Connect with your passion

In a previous post, I went through a scenario to show why many job seekers and hiring managers end up with poor outcomes. In fact there is data to suggest that this is widely true. Online recruiting typically results in an 11% yield - a classic outcome of the scattershot approach to finding the right opportunity and the right candidate. And even if placements rates were higher, there is very little information about placement success - i.e. the longevity and performance of the candidate in the position post-hire. Did they like their job? Were they successful?

Here's what I think the missing link is: job requirements have become harder to state explicitly while job matching techniques have remained stuck in the "keyword matching" phase. Job requirements have become more subjective for a number of reasons, among them increased globalization, an emphasis on collaboration, individual empowerment and hands-off management styles. Job matching still largely consists of keywords searches on online databases, or quickly reading through a resume (which also amounts to a keyword search).

What's needed is for matching techniques to catch up to the increased complexity of job requirements. Can you really communicate in a resume or a set of keywords what you really want to be, what excites you, what your hopes and dreams are? We need a way to connect people with their passion. I recently met a talented entrepreneur - Siamak Salimpour - who is trying to do exactly that at CareerSpice. In some ways, CareerSpice is attempting to do for the job placement market what eHarmony claimed to do for the personals market - i.e. a better job of matching people based on a much deeper analysis of the relevant attributes. He's still in the early stages of his product launch, but I wish him every success - we need more ways of connecting people to what they really want to do.

Enterprise Software: Feeding Frenzy Continues

Yesterday Symantec (NASDAQ: SYMC) bought Altiris (NASDAQ:ATRS) for $830 million. Today shares in BusinessObjects (NASDAQ:BOBJ) rose on rumors of a takeover bid by Oracle (NASDAQ:ORCL). Looks like 2007 is off to a roaring start as consolidation in the enterprise software market continues after a record 2006.

Jumping through hoops

Imagine this scenario.....

Hiring Manager
You are looking to hire a candidate, and you know exactly the sort of person you want: skills, experience, "fit" etc. You post the job online, contact recruiters, get the word out, and the resumes start rolling in. In short order, you start the interview process - you're off to a flying start,

A month has now gone by since you started your search. You've interviewed 15 people for the position so far, and you haven't been happy with any of them. For some reason, the background information you got - resume, call with recruiter - looked great on paper but didn't translate into the right candidate. For a technical role, these ineffable qualities might include problem solving ability and the desire to take on challenging tasks. For a marketing role it might include comfort with public speaking and an engaging style of interaction.


What happens next? Invariably, consciously or not, you start lowering your expectations. Your point of reference becomes the last five interview candidates, not your original idea of what you were looking for. The next person that comes along to exceed this lower bar gets the job. They may not be the superstar you had in mind, but they'll probably do an OK job, and you don't have to deal with the hiring process anymore.


Job Seeker
You're stagnating at your job, not being challenged, and you decide its time for a change. You submit your resume to a couple job boards, contact a few recruiters, and sit back and wait for interview calls. You're pretty clear about what you want - the money should be better than your current position, but most of all, you're looking for an intellectual challenge; an interesting problem to solve.

A couple of weeks go by - you've had a bunch of interviews (it is a hot market after all), and you're getting a bit tired of the process. A couple of them didn't go so well - they were looking for someone to work with an offshore team in India, and you didn't relish the idea of a lot of late night phone calls, or you came across an arrogant interviewer who gave you his favorite brain teaser and you weren't able to solve it on the spot, ensuring you wouldn't be called back (you would ordinarily have solved it - it just wasn't your day). You do end up getting a couple of offers, but you're not that excited about them - the pay is only marginally better than your current salary, and the work just doesn't seem that interesting. In fact, your current position doesn't look so bad after all.

Finally, you get tired of the whole process. It wears you out. Consciously or not, you lower your expectations. Your point of reference becomes your current job, not the ideal you had in mind when you started out. You pick the first job that exceeds your lowered expectations.


Does this resonate? Share your stories. This is "HR week" at Developing Innovation. I will look into why the scenarios described in this post happen so often (and there's evidence to suggest that it does) even in a bull market, and what can be done to change it. Please share your thoughts.

The war for talent

If you've followed the labor market in India, you probably know that it's a red-hot market for job seekers. This is not a new phenomenon - this BusinessWeek article from 2005 talks about the issue - but it has taken on an added urgency as the shortage becomes increasingly acute. There's a huge scarcity of people with the required technical or managerial skills to fill the positions that the fast-growing knowledge industries require.. Attrition rates are high, wage inflation is sky-rocketing and poaching by rival firms is a full contact sport.

