mobile phones and Internet to IT-enable the delivery of consumer services. Unlike in the U.S., angel funding is limited, but that is changing, with funds being set up by the previous generation of successful IT entrepreneurs. VC firms tend to be much more conservative than in the U.S., and they rarely invest in companies that have yet to deliver a few million dollars in revenue. This means that successful product companies are still relatively rare. Among Indian cities, Pune has generally always had more home-grown entrepreneurial companies. As a result, even in the product space, it is among the top two to three centers of innovation in the country.
Entrepreneurship in Houston, TX
Sudhendra Seshachala has recently launched the beta product for Xervmon, an integrated cloud console/framework that delivers actionable insights on users’ cloud/SaaS accounts.
Xervmon is based in Houston, Texas, with development centers in Houston, India, and Russia. The product is funded by Hooduku, Sudhi’s professional services business, which generates more than $250,000 annually.
Departing from Silicon Valley’s conventional wisdom, we have encouraged Sudhi to bootstrap his product using his services business, which is already flowing nicely.
In fact, many 1M/1M companies are going against the conventional wisdom to “abandon everything else and focus on one product” and adopt the tried and true method of “bootstrapping using services.” In truth, many great Silicon Valley companies (including Oracle) followed this path.
Sudhi of course, misses the meet-ups and incubators that Silicon Valley offers, but he certainly doesn’t miss the Valley’s cost structure.
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As you see, while entrepreneurs are learning from the Valley’s traditional methods, in some cases they are also going against it and inventing their own rules of success.
One complaint you will find, wherever you go, is about the lack of seed capital outside Silicon Valley. A bad habit that entrepreneurs all around the globe are picking up is the mindless quest for capital.
Capital, not customers. And I seriously object to it!
In fact, Vikrant Mathur, right here in the Valley, is going against this trend and focusing on profitability rather than raising capital.
Vikrant’s company ifood.tv is a multi-platform video channel for food- and cooking-related content. It started off as a website in 2007 but has quickly embraced mobile and connected TV platforms to provide content to users through the device of their choice. It currently serves more than 4.5 million unique visitors on its website, and its mobile and connected TV apps have been downloaded close to 500,000 times.
Vikrant observes, “As the cost of starting a tech (mobile/consumer Web) company continues to plummet, raising money continues to become difficult. VCs have a lot more options, so they require a company to show a lot more traction. ”
He adds, “The Valley puts a lot of emphasis on raising venture capital, but we have really stayed away from that philosophy. Our focus has always been to keep our costs low, keep the company profitable, reinvest the profits back in to the business, and grow organically as much as we can.”
Hallelujah!
