I was recently interviewed by Indian Express group for their publication “Advantage Bengal”. Here is a transcript of the interview for my blog readers!

1. As an IT entrepreneur what do you feel are the key strengths of Bengal as an IT investment destination?

Most environmental parameters can be offset using technology, so it is useless to compare any destination based on those parameters. Therefore ‘people’ become the biggest differential factor for any geography. People are different in different parts of the world and they become the competitive advantage and the differentiating factor. The same goes for West Bengal.

2. Please share with us your experiences in Kolkata as an IT entrepreneur.  What are the major advantages & challenges you faced as an IT entrepreneur in Bengal?

I have a mixed bag of experience in West Bengal.

Pros:

• Availability of talent
• The tightly knit peer community
• There is lack of serious competition and therefore you get clear visibility and rapid growth

Cons:

• Local market potential is lacking
• There is a proven apathy of state government towards local companies
• General lack of professionalism and dynamism

3. Tell us about Indus Net Technologies.  When and how it was set up? What is the total strength of the company?

Indus Net Technologies was set up in 1997 as a hobby. In 2002, I decided to build it into an organization and started building a team. We started with web hosting and gradually diversified into web design, web development, Internet marketing and recently into Internet strategy consulting. We did not find big enough local market and therefore pioneered the concept of selling web services through Internet. We generated a very good traction based on our innovative marketing and rock-solid project delivery mechanism. Today we are around 300 people strong and have offices in Kolkata, Chennai and London.

4. Who are the major clients of Indus Net Technologies? How big is the company in revenue terms? What are your targets? Do you have plans to increase the headcount in the coming years?

We have 8000+ SME clients worldwide. Besides them, we also serve (We cannot disclose the name due to privacy reasons).:

• Major Insurance and Financial Service companies from the UK
• Major global publishing houses in Europe and India

Our expected turnover for 2009-2010 on the lower side is Rs. 150 million. We expect this to grow at a pace of 75-110% per year on year for next five years. It is difficult to plan on revenue terms in a dynamic market scenario such as Internet services.

Our headcount will also increase accordingly. However, we are looking at breaking the link between headcount and revenues.

5. ‘Seeders’, a brain child of yours have been helping ‘young brains’ to set up IT start-ups.  Can you elaborate on the activities of ‘Seeders’? What necessitated the setting up of ‘Seeders’? How it is helping IT entrepreneurs in ‘germinating’ their business ideas and plans? Tell us about some of the major projects funded by ‘Seeders’? How big is the Corpus Fund?

‘Seeders‘ has been set up as a partnership firm between myself and Pallav Nadhani of Infosoft Global Private Limited. ‘Seeders’ has been formed to provide the right eco-systems to startups to help them grow from an idea stage to expansion phase. Most startups struggle for the right kind of mentoring, connections, guidance besides infrastructure and capital. ‘Seeders’ offers the complete package. The entrepreneur needs to walk in with the right attitude and a bright idea.

We are IT entrepreneurs and therefore we can effectively mentor and guide IT related ventures. Considering this, we only entertain business plans and proposals for IT projects. It can be of great help to IT entrepreneurs as they can get the complete eco-system in a single package. It will accelerate their pace and give wings to their ideas.

The corpus fund is of 2 crores to start with. We will continue to add to it with time as situation demands. We have reviewed over 25 business plans so far. We are in advanced level of discussion with 2-3 entrepreneurs and will soon close few investments.

6. How can one avail of the facilities of ‘Seeders’?

They simply need to visit http://www.seeders.in and fill in the paper-napkin business plan. We do not want people to create projections and detailed plan for us, unless we believe in the idea and the capability of the entrepreneur. This makes everybody’s life a lot simpler.

7. How pro-active is the State IT Department / Webel to the needs of IT entrepreneurs like you?

WEBEL did helped me very proactively when I relocated my business from power starved Dalhousie to Sector V by providing me space in SDF Building. They have always tried their level best to help us in all operational issues which was in their capacity. I will also like to highlight the help extended to us by STPI Kolkata and TiE.

State IT Department has always had the best intentions for us (IT SMEs). However, for some reason we remain deprived. To quote you a simple example – State Government is trying their level best to woo investment from Wipro / Satyam and Infosys by offering them big stretches of prime land at discounted prices. However, local companies do not get the same equal treatment. I am echoing the sentiments of a big segment of IT SMEs in Kolkata as I have interacted extensively with them and they believe it is a lost cause.