At the macro level, the only solution is to increase the supply of qualified workers. Everyone understands this, and the education sector is booming as a result of this. At the micro level, companies (at least large ones) will increasingly shoulder the burden themselves. Some already do: Infosys runs what is probably the world's largest and most sophisticated training operation. Other companies are looking to follow suit. However, attrition rates are still high at Infosys (many hires leave after their training period).

I've been involved in the dynamic first-hand. Based on what I've seen, here are three recommendations I would make to alleviate the problem, at least at the micro level.

• Select for fit. This is as much a mis-allocation problem as a supply and demand problem. What I mean is that prospective employees often don't look at "soft" but important factors such as the work environment, the dynamics of their future team etc, when making their decision. The decision is usually based on compensation and, in some engineering positions, on the programming tools used and the complexity of the problem to be solved. This is a myopic view, and can often result in dissatisfied employees that are a poor fit in the new organization. Company recruiters do not focus on the "fit" either, and hire based on skills and experience, with the same result.
• Use better recruiting metrics. Today recruiters are often able to measure "yield" - the number of hires made from a specific source, so that they can focus their efforts on the highest yielding sources. However, in an environment where attrition rates are so high, yield is not enough. Recruiters should track the progress of personnel, and add a "longevity" metric to their "yield" metrics. Better yet, try and isolate those characteristics that describe the employees that end up staying longer. Select for those characteristics, and focus on those sources that provide the most people with them. Reinforce success.
  
• Build recruiting feedback loop. In addition to isolating those characteristics that tend to be associated with success at the company, find those that don't. When people leave the company, follow a standardized exit interview process and collect the data in a form that can be analyzed (the advantage of high attrition: you'll have a lot of data!). Isolate patterns to try and determine retrospectively what could have been done differently. If there is a consistent "fit" problem, start screening for those characteristics during the interview process. If there is a consistent "dissatisfaction" problem, try and remedy it by either adjusting expectations during the recruiting process, or by changing the company's practices.
  

India is not the only country facing this problem. Its a global war for talent, and fast-growing emerging economies are the vanguard. How India and other developing economies tackle this problem will provide valuable insight to the rest of the world in how to manage and nurture talent.

India Startup Tracker: The Wisdom of Crowds

As someone who follows the goings-on in the Indian start-up world, I'm finding it increasingly difficult to keep up with all the activity in this area. This is great! That's a good problem to have. In an attempt to keep track of it all, I've decided to start tracking companies, investments and exits in a spreadsheet. No big deal, you say. True, but wait - there's a twist. The spreadsheet is online and I'd like to make it available for everyone to update. Like a good software design, let's parallelize to scale up. You can view the spreadsheet here. The spreadsheet has two worksheets:

• Silicon Valley 2.0: List of Indian start-ups, and funding details, if applicable.
• Wall Street 2.0: List of M&A activity and IPO's in the start-up world.
  

I'm open to changing the names - please send me suggestions! I will continue to work on it; I hope that if we all keep this updated collaboratively, we'll have the best, most up-to-date source of information available in any one place.

Some ground rules, and a mini FAQ below.

Ground rules

• Restrict the list to start-ups: This is meant as a listing of start-up companies, not larger companies getting funded by late-stage private equity. What's the exact definition of a start-up? There isn't one - use your judgment.
• When listing funding details, please provide a source. And it goes without saying that the spreadsheet should only contain publicly available information.

Other than that, let's build this together and see what develops.

FAQ

Q: How do I edit the spreadsheet?
A: Send me an email at: rahul [dot] roychowdhury [at] gmail [dot] com and I will give you permission to edit the spreadsheet.

Q: Why use Google Spreadsheets rather than a wiki?
A: Good question, and its something I thought about. Wikis generally provide better collaboration than Google Spreadsheets currently does. On the other hand, having the information in tabular form will allow some interesting trend analysis and summary displays once the data set gets large enough. And even if Google Spreadsheets doesn't currently provide charting and analysis tools (#1 on my Google wish list!) you can always download the data to Excel and do the analysis. In general, I think this capability outweighs other considerations.

Q: The format looks pretty awful. Can I change it?
A: By all means.

Proto.in: Showcasing startups in India

Proto.in, the Indian equivalent to the DEMO conference in the US, took place last weekend in Chennai, India. Blogger tggokul provides a good summary and Swaroop gives his thoughts on the companies presenting. The complete list of participating companies is available from the proto.in website.

