November 25, 2008 Chennai
On a damp Tuesday morning, photographer Keshav Raj and I are in the hallowed film studios of AVM—not to watch a filmshoot, but to attend a business plan competition being organised by Loyola Institute of Business Administration along with The Indus Entrepreneurs (TiE), Chennai Chapter, and venture capital fund IDG Ventures.
Sripad V. Rao and Sandeep C. Senan/ Entrepreneurs/Bangalore
Business idea: Developed a binary intelligenthardware that can act as a‘brain’ in a toy/ inanimate objectand is also easy to program.
VCs’verdict: If the recession-proof educa-tion sector is smartly targeted,it has immense potential.
Of the 200 odd business ideas sent from all across the country, the institute has handpicked 10 for the final round. At stake is angel funding from TiE and as much as $500,000 in the form of fund infusion from IDG.
The contest is a deviation from the regular B-school business plan competitions. It’s also open to outsiders with one condition: you need to have an enterprise and should be looking for funding beyond the seed stage. At the day-long event, it becomes apparent that if the dotcom boom had many entrepreneurs who only had ideas and no business plans, eight years down the line, models for execution have definitely improved and they are not pureplay Internet ideas either.
Sandeep Senan, a 25-year-old techie from Bangalore, is among the chosen entrepreneurs and has landed up in Chennai with an idea centred on technology and education. He has developed a Binary Intelligent Box or Bi-Box, which doubles up as a robotic brain when connected to anything inanimate. His target segment is young children. The robotic device, Bi-Box, has the potential to make even defunct or broken toys come alive. For this, the child will have to draw a flow chart in his computer, using some very simple guiding tools that would ‘program’ the toy to do his bidding. The flow chart will be the ‘creative’ application of the child with delightful results, Senan promises.
Anuj Gupta/ BIMTECH/ Greater Noida
Business idea: To set up a dual stem cellbank—private and public.Stem cells can be taken fromthe bank by the donor if hehas banked it privately; otherscan avail the public bank.
VCs' verdict: Regulatory aspects to be studied.
The idea is bang on in innovation and technology, but falls short on entrepreneurship. The jury of venture capitalists advises Senan to come back with a revised project plan. Ranjith Menon, Investment Advisor, IDG Ventures, eggs on Senan’s idea, saying: “Education is a recession-proof sector and the Bi-Box looks very promising. It is just that the potential is hugely understated.”
Next, we meet up with online tuition player 2tion.com’s G. Sujai from Chennai, who has worked briefly as an education consultant in Dubai. His busibt ness basics seem sound. Sujai has devised a revenue model that stays live on subscription collected from enrolling tutors. The tutors, in return, are given an interactive whiteboard facility on the site. Students can choose tutors based on their profile. Thereafter, Sujai and his team do not interfere in the pricing transactions between the two parties.
Sujai runs into a glitch with the VCs. Says J. Murugavel, Founder and CEO of Consim Info (better known for his website Bharatmatrimony.com): “2tion.com is a good idea, but loses out because it does not have team strength, even though it did appear strong on implementation.”
Undeterred, Sujai says, “With the money made from this enterprise, I want to set up browsing centres across India, charging one rupee for 10 minutes, using cloud computing. Even entrepreneurship should have a social cause."Crusaders Inc
Finally, the team that wins the cash award of Rs 1 lakh does just that. The Chennaibased team that includes D. Balaji, Kumar Loganathan and Hariprashanth Elangovan has developed an economical prosthetic arm. The team has created the internal circuitry of the arm, which imparts electro-mechanical signals to and from the brain to make the arm functional. The outer casing needs to be customised and outsourced.
Surya Narayan Lenka/ Entrepreneur/ Kanpur
Business idea: Developed a technology thatwould reduce the ash contentin coal; to set up a plant inBokaro, close to steel plants.
VCs’Verdict: It will provide the bandwidthneeded to set up management team.
The cost of the arm along with the outer casting comes to around Rs 33,000, much lower than Rs 2 lakh-plus that the imported substitutes cost. While the presentation does not look at scalability, and has drawbacks in terms of material sourcing for the outer casing, IDG’s Menon says: “I sit on the board of a medical devices company and think this project has immense possibilities. The team needs proper mentoring from a material sciences person and funds to source this, but we plan to help out on this.”
The other idea that notches up the Rs 1 lakh cash award is “Clean Coal Solutions—Commercial production of Special Chemical for Coal beneficiation Process”. If he gets the funds, entrepreneur Surya Narayan Lenka will set up a facility in Bokaro, close to the steel plants. His technological innovation reduces the ash content in coal substantially.
D. Balaji and Kumar Loganathan/Entrepreneurs/ Chennai
Business idea: Developed the circuitry for aprosthetic arm; circuitry partscan also be sold as spares toPCB manufacturers/ users.
VCs’Verdict: Great potential in India; bettermaterials can be sourced forthe outer casing.
Lenka candidly admits that though he has the technical capability and understands the market potential (including challenges to his business), he does not know the nitty-gritties of setting up an enterprise, and running the outfit. “I definitely need guidance on management aspects,” he says.Work in progress
The team from Birla Institute of Management Technology, Greater Noida, is gung-ho about setting up a stem cell facility. Team member Anuj Gupta says that his business plan looks at both public and private stem cell banking and if implemented, it will be the first project of its kind in India.
“Initially, we would need Rs 3 crore and then, could scale up,” he tells me as I look on incredulously. How will the team be able to set up cryogenic facilities to store the stem cells, particularly on the scale that he is talking about, I ask him. “Some hospitals will help us in this,” he says, adding, “I don’t want to divulge my marketing plans and stem cell collection ideas.” The team walks away with the runners-up award.
The team from IIM Ahmedabad has set its sights on affordable art. The idea is to set up an online facility, which will prominently feature lesser known and fresh artists with a low-price tag. “We hope to make at least Rs 65 lakh in five years,” says Prateek Agarwal. The business will take time to scale up, I am told.
VCs see a lot of possibilities in the business ideas of these young contestants. R. Ramaraj, Co-Founder and ex-CEO of Sify, who now heads Chennai Chapter of TiE, says: “Some of the ideas were innovative in a new segment, some innovative in a tried environment and some like the stem cell project did not discuss the regulatory aspects. We find a definite lack of mentoring. But if guided well, most of these ideas have great potential.”
While the ideas of these entrepreneurs varied wildly, most shared a couple of traits: They had passion, which had taken them this far and they had innovation. In the end, IDG’s kitty of $500,000 remained almost intact not for want of business ideas, but because these innovators lacked entrepreneurial training. Undeniably, they got their ideas across.