8. How you have benefited from your association with IT organizations like TiE?

TiE is a great learning and networking platform. I would say that it is like doing an “Executive MBA” in true sense. There are so many helpful and passionate people around in this wonderful organization, who passionately drive the cause of entrepreneurship. I find like minded people who feel (like me) that entrepreneurship is the only way poverty can be abolished.

9. Future plans??

Indus Net Technologies is looking at a rapid growth trajectory in 2010. We are looking at firming our base in the UK and taking our footprints beyond.

Friends,

I will be speaking @ Internet World in the Web2.0 theatre on 28th April 2009 from 16:40 hrs on “Three Dimensions of Internet Strategy”

The talk will revolve around an approach that let businesses put together a comprehensive Internet strategy order to optimize their revenues and profitability by connecting – communicating and collaborating more effectively with the stake holders of the business.

The slideshow is attached

So, do drop in. 

Regards

Abhishek

P.S.: Internet World will take place @ Earls Court in London between 28th-30th April 2009

Hello Friends,

I will be holding a FREE Website Clinic from 28-30th April at Internet World (Earl’s Court, London) at our booth.

I will be helping website owners improve their website one-step-at-a-time by giving them up to five actionable tips specific to their website after analyzing the same and understanding their online business goals.

Website Clinic is absolutely FREE of cost and there are no strings attached to it.

There will be a lot of rush as we have started getting request for booking time slots. So I suggest that you send an email to talash@indusnet.co.in and book your time slot in advance to avoid disappointment.

I recently shared few ideas with fellow IT companies about braving the downturn in a NASSCOM event.

The takeaway from the presentation was -
Stick to fundamentals. Business is simple. If we complicate it for the sake of some buzzwords, we will see more such tough days!

Here is the presentation for you:

Earlier in the day, our Industry stalwart, Mr. B. Hari did a small workshop on Wealth Dynamics (the Roger Hamilton one) and how entrepreneurs / executives should adopt the path of least resistance to succeed.

A great day out!

P.S. A few days back, I shared some random recession strategies. You might like to check them out as well.

P.P.S. Thank you Nasscom, for such a wonderful event.

There are so many people working to get a new technology out to masses – a new invention to make things better. However, in my experience I firmly believe that:

Technology is as good as its implementation.

Many a time, little imagination is put into implementation of the technology which is existing. If the existing technology is properly explored, understood and implemented in creative and innovative ways, I think it will do a lot of good to the mankind than decades of new inventions. For billions, the usage is falling behind the rate of discovery.

Let us implement the available tools and technologies properly, because poor implementation will not make any difference to the mankind and the guy next door (for the sake of simplicity).

Thoughts are welcome…

Hello Friends,

Here are some street smart strategies to survive the recession:

1) Invest in marketing. Your competitors are not doing so to save money. You shall go ahead and make the kill to get maximum leads and exposure. As we know offense is the best defense. So it is best to attack recession with your full might and try to go all out to grab the business that might be available to you. It will help you increase your market share in a shrinking market.

2) Identify deadwood inside your organization. They sneak in when you are at a high and do not care about few ‘under-performers’. However, it is easy to identify them when the going gets difficult, because they are unable to earn back their own cost to the company. Put together a system to calculate cost and revenue from each and every individual in the company.  It is difficult to do, but this is the only way you know if you have the right team or not. If a guy is not earning for you, he must be told so, given a warning and an opportunity to improve quickly. If he does not, you shall let him go.

3) Start a new business line which creates more value in the current market dynamics. It is best if your new service has the same target audience as your existing business. It will just make life simpler. To get you more bandwidth, consider closing a business, which does not excite you or seems to have a bleak future. Recession is the best time to do such transitions.

4) Partner with your clients. Deliver real results with real benefits. Calculate the benefit you have given to the client and see how you can maximize it. If your services and/or products are not delivering the value that a client expects, you need to do a serious re-think on your business model. Recession is a result of blind-mad-rush where companies forgot the basics of business and got swayed away in the glamorous world of equity, valuation, expansion, etc.

5) Sort out the internal processes and do some house-keeping. This is the only time when you are a little bit free and you can actually take care of your home in a proper way. Processes, policies, products, offerings can be reviewed, polished and realigned to take advantage of the next boom.

Feel free to add your points -

Update:
Recently my friend Arun has put together his set of tips! So why not grab them as well
http://www.arunagrawal.com/2009/02/20/recession-busting-strategies/

Friends,

I have recently written an article for SME WORLD (November 2008 – January 2009) issue of Financial Express. It should be a good read for any small business if they want to put together an Internet strategy for their business.