Enterprise software in flux

The world of enterprise software is fundamentally changing. This is not the enterprise software market of old with its bloatware, n-year implementations, painful upgrade cycles, fragile interfaces and ROI analyses that can charitably be described as "aspirational". Just look at two news releases today:

• First, SAP announces a hosted solution for the middle market. This in the face of a negative market reaction to their mid-market foray due to increased customer acquisition costs and lower margins.

• Then, hot on the heels of IBM's announcement yesterday, Oracle announced WebCenter Suite - its own Web 2.0 offering. A great example of "me-too" press, although Oracle had actually first talked about this product a few months ago and failed to capitalize on it.
  

I don't recall a time when there was this much uncertainty in the enterprise software market. The large vendors are scrambling to accommodate entirely new areas of functionality (collaboration, participation) that are antithetical to today's centralized way of providing IT-enabled value. At the same time, the delivery models have shifted to subscription-based, hosted services. The big players are struggling to keep up while not abandoning their current , highly profitable, product franchises.

All this means there's a huge opportunity to innovate in enterprise software. And the place to start is in fast-growing but still-developing countries with a need for IT, but under served by the large global players. The need is acute, the new delivery models match well with the lower capital expense outlays common in these countries, and there is no legacy to overcome. Just like the old order is slowly turning over in consumer software, there is no reason to believe that today's dominant providers of business solutions will be dominant tomorrow.

Davos Update: Sunil Mittal on the "Shifting Power Equation"

Sunil Mittal, CEO of Bharti Telecom (large mobile operator in India) speaks about the power of emerging marketings in Asia and Eastern Europe.

India Everywhere?

It's that time of year again. As we speak, the rich and powerful of the world have gathered together in the beautiful Swiss town of Davos for the 2007 World Economic Forum. (For more info, check out the New York Times Davos blog). This got me thinking about the last Davos conference.

Last year, India was the topic du jour. The marketing/branding team at the India Brand Equity Foundation did a spectacular job at grabbing people's attention with their India Everywhere campaign. The press were all over it (see here, here and here). Nandan Nilekani, CEO of Infosys was even blogging from Davos.

So what happened this year? I saw no media coverage, no India marketing campaign at all. Was I missing something. As it happens, I wasn't. It turns out, after some investigation, that there is no campaign this year. This year is all about participation without the glitz. More delegates, more meetings, and less buzz.

I found this rather dry and tactful comment from Peter Torreele, Managing Director of the World Economic Forum, instructive:

The feedback from the participants was that it was extremely well-done, because it was business driven. There is need for follow-through and this has to come from Indian CEOs taking a clear place at the plenary discussions and have to be seen to be part of the global discussions. If India wants to be seen as part of an upcoming global economic power, then it has to play its role globally.

In other words, if 2006 was about marketing, 2007 is about execution. Like an entrepreneurial venture.

Big Blue Gets Hip

IBM just announced its entrance into the world of Web 2.0 with the release of Lotus Connections , announced yesterday at Lotusphere. They're calling this category social software for business and it includes collaboration tools such as user profiles and connections, blogging, shared bookmarks, online communities, shared workspaces, search and tagging.

Clearest indications that Big Blue is getting hip to the ways of Web 2.0:

• IBM has a virtual marketing booth for Lotusphere in Second Life (launching today).
• They're following the "-kr or -zr endings are cool" philosophy by naming a content repository product Lotus Quickr.

It's getting a lot of press coverage, including ZDNet and BusinessWeek. The always interesting John Paczkowski of Good Morning Silicon Valley blogs about it here.

This is being billed as an IBM vs Microsoft battle, but the IBM offering seems at first glance a much stronger contender to bring collaboration to the enterprise than Microsoft's SharePoint 2007. Watch this space!

Chicken or Egg?

The Economic Times of India has a debate about whether or not India is ready to produce great software product companies. The arguments are interesting on both sides, though not particularly new. On the pro side, the writer brings up the development of an eco-system of VC's, the social acceptance of entrepreneurship and the emergence of a domestic market. The con argument talks about the lack of skills and product knowledge.

The basic issue is one that is not mentioned in the article but is an implicit assumption on both sides. This is the issue of demand. Supply issues such as social acceptance, available funding etc, are not the bottleneck - demand is. If India grows a large domestic IT market, Indian product companies will thrive. If not, they won't. Necessity, as they say, is the mother of invention: a demand-side argument if there ever was one!

