. The company plans to reduce its exposure to Singapore from around 75% today to 33% over the next six years. It plans to have another third of its money in developed markets such as Japan and the United States and a third in developing Asian markets such as Indonesia, Malaysia and India.

The stakes for the city-state are high. Singapore wants to create a cadre of global companies in order to diversify its economy, which is still reliant on electronics manufacturing and has seen some of that core business shift to China. Corporate Singapore can wring little more from its own economy, so its cash-rich companies and Temasek have to invest abroad to grow....

For a state-owned colossus Temasek has been surprisingly nimble in India, investors say. "They are fairly savvy investment professionals, but their biggest advantage is being able to move quickly," says Puneet Bhatia, managing director of Newbridge Capital, a private-equity fund that has invested in some of the same companies as Temasek....

Indian companies have welcomed Temasek as an investor because it has a history of sticking with its investments for more than five years, where other private-equity investors might look to cash out as early as three years into an investment. "We were very interested in finding a strategic investor who would not just give us money, but would also help us develop business," says Rahul Basu, chief financial officer of outsourcing company ICICI OneSource in Mumbai. Temasek reportedly invested around $30 million in the company in August.

Temasek can also provide instant access to Singapore's top companies. The top executives of ICICI OneSource, for example, took a tour of other Temasek-linked companies in September in the hope of generating more business.

Click Here to read the full article.

October 09, 2004

Biocon founder Kiran Mazumdar shaw profiled in Forbes magazine

Click Here to read the article.

China bubble will burst soon: Sequoia Capital's Valentine

"You're about to see (the China) bubble burst in the next five years, or sooner, that will make our bubble look meaningless," Sequoia Capital partner Don Valentine said at a panel discussion in Palo Alto sponsored by Silicon Valley Bank.

According to SJ Mercury News report (in two versions here and here), Valentine's recent trip to China (as part of a SV Bank led delegation) had "only confirmed his view that Sequoia should stay away from direct investments there".

"China has no laws, no accounting system, bankrupt banks, and according to Fortune, a stock market that is made up of a den of thieves -- different from the ones on Wall Street."

October 01, 2004

Flextronics' CEO on the cos' plans for India

Singapore-based contract electronics manufacturer Flextronics has made several aggressive strategic investments in India in recent months as part of its move to make India its global center for software product design and infrastructure.

In May, Flextronics had led a $10 million investment in Silicon Valley and Bangalore, India based chip design firm inSilica. In June, Flextronics had acquired a 55% stake in publicly listed telecom software firm Hughes Software Systems for $226 million in an all cash deal. It late August, it acquired Chennai-based communications software firm FutureSoft (formerly Future Software) for 440 million.

Here are some extracts from Business Today magazine's interview with Flextronics' CEO Michael Marks:

On the Hughes acquisition:

We have really big plans for Hughes. We have a big infrastructure business and we believe we can grow the company (Hughes) faster and derive greater value for our entire company than what Hughes would on its own. So that's the judgement we made, and, in all seriousness, we won't be able to tell whether we got a fair value for a while yet. Winning by bidding is not winning. We have valued the company based on the overall value it adds, and Hughes is an outstanding opportunity for us.

On the prospects for more acquistions:
Certainly nothing major. We did Hughes because of their telecom domain expertise, we did FutureSoft because of their data communication domain expertise. If we can find other companies that have expertise that we need, we'll look at them. But we've got our hands full right now.