Internet Strategy for Small Business

Internet is making the world flatter and giving small businesses a level playing field to compete with the big players. Many businesses have changed the rules of the game by using Internet to their advantage.

Do you have a compelling Internet strategy? In simpler words, do you have a clear plan, on how you will use Internet as an enabler to create an edge for your business? If not, put one together now.

Demystifying Internet Strategy?

Every successful business needs a strategy, i.e. meticulous planning and a long term vision across all functional practices like human resource, sales, marketing, supply-chain management, etc.

Internet is a media, a platform and a network. Therefore, it is not a business function. But, it cuts across all business functions and has a profound impact on the way we do things. It has changed the way we do business.

Therefore, it is important to plan to usage of Internet across different business functions in a way that it can make the business more competitive by optimizing it’s top-line and bottom-line growth.

Every organization is unique. The way their business works is different. And therefore, their Internet strategy is bound to be different. However, a generalist approach for small business highlights three core strategic dimensions –

• Acquisition of new business
• Developing a strong online business network
• Improving efficiency in communication, and collaboration

Acquire new business

Internet is a mass media with millions of attentive people logged in. They are trying to solve a problem. And if you can solve that problem, you have a hot business lead!

Do not ignore the fact that this prospect is looking for what you offer. Therefore this is a potential pull-sale prospect. It is more valuable than hundreds of cold calls and thousands of mailers that you might invest in, expecting a single digit conversion rate.

This opportunity has its own challenges:-

• What is your prospect searching for?
• How will your prospect find you?
• What offer should you make?
• How will you convince him?
• Why will he trust you?

The entire cycle is comprised of a) Getting targeted visitors to your website, b) Convert those visitors into clients and c) Analyze results and make changes in your online customer acquisition process! (Note: A targeted visitor is one, who is looking for a product /service you offer.)

You can get the targeted visitor by using techniques like SEO (Search Engine Optimization) and SEM (Search Engine Marketing) backed by high quality content on your website.

SEO is a technique used to rank a website high on search engines on specific keywords. SEM is all about buying clicks on popular search engines. Both techniques have their pros and cons. The selection entirely depends upon the business need and the overall Internet strategy of the company.

Once you have the visitor on your website, you can further test various offers, content snippets and design elements by techniques known as A/B split testing and Multivariate testing to see which combination works best!

This is just the beginning. Some of the many things that you must consider:-

• Which keyword shall I target?
• Is it worth paying $1 per click when I am selling something worth $25 only?
• How to handle a visitor who is not interested in my product today, but might need it tomorrow?

The list can go on and on. As you can see, it is a fairly technical process; it needs expert guidance, external consultancy and implementation help.

Make new connections

Business networking is a marketing method by which business opportunities are created through networks of like-minded business people. People like to work with people within their comfort zone. So before you can talk business, you need to create a trusted relationship.

A good network is like a catalyst, which can multiply the speed of your growth. If you know the right person at the right time for the right job, you will race ahead in the competition.

When this networking is done online, it can connect you with people all over the world in a very efficient way.  You can efficiently create private and open networks where you can share opinions, ideas, problems, information, knowledge and most importantly business references! There are several online business networking websites like LinkedIn, Ecademy and Ryze.

It is important that you approach the network in the right spirit, present yourself nicely, increase your connections, work on win-win partnerships, and adhere by the pay-it-forward principle of networking.

I highly recommend that you try to strengthen your network with face-to-face meetings with as many people as possible.

Some questions that you need to answer to do this bit effectively:

• What is your elevator pitch?
• What are your goals of networking? What are you trying to achieve? Most people who are actively networking invest a lot of time, without a clear view of the desired outcome.
• What kind of people you want to connect with? Why will they like to connect with you? What is your win-win proposal for different categories of connections that you will make?
• How can you proactively help? What knowledge can you share? Which are your areas of expertise? Do the areas of expertise help you create influencers in the marketplace?

You need to do the groundwork to get the best results. So do not underestimate this part. You may need someone to help you with this.

Streamline communication and collaboration

In an increasingly dynamic business environment, proper communication and collaboration system is the key to success. Internet is a software platform that enables such system to be deployed across the organization cutting across various roles, designations and departments.

Businesses do not operate within their closed shell anymore. They have major impact from its environment consisting of employees, clients, suppliers, etc.

You need to react to changes as they happen every moment across the organizational eco-system. Therefore, the data required is real time – i.e. updated every moment.