The underlying cause of disagreement in the article is really about how large the Indian market will be. The pro side says big, the con side says, not quite yet. That's the real question that needs to be analyzed and debated.

I've been surprised to see very little emphasis in the media and the blogosphere on this question. Mobile phone adoption rates are well-known, and there is some information available on internet usage in India, although sometimes the numbers should be taken with a grain of salt. Enterprise demand in India is not even discussed at all. Time to change the debate from supply to demand!

Enterprise Mashups

Great post by Dion Hinchcliffe on enterprise mashups. Unlike consumer mashups, there is no monetization issue. The tools are getting simple enough to allow non-IT staff to build their own. More grist for the mill for The End of IT....

Take Web 2.0, add a dash of mobile and mix well

That seems to be the recipe followed by many Indian Web 2.0 start-ups. There is a good overview article in the Telegraph, a newspaper in Kolkata.

Looking at the current crop of Web 2.0 startups in India, I see the following general pattern.

1. Pick an existing product category in the US, whether social networking, local content aggregation or peer to peer file sharing.
2. Add an India "lens". The India lens can be in the form of context (pick generalized functionality and adapt to Indian context) or content (generalized functionality but locally generated content).
   

Examples of the various ways in which Indian start-ups have applied the India "lens" include:

• Local Context: Guruji.com, the Indian search engine. General-purpose search engine with an India filter built in.
  
• Local Content: Pixrat.com, the Indian Flickr and indialistings.com, an Indian classified ad site. Nothing is particular to India in the platform, but the content is local.

It seems to be that the vast majority of Indian web 2.0 start-ups are applying the content lens, with no real innovation in the context yet. However, that's precisely where the opportunity for product innovation lies - in adapting to the Indian context. I look forward to seeing more of that coming from the bright and driven entrpreneurs profiled in the Telepgraph article. What's the biggest opportunity in the Indian context? Clearly, mobile. There is already a ton of innovation in mobile, on the technology front (e.g. BubbleMotion, which allows voice SMS). Cloning Flickr, Orkut et al is not a sustainable strategy. Innovative mobile functionality added to existing Web 2.0 businesses is where the real opportunity lies for Indian consumer internet companies.

Flips and leapfrogs: Evaluating new technologies

Harvard Business School professor Andrew McAfee has a thought-provoking post, A Technology Flip Test, in which he discusses a useful new framework for evaluating technology. Imagine a world in which the new emerging technology trend (e.g. software as a service) is actually the incumbent technology. Would the current incumbent technology (e.g. traditional enterprise software) make inroads against it? Seems to me that is a useful construct for evaluating technology trends in general, and for leapfrogging trends in particular.

The end of IT?

I was struck by two articles I read recently. The first was this little nugget from the more comprehensive survey conducted annually by the good people at CIO Magazine:

The average CIO makes $23,562 less in real dollars today than five years ago.

The average salary for CIO's at large companies is still almost $300,000, so I'm not shedding any tears. Still, these numbers are certainly on a trajectory that suggests that the IT department is becoming less, not more, important, to the businesses they serve. Notice that I said "the IT department" not IT itself. The importance of IT is not in question here, its how it is delivered and accessed that is the issue. Which brings me to the second article. This article, subtitled "Consumer technologies are invading corporate computing" (subscription required) appeared in the last issue of the Economist magazine. It talks about business users taking more control of their productivity tools, from IM and VoIP to Email and Calendaring. If the IT department is not on board, they are simply bypassed by their users. The article mentions Adrian Sennier, CIO at Arizona State University, who recently moved the entire university to a productivity bundle from Google called Google Apps for your Domain. The article goes on to say:

For Mr Sannier, however, a bigger reason than money for switching from traditional software to web-based alternatives has to do with the pace and trajectory of technological change. Using the new Google service, for instance, students can share calendars, which they could not easily do before. Soon Google will integrate its online word processor and spreadsheet software into the service, so that students and teachers can share coursework. Eventually, Google may add blogs and wikis—it has bought firms with these technologies. Mr Sannier says it is “absolutely inconceivable” that he and his staff could roll out improvements at this speed in the traditional way—by buying software and installing it on the university's own computers.

Is this the end of IT as we know it? Software as a service, empowered users, tools to allow encoding of business rules and workflows by non-technical users - what will this mean for the IT department of tomorrow? Or, for that matter, to the legions of IT consultants (whether onsite or offshore) who assist them?

Google Checkout for Mobile?