You need to have an intranet (internal collaboration portal) or extranet (external facing collaboration portal) to keep up with the pace.

Think of some of the advantages it can bring to your business:-

• Employees can share ideas, notes and project details.
• Efficient communication with all your employees and clients.
• New employees applying online on your website to reduce time and cost in processing the job applications.
• Real time order status and inventory flow can be seen by respective customers and internal stakeholders.
• Clients have access to their ledgers in real time.
• Clients can communicate with their sales managers, place new orders and file complains / queries instantly.
• Suppliers can see tenders online and submit their quotes. The built in rule engine help you select the winning bid.
• Documents can flow within departments with remarks added on within seconds at relative ease.

Such empowerment will increase the level of productivity and satisfaction at all levels. Innovative ideas will result in paradigm shift in the way a particular work is done.

Some examples:-

• E-statements by bank save money, postage and trees.
• You can buy and reserve your air ticket / railway ticket online without standing in the queue.
• Major corporations need you to apply for a job online. Even, Barack Obama, President (elect) of the USA is recruiting his team online!
• Large corporations like BPCL have online system to receive and resolve complains from consumers.
• Online shopping is becoming the order of the day.

The way Internet can be used to increase efficiency is only restricted by your imagination.

It is a good idea to hire a consultant who can think aloud with you to find out ways, in which your business can become more productive, more efficient and stay ahead in the fiercely competitive world.

Conclusion

There is no silver bullet of Internet strategy. However, the following tips will help you define your Internet strategy and put the same into execution.

• You need to put together your organizational goals. Break them down into functional goals and map them with the three dimensions of Internet strategy.
• Rationalize and prioritize various elements of your strategy. Everything may not be feasible or even rational to execute. The cost / return analysis should be done.
• Once you have created the right mix, define your approach for every element in detail. It is a low-effort high-impact world of Internet. If success gets magnified, then so are the mistakes!
• Execute the strategy in a time bound manner. Everything changes fast and if you are caught on the slow trail, you might be doing something which does not hold value anymore.
• There is no absolute truth. Make sure that you have a mechanism for measuring the results.

How Indus Net Technologies can help?

Indus Net Technologies has been rated as #1 IT SME in India – 2008 by Dun & Bradstreet.

We help enterprises all over the world through consulting and implementation of their online strategies. We bring together 11 years of experience and implementation expertise to ensure success in your online initiatives through out its lifecycle.

Our core teams provide creative services, web application development and Internet marketing (SEO, SEM & conversion optimization) solutions. They are guided and supported by our consulting initiative.

You can be in touch with us at abhi@indusnet.co.in

I was reflecting upon last one year and how IT industry has changed in this duration from HR perspective. Among many thoughts, the most visible one (and the most concerning one as well) was the all-time-low employer-employee trust level.

One year back, we were looking into an industry where attrition was the biggest concern. Even the FAB5 (Infosys, Wipro, Satyam, HCL, Cognizant) of Indian IT industry felt the heat as employees jumped ship at the drop of a hat. It was difficult for them to understand as "What the youth want?". The HR honchos from all over India were hunting for answers even less than six months back. Employers were finding it very difficult to trust an employee. The question was – "Will he stay with me long enough to complete this project?"

And suddenly, the situation has taken a u-turn. Companies are laying off their "talent bank" for which they fought so ferociously. The guy who walks out of office today is not sure, if his job is here to stay when he reaches office the next day. The morale is at all time low. Employees are finding it difficult to trust an employer. The question is – "Will he sack me today?"

This is an environment of extremes and uncertainty. This is an environment of relationship without trust. And, this is going to worsen with every cycle on up-and-down.

So, Who is to be blame? And more importantly, how this cycle can be broken? OR, Can this be at all checked?

In my opinion,
This environment is a result of a number of social-commercial factors, like:

• Employee side:
  • Desire for overnight riches and i-want-to-retire-young mindset
  • Career objective not properly defined. (Corollary: Objective=money)
  • Peer pressure. Comparison of lifestyle. Increase in jealousy.
  • Spending more than the earning!
  • Gaining experience without gaining competence (i.e. 12 years of experience looked like 1 year of real experience repeated 12 times over! – which eventually remains 1 year of experience) 
• Employer Side:
  • Inexperienced and poor management
  • Unavailability of proper HR professionals (Hint: NOT those people who think HR = headhunting)
  • Treating employees as commodities
  • Not sticking to the basics
  • Lack of strategic insight into one’s business

Currently, the problem is in a virtuous cycle, and it is difficult to break it, since it is not based on a tangible outcome. It is purely based on emotions! And, if this cycle is not broken soon, it will intensify and re-occur more frequently.

However, it is very important to solve this problem. Otherwise, it will result in more bankruptcies, more stress, disturbed lives, social crime and poor results. To resolve this, both sides need to take corrective actions (read: be logical in their approach).

I hope, both sides get it right soon.

There is a mad rush towards online social networking space. Every second person wants to get on the bandwagon with his own social networking website with a silly-sounding name. In my opinion, most of these sites are just a fad and are not built on strong fundamentals in terms of a) revenue sources and b) the problem they solve.

What is online networking, btw?

The purpose of a social networking website is to help you keep in touch with your existing contacts and to generate more contacts! In case of social networking, the contacts are friends or prospective friends, whereas In case of business networking, the contacts are business associates or prospective business associates.

Now, answer this question – How much time and money are you willing you spend to keep in touch with your: a) friends and b) business associates. It is important to know this fact. Online market may be different, but it is closely related to offline consumer behaviour. Online business model can help in extending the product composition with new innovation and format of delivery. It is important to know if people are willing to pay for a given convinience. And if they are not willing to pay for the convinience, what alternate source of revenue do we have?

So how do you keep in touch with your friends?

In real life, you spend nothing to keep in touch with your friends. You call them up when you want to hang out with them, you give them a shout on their mobile phones or drop in to kill some time! If you are tech-savvy and love to announce a great news, you send them emails. Why will you like to send a scrap to someone (when you can simply send a short email or catch up on various instant messengers)? And why will you like to create such huge volume of personal content and share with millions of people on the Internet who are not even known to me.

Though you may have build friendship /relationship on social networking websites, they are generally not for long. And the long ones actually use the social networking as only the contact point and then evolves and flourishes offline.

What about business associates?

However, business networking sites will keep evolving, since it adds value to businesses. It help people refer / recommend a vendor or buyer to other people in a networked environment as a recommendation network. It has been very successful, when it comes to executive search and generating new business.

Again, the formal nature of relationship and privicy factor makes business networking websites a great place to get connected and exchange notes.

So, the conclusion is:

So, as on today, given the trend, I can say that social networking is a fad, which is getting saturated and is not supported by a proper revenue model. Online advertising cannot be considered a decent revenue model for a site where people come to kill time! However business networking is here to stay. Corporate intranets having social communities may stay. 

I have already written the orbituary of Facebook, My Space, Bebo and social networking platforms. These are evolving as a fad and will vapourize in the same way in years to come. I wish these trillion dollar valuations to be true, but my mind says otherwise. And I am not the only person saying this. Steve Rubel of Micro Persuation feels the same way to a great extent (may be for different reasons).

What do you think? 

The bids on AdWords are soaring to new heights everyday. Some advertisers are even shelling out up to $10 per click. So, naturally the question arises – Is this complete madness or is there any logic behind such aggressive advertising?

To me, it does make some sense to bid aggressively if you have the right strategy in place. These are two scenarios you can consider:

1) Every client you acquire, on an average spends $12000 with you in a year. In this case, you do not mind spending 10% of the revenue as customer acquisition cost. Therefore you can comfortably bid $10 per click (provided you have a site which can convert 1 out of 120 visitors). Thus, looking at a lifetime value of a customer makes it a good investment.

2) If you have mastered the art of persuasion (or have hired a master of persuasion), and have come up with a website with converts well (visitor > customer conversion), every visitor you are driving to your website is equivalent to revenue . So go ahead, rock the boat and bid out all your competitors. You will get more customers and will also have lower customer acquisition cost. What more do you want?

So, expensive keywords bidding do work, if they are backed with high lifetime customer value and/or higher conversion on the website. And yes, those Internet marketing experts are not insane! In fact most of them are very smart.

So bid smartly!

I have recently revamped my five year old venture TemplateKingdom, which has till date sold 5000+ original template designs to companies and various template sites around the world.

And so TemplateKingdom 2.0 is right here.

Come, buy the ready-made web site template that best suit your next project.

All our templates are quality checked and are designed by top-quality creative professionals (including 100+ in-house designers). You can use every template for your projects as many times as you wish. We have given special attention to make the designs user-friendly so that they can be used for practical projects.