Picking up where the last post left off, the ideal market for mobile payment systems should have three characteristics:

• Rapidly rising income levels (demand is high)
  
• Small internet footprint, and even smaller e-commerce footprint (supply is low)
  
• Large mobile penetration (potential is large)
  

Countries like India and Brazil provide great markets to test products before moving them more broadly to other markets.

The basic requirements for mobile payments systems include:

• Ease of use. No-hassle account setup and configuration.
• Wide device support. In developing economies this means not required data-enabled phones to provide the service.
  
• Built-in security. Specially important if service is provided on non-data-enabled phones.
• Flexible payment options. This includes support for different credit/debit cards, links to bank accounts and stored value (pre-paid) options.
• Localization. Gaining wide user adoption will require localization features, including language support and tie-ins to local payment processing (regional banks, microcredit organizations).
• Leverage existing infrastructure. Critical to building a large merchant base quickly is to make it as easy as possible for them to accept the new payment form factor using their existing technology investments, where possible.
  

The key shift is to use mobile payments as a "leapfrog" technology rather than a substitute technology. In other words, move the market from online last-click replacement to physical store retailing, or TV-based retailing.

There are two small entrants into the market, recently VC-funded, that I'm aware of:

• Paymate: Kleiner Perkins invested $5M. Broad device coverage (works on SMS), but only for Citibank customers.

• Ji Grahak: Helion Ventures invested $2M. Broad financial institution coverage, but requires a credit card and requires a GPRS java-enabled phone.

How far off do you think Google Checkout for Mobile is? And where do you think they will launch?

Mobile Payments: Where's the opportunity?

There's been a lot of buzz at the Consumer Electronics Show in Las Vegas this week about mobile payment systems. See here and here for product announcements. Let's take a step back and look at two different, but related, questions:

• How important is a mobile payments solution to you, the consumer?
• What are the requirements for an effective solution.

First, how important is the problem? Let's look at this question in terms of supply and demand. If you live in a part of the world that has a large base of sophisticated consumers, demand for a solution is high. If you live in a part of the world in which the payment infrastructure is already quite sophisticated, then good quality supply is also likely to be high. When demand is matched with good quality supply, then the bar for a solution will be correspondingly high (factoring in switching costs). In the US, this explains the lack of take-up with mobile payment solutions. The problem that mobile payment providers are trying to solve in the US is really not a major pain point for most consumers. The low hanging fruit is clearly where high demand is not matched with enough high-quality supply. This is precisely the definition of an developing economy that has developed a large mobile subscriber base (which happens quickly) but does not yet have an efficient payment processing infrastructure (which happens slowly).

What does this mean for entrepreneurs? In my view, it means that if you have a mobile payments solution, you need to enter the market where the need is greatest. No matter where you are located, you will need to enter emerging markets like India, Brazil, South Africa and others. Build a product that meets the needs of those consumers and learn how to build a successful mobile payments product that gains wide distribution. Once you can successfully do that, the offering will be of sufficiently high quality to surpass the switching cost hurdle in more mature markets like the US. At that point, you're ready to market your payments solution in these markets. But you have to start with the consumer who does not have alternatives today, otherwise you'll be struggling to jump over the high (and still unknown) switching cost hurdle.

Indian Demographics

I recently came across a statistic that astounded me: the median age in India is 27. In fact, 75% of the population is younger than 35 today. Is anyone else surprised at how incredibly *young* Indians are?

Thinking about the ramifications of this reminded me of the famous BRIC report released by Goldman Sachs in 2003. If you're not familiar with it, BRIC is Brazil, Russia, India and China, which represent the largest emerging economies in the world today. The report caused quite a stir when it was released because of these predictions:

• In less than 40 years, the BRICs economies together could be larger than theG6 in US dollar terms. (They were worth less than 15% in 2003).

• Of the current G6, only the US and Japan may be among the six largest economies in US dollar terms in 2050.

The graph below neatly shows when each of the BRIC countries overtakes the current G6 economies.



In the three years since the study came out, their projections look to be conservative, if anything. Growth rates in India and China have been far higher than their assumed rate during the period from 2000 - 2005.

The reason I bring up this study is that India's demographics are cited as a key reason for India's high growth. India is the only country projected to grow at above 5% for the entire period of the projection (upto 2050). This means a per-capita income of over 35 times what it is today. However, India is still projected to have a significantly lower per-capita income than the other BRIC countries, even in 2050.

The report is a great read and still very topical, even though its now three years old.