Salient features of Template Kingdom 2.0

• Lower prices
• You can discuss specific templates and design
• Members area to download free templates as we make them available
• 80% of our template collection can be downloaded instantly (remaining 20% within 24 hours)

Many more exciting features are coming up soon:

• Tagging for ease of search
• Reseller license (so that you can resell the templates and make money). Normal licenses can be upgraded later by paying the difference.
• Active Blog with tips / resources on using the templates
• Several new types & categories of templates

So keep tuned in and if you want to join hands with TemplateKingdom, feel free to write back to me! I will love to work out JVs with enterprising entrepreneurs. I are open to ideas – so write to me.

P.S.: The site is in its BETA version, but it can take orders. If you encounter a problem, please feel free to write to us. We will be obliged.

In recent times, I have seen a growth in marketplaces which help website owners to buy/sell websites.

It looks like a good idea, as it allows website owners to reshuffle their portfolio of websites and offer services / products which are more aligned towards to their largest consumer segment (read traffic on their most popular website). Besides this, it also helps new companies to get into the business by making quick buy-outs!

I saw how I-Net Interactive bought WebhostingTalk, HotScripts, DBForums, ProgrammingTalk and several other sites to create a niche network. They further added websites on similar themes and made smaller buyouts to add value to the whole network with several relatively new sites. This does make a lot of business sense and I am sure new entrants into Internet media / technology business can learn from this.

However, I do not see any value in turnkey (me too) websites which is basically a smart design coupled with a free / low cost script being sold as a "ready to operate" business. Unless a website stands out (need not be ranked 1-2-3 in their category) with proper traffic, business model, earnings (not necessary) and a sustainable vision, one should not invest in it.

There are several parameters on which a site can be valued.

I feel the (1) profitability or potential of monetization and (2) sustainability of the revenue stream are primary ones.

I will not consider (3) existing traffic, (4) pagerank (as an extreme case), (5) branding, (6) exclusivity and/or quality of content  / service / product or (7) subscriber base to be a factor for judging the price of a website. These secondary factors can help in making a site success, but as usual the most important factor is the end result – i.e. the profitability. The secondary factors must be considered in the due diligence process to ensure that the result i.e. profitability (or potential) of the website is not fake and is based on firm grounds.

Now, the money part!

Every transaction has to be closed at a price which makes both buyer and seller win. There are several experts who recommend a 10x monthly profit factor. In my opinion it depends on a specific transaction and its strategic importance to the buyer.

Where to buy / sell?

These are some of the sites where you can buy/sell a website. I will look out for more and if I get one, I will add it to the list.

• http://www.sitepointforums.com
• http://www.websitebroker.com
• http://www.sedo.com
• http://www.dnforum.com
• http://www.daniweb.com

So happy trading websites

Offshore outsourcing – a concept that made IT & India synonmous with each other in the first decade of 21st century is loosing its glamour quotient consistently. It seems that by 2010, hundreds of software companies will run out of steam as they loose their competitiveness in the ever changing industry, since their business model has been worked around cost arbitrage alone.

Some hard facts which makes me feel so:

Increasing wages in India: Salaries are constantly moving skyward. Every year IT companies are forced to raise wages by 20-25% to remain competitive in the job market. Some hot IT destinations in India have become as expensive as Australia and Canada (if not USA and UK) in terms of manpower costs. With advent of offshore facilities of US / Europe based software companies, the trend will continue to move north.

Shortage of skilled manpower: Indian IT industry is facing a major shortage of employable skilled manpower. The education system has not gone through any fundamental improvement to fulfill the ever growing demand of the industry. Large companies are hiring semi-skilled and non-skilled professionals (not really) to fill in the positions that exists in their team. This is continually detoriating the quality and quantity of work that gets done resulting an increase in effective cost of production for the customer. At one point of time or other, this will pinch and will make offshore outsourcing non-competitive.

Appreciating rupee, depreciating dollar: With the economic upswing, the rupee is scaling new heights. On the other hand, due to economic slowdown in sight, US dollar is declining heavily. This is resulting in direct losses of revenue for most offshore outsourcing companies. There has been a 10-14% decline in revenues just because of currency appreciation. This is a net loss to the company since the effort / cost of servicing the client remains the same.

Increasing operational expenses: Cost of doing business is on a rise with zooming real estate prices, increasing fuel prices and towering living expenses. Companies are forced to spend a lot of money in the x-factor to impress prospective employees. All these put together are increasing the operational expenses and overheads for offshore outsourcing companies. In fact inflation is heading towards 10%, which is not making things better.

Companies are adpoting global-sourcing: Large enterprises in USA / Europe which were dependent on offshore outsourcing till date are now aggressively adopting global-sourcing. Many of these companies are directly setting up their software development centers in India (or a competitive location), resulting in a dent in the revenues of offshore outsourcing companies who used to serve them. The trend towards captive offshore development delivery will only increase in years to come.

New destinations: Several new offshore outsourcing destinations are coming up including China, Brazil, Ukrain, Ireland, Poland, South Africa and Russia. Many of them do not rank close to India in terms of the combo-punch of english educated, logically strong, hard working Indian IT worker. But they are making

But as it is said, when the going gets tough, the tough gets going. I am sure many companies will evolve their business models, move up the value chain and give customers more than one way to outsource to them!

Afterall the outsourcing story has just begun! 

IMHO, online candidate search is a great service. I currently use two such websites and shell out almost $5000 per annum for the same. I always do a solid cost / benefit analysis and I have found that I am saving almost $15-$20K on my recruitment cost alone.

We manage to find decent candidates. However there are few limitations that you must keep in mind:

1) Candidates you get through online database search are more prone to attrition compared to those who are through a consultant. This happens because they have an active profile online and they continue to get offers from various companies.

2) You will get quality resumes for people with experience range of 0-8 years. People who are more qualified or experienced and hold important position in companies generally do not post their resumes to such sites.

3) Verification / validation of employees who come through these sites need to be done rigorously at your end. Like every online transaction, there is a probability of fraud in terms of forged resumes.

BTW, I found a very nice concept. Please check out http://www.yellojobs.com/ to see the new model of personal reference network for hiring. Its a mix between sites like linkedin.com and pure resume database sites like monster.com and naukri.com.

Abhishek

Everyone who watches television in India must have come across the "Hari Sadu" advertisement aired by Naukri.com. This ad became very popular for its creativity and also won the award from the Advertising Club Kolkata. Here is the full story board followed by the video of the ad.

There has been a lot of controversy around the advertisement by two set of people:

1. Whose first name is "Hari"
2. By a group of people who caused objection since "Hari" also refers to a deity in Hindu mythology

Naukri.com decided not to withdraw this advertisement citing that this is a work of fiction and they got a clean-chit from Advertising Standards Council of India.

This advertisement is really humorous and can be a great way to advertise a job site. In fact they managed to create a character – Hari Sadu, who can be recognized with the Naukri.com brand.

On the other hand, I find the ad to be in a very poor taste, showing bosses in very poor light who should be insulted and abused when opportunity strikes. This is teaching people to consider boss (or a business owner) as a blood-sucking beast, an idiot and an inhuman being. This is definitely not true in most of the cases. Above all, it shows that – when you don’t need someone, have a go at him – and walk out of the door!

In a growing economy like India, where attrition is sky high, job ethics are hard to spot and consideration for one’s job responsibility is at an all time low, this ad has only added fuel to the fire.

I know, Naukri.com has got superb mileage from this ad and it is close to heart of thousands of people. However, the question remains – Is this ad instilling the right culture? As a corporate, does Naukri.com understand it’s responsibility to communicate the right culture to the people who are destined to shape the future of this economy – the young executives.

Business organizations can never be in equilibrium or achieve stable position. Either they are moving up or they are moving down, depending upon their innovation quotient. 

If you are trying to keep things stable, they won’t remain so. You will slowly slide down simply because:

• there is no exclusivity,
• competition will catch up on the technology front and -
  • either cut price – if they too are not innovating (resulting in your margins to shrink)
  • or innovate and better the product – if they want to add value to the product and move up the value chain (resulting in your market share to shrink)

And if you continuously innovate and apply new ideas (refer to my post on manufacturing ideas), you will continue to move up.

It is unfortunate that in some cases, the entire industry decides to stabilize their position and take customer wants for granted. For example, consider:

• radio manufacturers,
• alarm clock manufacturers,
• camera manufacturers (there are some really big names out there)

They decided to stay at their position and were swept away by mobile companies like Nokia (who is the largest digital camera manufacturer in the world today). They decided to experiment and give more to their customers by integrating digital camera in mobile phones (possibly the thought process was that mobile, camera, clock, alarm are all things that need to be handy). It took some time to gather market acceptance which was created by the initial hype, but later on sustained due to the instant-in-the-hand value of the additional gadgets.

Seth Godin has highlighted how alarm clock manufacturers can still make a small change in their product and make it stand out. These are simple improvements which can make a product stand out and desirable!

Are you moving up or moving down?

Divya Narendra and his two other Harvard friends (Cameron and Tyler Winklevoss) have sued Facebook alleging that their founder, Mark Zuckerberg have stolen their business plan and source code. You can read the full story at rediff.com.

I was wondering if this is the case, why they didn’t cried foul earlier.

In fact I doubt that Facebook has become so popular and valuable (not sure) because of the business plan and source code that was stolen (if at all it was stolen). In my experience business plan is just a starting point and then everything keeps changing and you have to adopt according to the situation. Above all ideas do not matter, execution does. Mark has executed the idea well and he deserves what he has achieved.

Anyways, it will be interesting to see the outcome of the lawsuit. Divya has almost nothing to loose, but everything to gain. He just might be able to make the kill. But I see very little probability of the same.

It all started with pixels. Alex Tew started selling pixels with milliondollarhomepage.com to earn some quick money. Public relation clicked and he became a success story with a wild frenzy among people to own a "piece of history". The "me too" crowd followed and we saw thousands of similar sites selling priceless pixels and few smart companies selling scripts to build such sites.

After one year came Joel Comm, who improvised the concept to link words instead of pixels, and launched 500words.com. This innovation was expected from an Internet marketing wizard like Joel, who is well known among Internet marketers and has a capacity to create a loud buzz. He sold the entire inventory and laughed his way to his bank with few hundred thousand dollars! Just like milliondollarhomepage.com, this improvisation triggered hundreds of similar website and scripts that can be installed to launch similar sites. In fact, I also launched software called wordsitebuilder with my friend Arun Agrawal, because I believe in selling spades when the gold rush is on.

Now, exactly after one year of the 500words.com gold rush, I came across another concept – Wordhugger.com & MillionDollarWiki. Now they have logically extended the legacy and moved on from words to a page dedicated to a given word / phrase. They have presented the concept in a much more lucrative way for prospective buyers. I was just wondering how is this different from squidoo.com? This seems to be picking up and I am watching the show .

So, overall, there has been a gradual transition from a pixel >> word >> page What’s next? – A website / or a blog?

Let’s watch the show!

I have noticed that several companies offer joining bonus to a prospective employee to join early (or shall I say "immediately").

I was wondering if this is a right tradition? Is this ethical?

I see it this way –

A guy is working in Company A and he has a notice period of 30 days. if he wishes to terminate his contract/job with Company A and move to Company B he need to serve a notice period of 30 days to Company A. This is supposedly required so that he can transfer his responsibilities in a proper way to an assigned person by Company A enabling them to maintain the smooth function of the organization in his absence. However, Company B tells the guy – "If you can join us within 7 days, we are willing to pay you a joining bonus of $X.

I personally feel that it is like bribing the person to go against the separation clause of the employment agreement, so that he can pay for any financial loss (that might arise from any penalty clause) and enjoy a bonus amount – all for doing something wrong! I see this happening almost everyday.

Don’t you think this HR practice is unethical and is further rewarding people to stoop low for some quick bucks?

What do you say?

Reliance’s BigAdda, Rediff’s iShare and Naurki’s Brijj.com are the latest dotcoms to hit the Indian social networking marketplace. It may trigger the next dotcom explosion with many more mindless dotcoms in line with these me-too networking sites by public listed biggies of India. Soon, we will forget why the first dotcom boom wave came down crashing after showing colorful dreams to thousands of tech-entrepreneurs worldwide.

I will personally advise new startups to keep away from such me-too type projects unless they have a solid niche, a risk-managed business model and a proper revenue model.

In fact, I am not at all optimistic about success of any of these new ventures unless they offer a great reason to be a part of it. The market place is already saturated and people are finding it difficult to manage their multiple social networking accounts and commitments. Besides, most of these sites do not offer any value addition apart from entertainment. Gautam Ghosh, an avid blogger shares a simmilar view on the subject.

If I have to select a possible winner among these biggies, I will go for brijj.com, which can take a turn towards the business model adopted by yellowjobs.com of NDTV. Another reason for possible success of brijj.com is that it is designed to be a business networking portal. It offers you a reason to spend time and have a clearly marked revenue model. In comparison other sites, just like their global originals heavily depend upon a speculative value creation and are looking for a buy-out similar to youtube.com which will make them rich overnight.

Do check out how many times people are referring to "Internet advertising" as their business model for their social networking website. It is not that Internet advertising is not BIG business. But it will just not work for social media websites in long term. And it is a foolishness to bet on Internet advertising as a revenue channel. We know it from the Y2K dotcom meltdown. In fact I can see the same madness as Y2K. We are not yet there, but we know it can peak very quickly  

Do you think these sites will bloom?